Sinotrans Limited Annual.pdf · March 23, 2005. 1 Forward-Looking Statement Disclaimer. ... Improved resource integration and business process standardization led to efficiency

2004 Annual Results Announcement2004 Annual Results Announcement

Sinotrans LimitedMarch 23, 2005

Sinotrans LimitedMarch 23, 2005

1

ForwardForward--Looking Statement DisclaimerLooking Statement Disclaimer

This Presentation and subsequent discussions may contain forward-looking

statements that involve risks and uncertainties. These statements are generally

indicated by the use of forward-looking terminology such as believe, expect,

anticipate, estimate, plan, project, target, may, will or may be expressed to be

results of actions that may or are expected to occur in the future. You should

not place undue reliance on these forward-looking statements, which reflect our

belief only as of the date of this presentation. These forward-looking statements

are based on our own information and on information from other sources we

believe to be reliable. Our actual results may be materially less favourable than

those expressed or implied by these forward-looking statements which could

depress the market price of our shares.

2

Table of ContentsTable of Contents

1. 2004 Annual Highlights

2. Outlook and Strategic Focus

3. Conclusion

3 – 17

18 – 19

20 –21

3

1.1. 2004 Highlights2004 Highlights

4

20042004 Summary HighlightsSummary Highlights

Continuous revenue growth of 25.9% to RMB21.88 billion

Net profit jumped 13.9% to RMB802.8 million

Earnings per share reached RMB0.19

Final dividend of RMB0.034 was recommended

5


Benefited from persistent growth in the transportation and logistic market of the PRC

Improved resource integration and business process standardization led to efficiency

Established overseas agency network in principal geographical locations and better overseas operations and communications

Developed new products such as warehouse financing and domestic express services

Reinforced budget control system and introduced system of Key Performance Indicator (KPI)

6


Freight forwarding remained the biggest revenue contributor

Express services, shipping agency operations also saw revenue growth

Supporting businesses also report strong growth

7

StableStable Financial Performance Financial Performance Turnover Operating Profit

(RMB mm)

893

1,119

0

200

400

600

800

1,000

1,200

2002 2003 2004

1,237

1,400

Net Profit(RMB mm)

Consistent growth in financial performance demonstrated effective development strategies and economic efficiencyOur 2004 Annual financial performance is in line with long-term growth expectation

Earning Per Share(1)

0.22

0.17

0

0.1

0.2

0.3

2002 2003 2004

572

705

0100200300400500600700800

2002 2003 2004

803

0.19

13,550

17,374

0

5,000

10,000

15,000

20,000

2002 2003 2004

(RMB mm)21,880

8

Growing Turnover ProfileGrowing Turnover Profile

13,550

17,374

0

5,000

10,000

15,000

20,000

2002 2003 2004

Turnover Trend(RMB mm)

Revenue Growth

25,00025.9%

21,880

10,324.912,300.1

380.7

417.41,150.8

1,760.01,950.5

2,781.4

446.4

533.5143.1

151.0

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2002 2003 2004

Operating Turnover by Segment(RMB mm)

Freight Forwarding Express ServicesShipping Agency Marine Transportation

StorageOther

9.9%

24.9%

20.9%

27.7%

22.6%

03–04growth

5.6%

14,404.3

17,935.5

15,706.9

504.82,197.7

3,056.3

653.9151.1

22,270.722,000

Key drivers of revenue growthIntegrated market resourcesComprehensive network coverageStandardized business processesIntegrated marketingProducts and service optimizationEnhanced products’ servicing capability

(RMB mm) 2003 20042004 Annual Turnover Contribution

15,706.9504.8

2,197.73,056.3

653.9151.1

Freight ForwardingShipping AgencyExpress ServicesMarine TransportationStorage and Terminal ServicesOther

12,300.1417.4

1,760.02,781.4

533.5143.1

Note: Before inter-segment elimination adjustments

9

Improving Operating Profit PerformanceImproving Operating Profit Performance

893

1,119

0

200

400

600

800

1000

1200

2002 2003 2004

Operating Profit Trend(RMB mm)

10.6%

Revenue Growth

1,2371400

Operating Profit by Segment

316.6 318.4

215.1 207.0

292.5450.3

34.6

183.4

76.3

91.4

-7.7

-200.0

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

2002 2003 2004

(RMB mm)

Freight Forwarding Express ServicesShipping Agency Marine Transportation

StorageOther

13.4%

41.5%

03–04growth

927.4

1,248.7

-1.8

5.3%335.3

234.5

510.7

170.3129.3

1,375.7

-4.4

7.1%

13.3%

.

