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Review of 2016 Half–Year Results
26 August 2016
CITIC Limited / 2
In HK$ million 1H 2016 1H 2015
(Restated)
Increase/(Decrease)
Amount %
Continuing operations:
Revenue 183,974 196,562 (12,588) (6%)
Profit before taxation 48,495 62,767 (14,272) (23%)
Profit/(Loss) attributable to ordinary shareholders 20,182 37,685 (17,503) (46%)
-Continuing operations 24,918 38,171 (13,253) (35%)
-Discontinued operations (4,736) (486) (4,250) (874%)
Earnings/(Loss) per share (HK$) 0.69 1.51 (0.82) (54%)
-Continuing operations 0.85 1.53 (0.68) (44%)
-Discontinued operations (0.16) (0.02) (0.14) (700%)
Dividend per share (HK$) 0.10 0.10 - -
2016 Half-Year Results
CITIC Limited / 3
Revenue from continuing operations by segment
In HK$ million 1H 2016 1H 2015
(Restated)
Increase/(Decrease)
Amount %
Financial services 97,040 103,254 (6,214) (6%)
Resources and energy 21,323 22,146 (823) (4%)
Manufacturing 28,673 32,336 (3,663) (11%)
Engineering contracting 6,096 6,240 (144) (2%)
Real estate 1,641 1,304 337 26%
Others 29,183 31,190 (2,007) (6%)
CITIC Limited / 4
Profit Attributable to Ordinary Shareholders from continuing operations by Segment
In HK$ million 1H 2016 1H 2015
(Restated)
Increase/(Decrease)
Amount %
Financial services 21,941 33,317 (11,376) (34%)
Resources and energy 911 1,199 (288) (24%)
Manufacturing 1,641 1,307 334 26%
Engineering contracting 1,060 995 65 7%
Real estate 19 1,220 (1,201) (98%)
Others 2,267 2,187 80 4%
CITIC Limited / 5
Financial Position
In HK$ million 30/06/2016 31/12/2015 Increase/(Decrease)
Amount %
Total assets 7,264,817 6,803,309 461,508 7%
Incl.: Assets of disposal group classified as held for sale 135,142 - 135,142 N/A
Total liabilities 6,609,200 6,140,140 469,060 8%
Incl.: Deposits from customers 4,010,328 3,766,848 243,480 6%
Deposits from banks and non-bank financial institutions
1,339,053 1,275,421 63,632 5%
Debt instruments issued 609,098 449,772 159,326 35%
Bank and other loans 110,779 147,221 (36,442) (25%)
Liabilities of disposal group classified as held for sale 88,695 - 88,695 N/A
Total ordinary shareholders’ funds 482,440 479,066 3,374 1%
Total ordinary shareholders’ funds and perpetual capital securities
490,319 492,902 (2,583) (1%)
CITIC Limited / 6
Total Consolidated Debts
In HK$ million 30/06/2016 31/12/2015 Increase/(Decrease)
Amount %
Financial services 481,917 346,459 135,458 39%
Resources and energy 42,442 43,008 (566) (1%)
Manufacturing 19,916 21,554 (1,638) (8%)
Engineering contracting 1,212 1,282 (70) (5%)
Real estate (Note) 9,095 90,368 (81,273) (90%)
Others 42,005 42,955 (950) (2%)
Operation management 135,315 102,390 32,925 32%
Elimination (12,025) (51,023) 38,998 (76%)
Total 719,877 596,993 122,884 21%
Note: The Group entered into an agreement with China Overseas to sell interests in certain residential real estate projects in the PRC. As a result, the assets and liabilities related to such residential real estate projects have been classified as held for sale following this agreement.
