Guangshen Railway Announces 2013 Interim Results

HONG KONG, August 22, 2013 /PRNewswire/ -- Guangshen Railway Company Limited ("Guangshen Railway" or the "Company") (HKEx Share Code: 525; SSE Share Code: 601333; American Depositary Shares ("ADS") Ticker Symbol: GSH) today announced its unaudited operating results for the six months ended June 30, 2013 (the "Period") of the Company and its subsidiaries (the "Group").

During the Period, operating revenue of the Company reached RMB7,626 million, an increase of 8.77% year-on-year. Profit from operations was RMB959 million, down 3.23% year-on-year. Profit attributable to equity holders amounted to RMB649 million, a decline of 4.33% year-on-year. Basic earnings per share came to RMB0.09. The board of directors of the Company does not recommend the payment of any interim dividend for 2013.

In the first half of 2013, the PRC economic growth slowed due to the combined influence of complicated and changing domestic and overseas market conditions. Facing lower demand in the railway transportation industry and the unfavorable operating environment caused by the dilution in the client base by Express Rail Links, the management strictly upheld the Company's operating objectives, accelerated migration of operation development mode, vigorously improved infrastructure safety, proactively promoted the strategy of diversified operation, stepped up regulation of operation management and strived to enhance the quality of services. These measures have helped the Company successfully realized the safety and stability of transportation production and a moderate increase in the transportation revenue. However, due to higher expenses for railway network usage settlement, higher labor costs and significant decrease in net cash flows from investment activities, profitability has been impacted.

During the Period, the Company recorded passenger delivery volume of 44.84 million persons, marking a year-on-year increase of 5.71%. Revenue from passenger transportation increased by 6.50% year-on-year to RMB3,985 million. Of which, the passenger delivery volumes of Through Trains increased 3.06% year-on-year to 1.87 million, and the passenger volumes of long-distance trains amounted to 26.02 million, a year-on-year increase of 10.90%. Through Trains and long-distance trains realized revenues of RMB237 million and RMB2,574 million, respectively, marking year-on-year increases of 5.14% and 10.92%. The passenger delivery of Guangzhou-Shenzhen trains decreased by 0.53% to 17.95 million, realizing revenue of RMB1,174 million.

The increase in passenger transportation was mainly due to a relatively significant period-on-period increase in the passenger delivery volume upon the successive opening of long-distance trains to Nanning and Chengdu after the commencement of operation of Shenzhen East station on December 21, 2012. Meanwhile, there was replacement in new trains for the Canton-Kowloon Through Trains. The opening of Shenzhen-Shanghai South and Guangzhou-Yantai long distance trains by the Company from July 1, 2012 also contributed to the increase.

During the Period, freight tonnage (outbound and inbound) was 28,262,406 tonnes, a dip of 7.51% year-on-year and generating revenue of RMB642 million, down 4.60% year-on-year. The decrease in freight volumn was mainly due to the sluggish market demand for bulk goods such as metal ores, non-metal ores and coal under the impact from factors including the decelerated domestic economic growth and the State's continuously increasing effort on industry and organization adjustments. Therefore the inbound freight volume decreased which led to the drop in the revenue from inbound freight transportation.

In respect of railway network usage and other transportation related services, the business recorded revenue of RMB2.499 million, up 16.40% year-on-year. The prominent increase in revenue from railway network usage services was mainly due to the increase in service volume and unit price of locomotive traction services that led to an increase in revenue from locomotive traction services. The Revenue from railway operation services increased 6.84%, mainly due to the increase in the provision of railway operation services provided by the Company to GZIR under the increased frequency of trains run by GZIR. The revenue from other transportation services decreased by 30.82%, mainly due to the fact that a majority of locomotives and passenger cars of the Company leased to other railway bureaus (companies) were returned upon expiry during the reporting period that led to a decrease in revenue from the usage of locomotives and passenger cars.

Looking forward to its development in the second half of 2013, the Company said: "despite the unlikeliness of significant change in both domestic and overseas economic downturn situations, with the completion and commence of operation of a series of high-speed railways and inter-city railways and the gradual advancement of national rail freight organizational reform, railway passenger delivery volume in the PRC will maintain faster growth, and freight volume is hoped to record turnaround. The Company will continue to follow the sound leadership and scientific decisions of the Board under the guidance of scientific development and resilience to market changes, and on the other hand persevere in the principle of 'reinforcing the foundation, enhancing the quality, expanding the market, invigorating the operation, enhancing the systems and regulating the management', fulfill the responsibilities as a market corporate, adjust its mode of development, fortify the safety foundation, regulate the management of operation, enhance the quality of service, and strive to maintain the stability of transport production and continuous growth in transportation revenue."

In respect of passenger transportation, the Company will further increase the marketing efforts for the Guangzhou-Shenzhen section of passenger transportation, to enhance the operating plan of Guangzhou-Shenzhen section, to aggressively explore new growth points for the Guangzhou-Shenzhen inter-city passenger transportation, to tangibly expedite the establishment of inter-city passenger transportation business at Pinghu stations. Meanwhile, fully develop the potential of Shenzhen East station in order to enhance the operating plans for long-distance trains in the Shenzhen region, and to improve the transportation capacity and transportation efficiency of long-distance trains. In addition, we will persistently cater to the needs of travelers, improve the hardware of passenger transportation services and enhance the quality of passenger transportation services.

In respect of freight transportation, the Company will further carry out the in-depth progression of the freight transportation organization reform, implement the service delivery transform, and enhance service quality.

For the 2013 Interim Results Main Accounting Data, please visit: http://www.prnasia.com/sa/attachment/2013/08/20130822203146581575.pdf

About Guangshen Railway Company Limited

Guangshen Railway Company Limited was established in March 1996. The H shares and ADS issued by the Company were listed on The Stock Exchange of Hong Kong Limited and the New York Stock Exchange in May 1996. In December 2006, the Company returned to the A share market and successfully listed its shares on the Shanghai Stock Exchange. The Company is currently the only PRC railway enterprise with its shares listed on the Shanghai, Hong Kong and New York stock exchanges. The Company is engaged in the railway passenger business between Shenzhen, Guangzhou and Pingshi, providing Guangzhou-Shenzhen inter-city train service, long-distance passenger transportation service, freight transportation service, and the Hong Kong Through Train passenger service in cooperation with MTR Corporation in Hong Kong, as well as entrustment transportation service for other domestic railway companies. As at June 30, 2013, the Company operated 233.5 pairs of passenger trains in accordance with its daily train schedules, including 105 pairs of Guangzhou-Shenzhen trains (includes 19 pairs of spare trains), 13 pairs of Hong Kong Through Trains (Canton-Kowloon Through Train: 11 pairs, Zhaoqing-Kowloon Through Train: 1 pair and Beijing (Shanghai)-Kowloon Trough Train: 1 pair), and 115.5 pairs of long-distance trains.

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