Cathay Pacific 1999 Annual Report Download - page 18

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Financial Review
22 CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1999
Associated companies
•The share of profits after tax of associated companies decreased
significantly by 38% to HK$93 million.
•The lower profits were mainly due to the adverse performances
of both HAECO and Securair, as compared with last year.
Taxation
•The taxation charge at HK$219 million was HK$323 million
higher than in 1998 as a result of the return to profitability.
Dividends
•Total amount paid and proposed for 1999 is HK$1,016 million,
representing a dividend cover of 2.2 times.
Assets
•Total assets as at 31st December 1999 amounted to HK$67,977
million.
•Additions to fixed assets were HK$3,992 million, comprising
HK$2,899 million for aircraft purchases including advance
payments, HK$701 million for expenditure at Hong Kong
International Airport, and HK$392 million for properties and
other equipment.
Borrowings and capital
•Borrowings decreased by 8.9% to HK$24,783 million compared
with HK$27,198 million in 1998.
•Liquid funds decreased by 5.9% to HK$11,595 million as a
result of aircraft acquisitions and the completion of the airline
hotel, the flight training centre and other facilities at Cathay
Pacific City.
•Net borrowings decreased by 11.7% to HK$13,216 million.
•The Group’s shareholders’ funds increased by 4.8% to
HK$27,028 million.
•Net debt/equity ratio decreased to 0.49 times.
Financial risk management policy
•In the normal course of business, the Group is exposed to fluctuations in foreign currencies, interest rates and
jet fuel prices.
•These exposures are managed, sometimes with the use of derivative financial instruments, by the Treasury
Department of Cathay Pacific in accordance with the Group’s approved policies and parameters.
•Derivative financial instruments are used solely for financial risk management purposes and the Group
does not hold or issue derivative financial instruments for trading purposes.
0
5,000
10,000
15,000
20,000
25,000
30,000
0
0.1
0.2
0.3
0.4
0.5
0.6
Net debt and equity
Times
9998979695
Shareholders’ funds Net borrowings
Net debt/equity ratio
HK$ million
9998979695
Operating profit/(loss) Net finance charges
Interest cover
Times
0
1,000
2,000
-1,000
3,000
4,000
0
3
6
9
12
-3
Interest cover
HK$ million