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Macquarie Korea I F (MKIF)

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Tuesday 30 July, 2013

Macquarie Korea I F

2013 1H Financial and Performance Results

RNS Number : 4550K
Macquarie Korea Infrastructure Fund
30 July 2013
 



 

 

30 July 2013

 

 

 

 

 

 

MACQUARIE KOREA INFRASTRUCTURE FUND

REPORTS HALF-YEAR FINANCIAL AND TRAFFIC RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

 

 

Macquarie Korea Infrastructure Fund ("MKIF") today announced its interim financial resultsfor the six months ended 30 June 2013 (the "Period"), together with thetraffic results for the Period. 

 

Highlights for the Period include:

 

§  On a non-consolidated basis, MKIF's revenue and net income recorded KRW 97.2 billion and KRW 70.4 billion,
respectively. Excluding the one-off gains[1], the revenue increased by 0.1% while net income decreased by 1.3%
 
compared to the previous corresponding period ("pcp").

 

§  MKIF recognised KRW 11.2 billion of one-off income in the Period as a result of the Liquidation Dividend from Cheonan-Nonsan Expressway Corporation ("CNEC") Asset Backed Securities ("ABS") SPC (tranche 1 and tranche 2)[2]

 

 

§  The final Interim Distribution for the Period approved by the board of directors of MKIF today is KRW 210 per share, partly reflecting the one-off income on the Liquidation Dividend from CNEC ABS SPC.

 

§  The performance of the underlying assets has been generally stable. On a weighted average basis[3], actual traffic
 

         volume and revenues of the underlying assets increased compared to pcp by 2.6% and 6.6%, respectively. During the Period, the four newly opened transportation assets[4] have reached approximately 77% of the Concession

 

         Agreement forecast volume, compared to 76% recorded in pcp.

 

§  Key operational highlights of Busan New Port Phase 2-3 (BNP) include:

-  Total container throughput volume for the Period reached approximately 0.60 million TEUs, compared to 0.36 million TEUs in the second half of 2012

-  The target volume for FY2013 adjusted downward from 1.6 million TEUs to 1.3 million TEUs as a result of the partial delay in volume flows to BNP from other terminals in Busan

-  Cash management continues to be a top management priority during the ramp-up period particularly due to the slow recovery in tariff

-  Volume migration from the Busan Old Port continues with the New Port's market share of container volume in Busan area reaching 63% as of June 2013 compared to 52% in pcp

-  Overall, the New Port's volume grew by 2.2% in the Period compared to pcp

 

§  MKIF remains financially healthy with conservative balance sheet position:

-   Proportionately consolidated cash balance[5] of KRW 226.1 billion

 

-   Continued de-gearing of asset level debt with a weighted average maturity of 8.2 years

-   MKIF net debt of KRW 348.6 billionwith no external financing needs until May 2016

-   Proportionately consolidated gearing[6] of 38.7% with 67% of interest obligations fixed[7]

 

 

Financial Results

(Unit: KRW million)


Six month to 30 June 2013

Six month to 30 June 2012

Revenue

97,186

119,084

Interest income

85,940

85,888

Dividend income

11,246¹

-

Gain on sale of investment

-

33,1512

Other income

-

45

Operating Expenses

26,747

25,924

Management fee

15,508

13,063

Interest expense

9,945

11,383

Other expenses

1,294

1,478

Net Income

70,439

93,160

EPS (KRW) 3

213

281

Normalised Net Income 4

59,193

59,964

Normalised EPS (KRW) 4

179

181

1.   One-off Liquidation Divided income from CNE ABS SPC (tranche 1 and tranche 2)

2.   One-off capital gain from the sale of equity in Daegu 4th Expressway East

3.   Based on the number of shares outstanding of 331.5 mil shares

4.   Excludes one-off income

 

Traffic Results

 