N.A.

Note:Before unallocated costsNote:After unallocated costs

2004 Annual Operating Profit Contribution

335.3234.5

510.7170.3129.3

(4.4)

Freight ForwardingShipping AgencyExpress ServicesMarine TransportationStorage and Terminal ServicesOther

(RMB mm) 2003 2004318.4207.0450.3183.4

91.4(1.8)

Key drivers of improved operating profitsContinued growth of express services and

marine transportationSignificant growth of storage and terminal

serviceIncrease of business volume

Note:Before unallocated costs

10

Key Business Lines Key Business Lines Sinotrans Limited

Core Services Support Services

Total Operating Profit: RMB1,375.7mn

Operating Profit Contribution (2)

17.0%

37.1%

12.4%9.4%

24.4%

Storage & Terminal ServicesMarine Transportation Other

(2) Percentage contribution is before unallocated costs and exclude the negative operating profit from others

Total Revenue: RMB22,270.7mn

Turnover Contribution (1)

2.3%

9.9%

13.7%2.9% 0.7%

70.5%

(1) Percentage contribution is before inter-segment eliminations

Integrated Logistics

Storage & Terminal Services

Express Services

Freight Forwarding

Shipping Agency

MarineTransportationTrucking

Freight Forwarding Express Services Shipping Agency

11

Freight Forwarding Operating PerformanceFreight Forwarding Operating Performance

2.58

3.00

0

10

20

30

2002 2003 2004

(TEU In million) (Kilogram in million)

Sea Container Growth Air FF

16.3%

15.5%

40

3.54

18%

183.7159.1

0

50

150

100

200

250

300

2002 2003 2004

53.8%

282.6

12,300.110,324.9

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002 2003 2004

(RMB mm)

27.7%

Note: Before elimination adjustmentsRevenue Growth

15,706.9

19.1%

16,000

Turnover and Turnover GrowthCargo Volume Growth

Operating Profit and Growth

Operating Profit

(RMB mm)

Note: Before unallocated costsGrowth

0. 6%

318.4316.6

0

50

100

150

200

250

300

350

2002 2003 2004

335.3.

5.3%Continuous and stably growth was

recorded in freight forwarding business

Increase of business volume and rise in marine freight rates contributed to growth in sea freight forwardingbusiness

Integrated procurement was adopted to expand air freight forwarding business

12

Express Services Operating PerformanceExpress Services Operating PerformancePackages & Documents Growth Turnover and Turnover Growth

Note:Before elimination adjustmentsRevenue Growth

52.9%

(RMB mm)

1,760.0

1,150.8

-200.0400.0600.0800.0

1,000.01,200.01,400.01,600.01,800.02,000.0

2002 2003 2004

2,197.7

24.9%2,200.0

9.54

12.24

0

2

4

6

8

10

12

14

2002 2003 2004

28.3%

(Packages in millions)

Business Volume Growth

14.28

16.7%16

Operating Profit and GrowthThe Group’s express services was

benefited from China’s high economic growth

Enhanced marketing efforts and new product launch both contributed to growth in turnover


450.3

292.5

-50

100150200250300350400450500

2002 2003 2004Operating Profit


(RMB mm)

Growth

53.9%510.7

13.4%550

13

Shipping Agency Operating PerformanceShipping Agency Operating Performance

215.1 207.0

190

200

210

220

230

240

2002 2003 2004

Note: Before unallocated costs

(RMB mm)

Operating Profit

13.3%

Growth

-3.8%234.5

180

Net Registered Vessel Tonnage Turnover and Turnover Growth

25.9%

(NRT in millions)

