Group Financial Results
If we include share of revenue from joint ventures and associated companies as stipulated in Notes 17 and 18 of the financial statements, as well as Western Harbour Tunnel, revenue from operations fell 5% from HK$109,848 million in 2012 to HK$104,382 million in 2013, primarily due to the decrease in revenue of HK$6 billion in Dah Chong Hong resulting from the discontinuation of the Bentley distributorship in the PRC at the end of 2012 and the drop in demand for imported heavy duty commercial vehicles in line with the slowdown of Chinabased infrastructure projects. Revenue of HK$1.2 billion from mainland China property decreased because fewer properties were handed over. This was partially offset by an increase in revenue from Energy and Special steel as a result of higher sales volumes.
Net Finance Charges
Total finance charges increased 10% from HK$5,228 million in 2012 to HK$5,747 million in 2013, due to increased borrowing of HK$4 billion as compared between the two years, and higher average borrowing costs for 2013 as compared with the previous year. Average cost of debt was 4.5% in 2013.
Capitalised interest, which was mainly attributable to the development of our mining operation in Australia, dropped from HK$3,513 million in 2012 to HK$2,471 million in 2013 as some of the facilities became ready for their intended use during the year.
After inclusion of other finance charges and netting off with finance income, the net finance charges increased by HK$1,606 million to HK$2,748 million in 2013, of which HK$1,321 million was attributed to the Iron ore segment.
Taxation in 2013 decreased 27% to HK$978 million as compared with the previous year. This was in line with the decrease in profit from consolidated activities after deduction of net finance charges.