CITIC Limited / 7
Capital Expenditure
In HK$ million 1H 2016 1H 2015
(Restated)
Increase/(Decrease)
Amount %
Financial services 5,941 1,324 4,617 349%
Resources and energy 2,901 6,621 (3,720) (56%)
Manufacturing 2,600 2,425 175 7%
Engineering contracting 154 49 105 214%
Real estate 4,403 996 3,407 342%
Others 5,979 8,225 (2,246) (27%)
Subtotal 21,978 19,640 2,338 12%
Real estate development 5,649 15,229 (9,580) (63%)
Total 27,627 34,869 (7,242) (21%)
OUR BUSINESS
CITIC Limited / 9
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 97,040 103,254 (6,214) (6%)
Profit attributable to ordinary shareholders 21,941 33,317 (11,376) (34%)
Assets (compared to 31 Dec 2015) 6,640,820 6,211,176 429,644 7%
Capital expenditure 5,941 1,324 4,617 349%
Financial Services
Excluding the impact from the disposal of a 3.16% interest of CITIC Securities last year, placing of new shares of CITIC Securities and RMB depreciation, revenue increased by 13% while profit attributable to ordinary shareholders decreased by 2% compared with 1H 2015.
CITIC Bank
• Revenue reached RMB78.4billion, RMB8.4 billion or 12% higher than 1H 2015;
• Pre-provision operating profit grew by 18% compared with 1H 2015 due to the steady growth in operating income and
the lower cost-income ratio;
• The revenue contribution from non-interest income rose to 31.8% due to the optimised income structure;
• The impairment allowance increased by RMB7.2 billion to RMB23.9 billion.
CITIC Limited / 10
Financial Services (continued)
CITIC Trust
• 1H net profit is one of the top in the industry;
• By the end of June, total AUM was about RMB1,520.4 billion, a 10% increase compared with the end of 2015.
CITIC Securities
• 1H net profit declined 58% due to a lacklustre A share market, corresponding to the decreasing trend of its peers, but
maintained a leading position in the industry;
• During the period, in terms of equity underwriting, balance of margin financing and securities lending, and total AUM in
its asset management business, CITIC Securities ranked first in the market. The market share of the company's debt
underwriting business, trading turnover in stocks and funds and the size of stock-pledged repo business ranked second
in the market.
CITIC Limited / 11
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 21,323 22,146 (823) (4%)
Profit attributable to ordinary shareholders 911 1,199 (288) (24%)
Assets (compared to 31 Dec 2015) 145,321 141,693 3,628 3%
Capital expenditure 2,901 6,621 (3,720) (56%)
Resources and Energy
In a weak resources and energy market, revenue decreased 4% compared with 1H 2015. Excluding a one-time accounting
gain from Ligang Power Plant in 1H 2015, net profit increased 32%, mainly because crude oil production and the
commodity trading business performed well.
Crude Oil
• Improved oil production with average daily oil production increased 4% compared with 1H 2015;
• Although crude oil prices continued to hover at low levels, we made an effort to improve production efficiency and exercise increased vigilance on costs, which helped alleviate the negative impact of low prices on the financial performance;
• KBM oilfield managed to achieve a turnaround in financial results in 1H due to reductions in export duty and rent tax.
Sino Iron
• The last two of six concentrator lines were commissioned in late May;
• Operational focus is on increasing production rate and reducing operating costs.
CITIC Limited / 12
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 28,673 32,336 (3,663) (11%)
Profit attributable to ordinary shareholders 1,641 1,307 334 26%
Assets (compared to 31 Dec 2015) 96,827 97,208 (381) (0.4%)
Capital expenditure 2,600 2,425 175 7%
Manufacturing
Revenue decreased 11% mainly because the selling prices of special steel and heavy equipment decreased; profit
attributable to ordinary shareholders increased 26% compared with 1H 2015 owing to better sales volume and gross
profit margin in the aluminium wheel and casting business, as well as the special steel business.
CITIC Pacific Special Steel
• Special steel business continued to outperform the market;
• 3.87 million tonnes sold, 10% higher than 1H 2015;
• An increase in gross profit margin by reducing raw materials procurement costs
and further optimising product mix.
CITIC Limited / 13
Manufacturing (continued)
CITIC Heavy Industries
• Both revenue and profit declined compared with 1H 2015, due to weak demand
from the traditional customer segments of construction materials, mining and coal
in addition to fierce market competition;
• Close to half of the new contracts signed in 1H were EPC (Engineering,
Procurement and Construction) contracts, with a total contract value of RMB1.9
billion;
• Special purpose robots built by newly-acquired Tangshan Kaicheng, a new business
segment, contributed to the bottom line.