2013 2nd Quarter

2013 First Half

Asset

Traffic (%)1

Revenue (%)2

Traffic (%)1

Revenue (%)2

Weighted average growth

2.6%

6.1%

2.6%

6.6%

1.  Percentage increase from prior corresponding period, based on average daily traffic

2.  Percentage increase from prior corresponding period, based on average daily revenue

 

 

For further information, please contact:

 

Jiroo Eoh

Investor Relations

Macquarie Korea Infrastructure Fund

+ 82 2 3705 8636

[email protected]

 

Ally An

Investor Relations

Macquarie Korea Infrastructure Fund

+ 82 2 3705 8565

[email protected]

 

This release is not an offer or solicitationfor sale of the securities of Macquarie Korea Infrastructure Fund('MKIF')in the United States or in any jurisdiction where any offer, sale or solicitation in respect of such securities is not permitted. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended(the "Securities Act"), or in any jurisdiction where such offer or sale is not permitted. The securities of MKIF has not been registered under the Securities Ac, and may not be offered or sold in the United States absent registration or exemption from registration under the Securities Act. There will be no public offer of the securities in the United States.  

Not for distribution in the United States or in any jurisdiction where any offer, sale or solicitation in respect of the contemplated securities is not permitted.

 

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons").  Any securities will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire any securities will be engaged in only with, relevant persons.  Any person who is not a relevant person should not act or rely on this document or any of its contents.

 

This release does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in MKIF, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary.

 

MKIF or Macquarie KoreaAsset Management Co., Ltd. is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia).  The obligations of this entitydo not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL).  MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

 

Investments in MKIF are subject to investment risk, including possible delays in repayment or loss of income and/or capital investment. Neither MKIF, nor any member of the Macquarie Group companies, including MKAM, guarantees the performance of MKIF, the repayment of capital or the payment of a particular rate of return on MKIF securities.



Appendix1. Financial results (Unaudited, non-consolidated basis) 

 

Statement of Financial Position

As at 30 June 2013, 31 December 2012 and 30 June 2012

 

            (Unit: KRW millions)


30 June 2013

31 December 2012

30 June 2012

Assets




. Invested Assets

1,691,415

1,691,108

1,825,624

      Cash & deposits

25,118

20,815

113,978

      Loans receivable

1,092,046

1,096,042

1,137,395

      Equity securities1

574,251

574,251

574,251

. Others

387,401

364,175

304,367

      Interest receivables

376,782

351,646

290,563

      Other receivables

2,946

4,458

4,458

      Deferred costs, net

7,673

8,071

9,346

Total Assets

2,078,816

2,055,283

2,129,991





Liabilities




      Accounts payable

1

1

457

      Management fee payable

7,931

7,455

6,629

      Other liabilities

1,482

1,534

1,551

      Long-term debt

123,705

84,944

148,136

      Bond

249,244

249,156

249,067

Total Liabilities

382,363

343,090

405,840





Shareholders' Equity




Share Capital

1,670,986

1,670,986

1,670,986

Retained Earnings

25,467

41,207

53,165

Total Shareholders' Equity

1,696,453

1,712,193

1,724,151

Total Liabilities and Shareholders' Equity

2,078,816

2,055,283

2,129,991

1. Pursuant to the Financial Investment Services and Capital Market Act, MKIF reports all its unlisted equity investments at acquisition cost. These are unaudited numbers and as such may be subject to change

 

 



Statements of Income

For the half-years ended 30 June 2013 and 30 June 2012

 

          (Unit: KRW million)


Six month to 30 June 2013

Six month to 30 June 2012

. Revenue

97,186

119,084

Interest income

85,940

85,888

Dividend income

11,246

-

Gain on sales of investment

-

33,151

Other income

-

45




. Expenses

26,747

25,924

Management fees

15,508

13,063

Custodian fees

166

167

Administrator fees

104

104

Interest expense

9,945

11,383

Other expenses

1,024

1,207




. Net Income

70,439

93,160

 

 



Appendix 2. Traffic and Revenue

 