Business Volume Growth

195.6

155.4

0

50

100

150

200

250

2002 2003 2004

280.5

30043.4%

Note: Before elimination adjustments

(RMB mm)

Revenue Growth

9.6%

380.7

417.4

320

340

360

380

400

420

440

2002 2003 2004

504.8

20.9%

Operating Profit and GrowthEnhanced integrated marketing and strategic partnership with marine company

Rapid growth in turnover and business volume despite fierce market competition

14

Operating StatisticsOperating Statistics

Marine Transportation1,016,2291,128,364TEUs

Other services

52,44261,443Vessel calls (number of times)

12.214.3packages & documents (in millions of units)

2.51.9Container cargo (in ten thousands of TEUs)2.62.2Bulk cargo(in millions of tonnes)

Rail freight forwarding

300.0353.7Container cargo (in ten thousands of TEUs)2.75.3Bulk cargo (in millions of tonnes)

18.516.7Warehouses (in millions of tonnes)

Storage and terminal services

Shipping agency

Express services

183.7282.6Air freight forwarding (in millions of kilograms)

2.32.4Terminals bulk cargo (in million of tonnes)

195.6280.5Net registered tonnes (in millions of tonnes)

Sea freight forwarding

2.82.8Trucking (in millions of tonnes)

Freight Forwarding

2004 2003

15

Income StatementIncome Statement

9.613.9Share of results of associates before taxation

1,200.81,319.4Profit before taxation

72.568.3Financial income, net

218.4245.9Depreciation and amortization

16,090.820,460.4Operating costs (Excluding depreciation and amortization)

17,427.921,943.5Total revenues

861.2980.7Profit after taxation

1,118.71,237.2Operating profit

54.063.7Other revenues

705.0802.8Profit for the year

17,373.921,879.8Turnover

20032004RMB mm

Net profit in 2004 grew 13.9% from the year 2003, reaching RMB 802.8 million

16

Balance Sheet StatementBalance Sheet Statement

11,914.813,081.1Total assets

6,233.06,780.9Owner’s equity776.51,035.1Minority interests

255.869.3Other liabilities

-13.8Borrowings1.61.5Deferred tax liabilities

257.484.6Total non-current liabilities

2,931.53,074.6Trade payables90.0194.5Borrowings

1,402.91,896.7Property, plant and equipment

9,870.310,218.3Total current assets

384.0497.1Other current assets

641.6966.1Other non-current assets

3,463.44,073.6Trade and other receivables

4,647.95,180.5Total current liabilities

2,044.52,862.8Total non-current assets

1,626.41,911.4Other current liabilities

1,140.1924.9Term deposits with initial term of over three months

11,914.813,081.1Total equity and liabilities

4,882.84,722.7Cash and cash equivalents20032004RMB mm

17

Cash Flow StatementCash Flow Statement

2,342.04,882.8Cash and cash equivalents at January 1st of 2004

4,882.84,722.7Cash and cash equivalents at December 31th of 2004

(1,074.6)(582.4)Cash flow from investing`

2,896.1(243.3)Cash flow from financing

2,540.8(160.1)Net change of cash and cash equivalents

719.3665.6Cash flow from operations

20032004RMB mm

18

2.2. Outlook and Strategic FocusOutlook and Strategic Focus

19

Business StrategiesStrengthen business integration and increase the profitability of freight forwarding business1

Optimize the overseas agency network and expedite development of the NVOCC business2

Strengthen project transportation and trade fair businesses3

Promote innovation, enhance the development of new services and products4

Strengthen marketing and client portfolio management , and optimize the customer structure5

Enhance the fundamental management and increase the internal control capability of the Company 6

We expect further growth in the Company's business in 2005. While global and Chinese economy is gaining pace, international trade keeps expanding.

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3.3. ConclusionConclusion

21

ConclusionConclusion

Extensive Network

Full Service Capabilities

Market Leadership

Valuable Strategic

Relationships

Strong Brand Recognition

Experienced Management

Team

Superior Financial

Performance

Strong Sector Growth in China

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- Thank You -