CITIC Dicastal
• More than 21 million aluminium wheels and 37,500 tonnes of aluminium casting
were sold, a rise of 17% and 3% respectively compared with 1H 2015. During the
period, CITIC Dicastal maintained a leading position in the market;
• Gross profit margin increased 4ppt due to effective cost control.
CITIC Limited / 14
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 6,096 6,240 (144) (2%)
Profit attributable to ordinary shareholders 1,060 995 65 7%
Assets (compared to 31 Dec 2015) 38,284 42,245 (3,961) (9%)
Capital expenditure 154 49 105 214%
Engineering Contracting
Revenue decreased 2% compared with 1H 2015 as new projects were still in the preliminary stage. Profit attributable to
ordinary shareholders increased 7% compared with 1H 2015, which included the reversal of the provision taken in
previous years.
• In the first half of the year, CITIC Construction signed 4 major contracts, including a contract for a Kazakhstan highway
reconstruction project with a value of over US$900 million;
• CITIC Engineering Design speeded up construction of EPC projects, including a restructuring project for a sewage
disposal plant that helped to achieve a significant increase in 1H net profit.
CITIC Limited / 15
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 1,641 1,304 337 26%
Profit attributable to ordinary shareholders 19 1,220 (1,201) (98%)
Assets (compared to 31 Dec 2015) 235,268 232,809 2,459 1%
Capital expenditure 4,403 996 3,407 342%
Real Estate
In March 2016, CITIC signed contract with China Overseas Land & Investment to sell our mainland residential property
assets. Tax payments and other expenses related to the restructuring of the property business were recorded in the first
half of the year. The residential property assets to be sold are categorised as discontinued businesses in the results.
In the first half of the year, revenue of the continued property business increased 26% compared with 1H 2015 due to the
delivery of the Jiading project. However, profit recorded a decline since a one-time gain was booked for disposal of Royal
Pavilion last year. In addition, the revaluation of investment property decreased during the period.
CITIC Limited / 16
In HK$ million As of 30 June Increase/(decrease)
2016 2015 Amount %
Revenue 29,183 31,190 (2,007) (6%)
Profit attributable to ordinary shareholders 2,267 2,187 80 4%
Assets (compared to 31 Dec 2015) 120,243 113,738 6,505 6%
Capital expenditure 5,979 8,225 (2,246) (27%)
Others
• Profit was mainly contributed by Dah Chong Hong, international communication services and the infrastructure business
such as tunnels and expressways;
• Net profit of CITIC Telecom International increased 3% compared with 1H 2015 due to the development of the internet
business and enterprise solutions business;
• Affected by the economic slowdown in both the mainland and Hong Kong as well as weak consumer sentiments, net
profit of Dah Chong Hong recorded a decline compared with 1H 2015;
• CITIC Envirotech recorded a 65% increase in revenue and 150% increase in net profit for 1H due to the expansion of the
EPC, water treatment and membrane businesses.
In the first half of the year, revenue of other businesses decreased 6% compared with 1H 2015, while net profit
increased 4% compared with 1H 2015.
Thank you Potential investors and shareholders of the Company (the “Potential Investors and Shareholders”) are reminded that information contained in this Presentation comprises extracts of operational data and financial information of the Group. The information included is solely for the use in this Presentation and certain information has not been independently verified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions presented or contained in this Presentation. Potential Investors and Shareholders should refer to the 2016 Half-Year Report for the results of the Company which are prepared in accordance with relevant rules, regulations and accounting standards. The performance and the results of operations of the Group contained within this Presentation are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and opinions contained within this Presentation are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. The Group, the Directors, employees and agents of the Group assume (a) no obligation to correct or update the forward-looking statements or opinions contained in this Presentation; and (b) no liability in the event that any of the forward-looking statements or opinions do not materialise or turn out to be incorrect. Potential Investors and Shareholders should exercise caution when investing in or dealing in the securities of the Company.