1.       Traffic Volume and Traffic Revenue - Portfolio Summary

 

On a weighted average basis[8], traffic and revenue increased by 2.6% and 6.1%, respectively, during the second

 quarter (the Quarter), when compared to pcp. On the same basis, traffic and revenue for the Period increased by 2.6%

 and 6.6%, respectively, on pcp. The highlights from the traffic results include:

 

§  The traffic growth of the portfolio during the Quarter was largely attributable to:

        - The four newly opened assets[9] delivered stable traffic ramp-up of 5.6%[10] growth on pcp

        - Traffic for Seoul Subway Line 9, Section 1 increased by 10.7% on pcp, reaching 112% of CA forecast

        - Traffic for Incheon International Airport Expressway and Incheon Grand Bridge increased due to a higher 
 number of airport users travelling the road

§  Traffic volume of Gwangju Second Beltway, Section 3-1 and Machang Bridge decreased due to toll rate adjustment

 

Traffic for each toll road asset is calculated as the average daily traffic volume. Except as stated otherwise, revenuesfor each toll road asset represents actual average daily revenue collected (excluding VAT). Actual revenue collected does not include minimum revenue compensation payments receivablefrom the relevant government authority or the toll freeze compensations related to the CPI growth. Accordingly, revenue performance in the concession companies is not a direct guide to the revenue performance of MKIF. 

 

The revenue growth recorded by the concession companies in which MKIF invests reflects growth of traffic volume and inflation linked toll rate increases, and may also be influenced by changes to the traffic mix, between heavy and light vehicles, for which different toll rates apply.

 


2013 Second Quarter

2013 First Half

% of MKIF

Portfolioc

Asset

Traffic (%)a

Revenue (%)b

Traffic (%)a

Revenue (%)b

Incheon International Airport Expressway

0.9%

2.4%

1.4%

3.4%

6.6

Baekyang Tunnel

1.8%

1.6%

2.0%

1.7%

0.2

Gwangju Second Beltway, Section 3-1

(5.0%)

0.2%

(8.0%)

3.2%

4.9

Gwangju Second Beltway, Section 1

5.1%

5.1%

5.0%

5.8%

11.5

Woomyunsan Tunnel

1.3%

1.3%

(1.0%)

(1.1%)

1.2

Cheonan-Nonsan Expressway

1.6%

6.2%

2.0%

6.4%

16.1

Soojungsan Tunnel

2.2%

1.7%

2.2%

1.6%

6.4

Machang Bridge

(5.0%)

15.7%

(3.5%)

17.4%

6.8

Yongin-Seoul Expressway

6.4%

15.6%

5.9%

16.2%

8.1

Seoul-Chuncheon Expressway

1.6%

5.2%

0.3%

3.9%

8.2

Seoul Subway Line 9, Section1

10.7%

11.0%

11.0%

15.2%

4.5

Incheon Grand Bridge

6.1%

9.3%

6.1%

9.4%

9.9

Weighted Average

2.6 %

6.1%

2.6%

6.6%

-

a           Percentage increase from prior corresponding period, based on average daily traffic

b          Percentage increase from prior corresponding period, based on average daily revenue

c           Percentage based on total commitments by MKIF to all investments in the MKIF portfolio

 

 



2.         Traffic and Revenue - Individual Concession Company Performance

 

 

Incheon International Airport Expressway

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

 54,465

54,929

0.9%

51,575

52,322

1.4%

Average daily revenue (1,000 won)

347,223

355,471

2.4%

330,817

341,969

3.4%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to the increase in the number of airport users.

