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HALF-YEAR REPORT 2016
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Financial services
For the first half of 2016, the financial services segment recorded net profit attributable to ordinary shareholders
of HK$21,941 million. Excluding the gains recognised for the same period last year as a result of the disposal of
equity interests in CITIC Securities and the dilution of CITIC Limited’s equity interests following the placing of
new shares by CITIC Securities, as well as the impact of translation due to RMB depreciation, the decrease from
the first half of 2015 would have been HK$395 million or 2%.
The banking business reported growth in net profit and remained the principal source of profit for the financial
services segment. CITIC Bank continued to optimise its revenue mix, as the increase in the percentage share of
non-interest income contributed to the growth in profit before provision from the first half of 2015. Following
the impact of translation due to RMB depreciation, the introduction of China National Tobacco Corporation as a
strategic investor of CITIC Bank during the first half of the year, the percentage of the Group’s shareholdings in
CITIC Bank decreased as compared to the same period last year, resulting in a corresponding 5% decrease in net
profit of CITIC Bank attributable to the Group. The trust business reported sound performance for the first half of
2016, sustaining growth in revenue from handling charges and commission compared with the same period of
last year. CITIC Securities reported a 58% decrease in net profit, as its securities brokerage, securities investment
and credit trading businesses experienced year-on-year decline in results in line with the overall conditions of
China’s securities market.
Resources and energy
Volatility in the global market for resources and energy brought challenges to the operation of this business
segment of the Group. Although the prices of crude oil and certain other commodities picked up during the
first half of 2016, weakness remained when compared with the same period of last year. The Group adopted a
number of cost-saving and efficiency enhancement measures to alleviate the impact of low prices. The resources
and energy business recorded net profit attributable to ordinary shareholders of HK$911 million for the first half
of 2016. There was an increase of HK$223 million, or 32% compared to the same period last year, excluding gains
realised through the release of reserve recognised in previous years upon the acquisition of controlling rights for
Jiangsu Ligang Electric Power Limited (
江蘇利港電力有限公司
) and Jiangyin Ligang Electric Power Generation
Company Limited (
江陰利港發電股份有限公司
) during the same period last year.
The crude oil business reported to reduce loss with the benefit of multiple, such as the reduction in tax and the
implementation of cost control measures. Growth in net profit was driven by the substantial increase in the
trade volume of non-ferrous metals, such as iron ore and copper. The 6 production lines of Sino Iron were fully
commissioned in May, producing 4.51 million wet metric tonnes of concentrate during the first half of 2016.
Manufacturing
This business reported satisfactory results, recording net profit attributable to ordinary shareholders of HK$1,641
million during the first half of 2016, an increase of HK$334 million or 26% from the first half of 2015.
Special steel maintained its leading position in operating results against the backdrop of a steel industry
suffering from decreasing production capacities and prices, as it improved its gross profit margin by cutting its
raw material purchase costs and adjusting its product mix.
Aluminium wheels and castings sustained growth in sales while driving steady improvements in gross profit
margin through cost control.