 

 

Baekyang Tunnel

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

71,491

72,783

1.8%

70,148

71,574

2.0%

Average daily revenue (1,000 won)

51,369

52,168

1.6%

50,401

51,280

1.7%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to the increase in the traffic of compact and small vehicles during the Quarter. The container traffic, however, decreased due to expired toll support for container trucks and ongoing traffic shift to the Busan New Port

 

 

Gwangju Second Beltway, Section 3-1

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

35,702

33,910

(5.0%)

35,592

32,747

(8.0%)

Average daily revenue (1,000 won)

35,758

35,835

0.2%

33,533

34,592

3.2%

Note:      Traffic for the Quarter decreased compared to pcp while revenue increased, mainly due to the toll rate increase for all vehicles in May 2012

 

 

Gwangju Second Beltway, Section 1

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

39,005

40,987

5.1%

37,165

39,031

5.0%

Average daily revenue (1,000 won)

40,971

43,062

5.1%

38,795

41,048

5.8%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to the increase in the traffic of tourists travelling to Mudeung Mountain, a designated national park which opened for public in December 2012

 

 

Woomyunsan Tunnel

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

25,594

25,934

1.3%

25,100

24,857

(1.0%)

Average daily revenue (1,000 won)

55,300

56,016

1.3%

54,291

53,701

(1.1%)

Note:      Traffic and revenue for the Quarter increased compared to pcp due to additional traffic from Woomyun area residence from completion of a new apartment complex

 

Cheonan-Nonsan Expressway

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

44,412

45,123

1.6%

42,433

43,295

2.0%

Average daily revenue (1,000 won)

353,241

375,273

6.2%

338,683

360,222

6.4%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to growing traffic inflow from Sooncheon-Wanjoo Expressway since April 2011. Revenue growth is higher than traffic growth compared to pcp due to increased toll fare

 

 

Soojungsan Tunnel

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

42,572

43,518

2.2%

41,925

42,862

2.2%

Average daily revenue (1,000 won)

31,225

31,747

1.7%

30,754

31,258

1.6%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to the increase in the traffic of compact and small vehicles along with more local events during the Quarter. However, traffic of large and extra-large vehicles decreased due to the traffic shift to the Busan New Port

 

Machang Bridge

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

17,152

16,289

(5.0%)

16,022

15,466

(3.5%)

Average daily revenue (1,000 won)

31,036

35,914

15.7%

28,968

34,017

17.4%

Note:      Traffic for the Quarter decreased compared to pcp while revenue increased significantly, mainly due to the toll rate increase in August 2012

 

 

Yongin-Seoul Expressway

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

66,842

71,121

6.4%

64,361

68,128

5.9%

Average daily revenue (1,000 won)

110,308

127,467

15.6%

105,072

122,076

16.2%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to the increase in the traffic from higher residence occupancy in the region. Average daily traffic volume up to the end of the Quarter was 78% of the CA forecast

 

 

Seoul-Chuncheon Expressway

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

39,663

40,288

1.6%

36,817

36,946

0.3%

Average daily revenue (1,000 won)

243,741

256,535

5.2%

225,627

234,410

3.9%

Note:      Traffic for the Quarter slightly increased compared to pcp due to the Memorial Day weekend (a long holiday weekend) and more weekends with favorable weather conditions during the Quarter. Average daily traffic volume up to the end of the Quarter was 81% of the CA forecast

 

 

 

Seoul Subway Line 9, Section 1

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (passengers / day)*

225,921

250,006

10.7%

218,731

242,859

11.0%

Average daily revenue (1,000 won)

180,118

199,996

11.0%

169,359

195,025

15.2%

* Excludes inter-charge passengers

Note:      Average daily initial boarding and revenue for the Quarter increased compared to pcp due to a combination of ramp-up effect and additional rolling stocks. Average daily initial boarding up to the end of the Quarter was 112%

 

 

Incheon Grand Bridge

Category

PCP

Year on Year

Q2 2012

Q2 2013

% change

1H 2012

1H 2013

% change

Average daily traffic (vehicles / day)

29,203

30,979

6.1%

27,691

29,390

6.1%

Average daily revenue (1,000 won)

147,570

161,233

9.3%

140,123

153,318

9.4%

Note:      Traffic and revenue for the Quarter increased compared to pcp due to ramp-up effect and more airport users travelling the road. Higher revenue growth compared to the traffic growth is due to the toll fare increase in December 2012. Average daily traffic volume up to the end of Quarter was 70% of CA forecast

 



 

3.       Prior Period Compensation Payments Received from Government Authorities

 

The concession companies may receive revenue compensation payments from the relevant government authority in addition to revenue received from traffic. Generally, revenue compensation and other compensation payments are received within 6 to 18 months after the end of the year to which they relate.

 

The status of Minimum Revenue Guarantee (MRG) receivables is shown in the table below.

 

(Unit: KRW million)

Asset Name

MKIF ownership (%)

MRG receivable for 2012

Received Amount

Remaining according to

Concession Agreement

Amount

Due date without additional interest

Incheon International Airport Expressway

24.1

95,669

70,000

25,669

February 2014

Baekyang Tunnel

100

8,6741

-

8,674

April 2013

Gwangju Second Beltway, Section 1

100

20,262

-

20,262

December 2013

Gwangju Second Beltway, Section 3-1

75

6,023

-

6,023

December 2013

Woomyunsan Tunnel

36

6,9682

-

6,968

February 2013

Cheonan-Nonsan Expressway

60

53,428

-

53,428

February 2014

Soojungsan Tunnel

100

12,4853

-

12,485

April 2013

Machang Bridge

70

11,321

11,321

-

February 2013

Yongin-Seoul Expressway

35

856

-

856

February 2014

Seoul-Chuncheon Expressway

15

11,255

-

11,255

February 2014

Seoul Subway Line 9, Section 1

24.5

96,5574

38,4605

58,0975

December 2013

Incheon Grand Bridge

41

15,741

-

15,741

February 2014

1. Including toll freeze compensation of KRW 3,251 million remaining for 2011 and 2010. Deferred interest is currently in effect and payment of the remaining amount is under negotiation with Busan Metropolitan City (BMC)

2. Including MRG receivable of KRW 2,713 million for 2011. Deferred interest is currently in effect and payment of the remaining amount is under negotiation with Seoul Metropolitan City

3. Including toll freeze compensation and MRG receivable of KRW 935 million for 2011. Deferred interest is currently in effect on the remaining amount and negotiation is underway with BMC

4. Including MRG and other compensations of KRW 41,443 million receivable for 2011

5. Partial amount of 2011 MRG compensation paid on 5 July 2013



[1].One-off accounting gain from the sale of equity in Daegu 4th Expressway East in 2012 and the Liquidation Dividend from the CNECABS SPC (tranche 1 and tranche 2) in 2013 

[2]. In 2009 and 2010, MKIF securitised its deferred interest receivable from CNEC by a way of issuing  5-year asset securitisation bonds (tranche 1 and tranche2) both of which were fully retired in June 2013 approximately two years in advance of maturity, resulting in residual cash at the SPC level paid in the form of liquidation dividend (the "Liquidation Dividend") to MKIF

[3]. On a weighted average basis based on revenue size of each asset and the MKIF's equity interest in each concession company

[4]. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway, Seoul Subway Line 9 Section 1 and Incheon Grand Bridge

[5].Proportionately consolidated cash balance (including MKIF cash balance of KRW 25.1bn)

[6].Gearing = MKIF Net Debt/( MKIF Net Debt + MKIF market capital(3-month average)), where MKIF Net Debt = Proportionate net debt from assets + Corporate net debt. Excludes shareholder loans

[7].Hedging (Fixed) = Proportionately consolidated MKIF net debt adjusted for fixed debt / Proportionately consolidated MKIF net debt

[8].On a weighted average basis based on revenue size of each asset and the MKIF's equity interest in each concession company

[9].Yongin-Seoul Expressway, Seoul-Chuncheon Expressway, Seoul Subway Line 9 Section 1 and Incheon Grand Bridge

[10].Weighted average daily traffic during 2nd quarter 2013over 2ndquarter 2012


This information is provided by RNS
The company news service from the London Stock Exchange
 
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