REG - Hongkong Land Hldgs Jardine Matheson Hdg - Half Year Results
28/07/2022 10:45
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RNS Number : 0551U Hongkong Land Hldgs Ltd 28 July 2022
Announcement
28th July 2022
The following announcement was issued today to a Regulatory Information
Service approved by the Financial Conduct Authority in the United Kingdom.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEAR RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2022
Highlights
· Underlying profit up 8%
· Higher profits from Development Properties
· Investment Properties profits marginally lower
· Group's financial position remains strong
· Additional US$500 million share buyback announced
"Resilient financial performance at Hongkong Land in the first half of 2022
was pleasing to see, although contracted sales of China Development Properties
were affected by weak market sentiment. The Group's full-year underlying
profits are expected to be significantly lower than the prior year. This is
primarily due to the planned timing of sales completions and the impact of
pandemic-related restrictions on construction activities on the Chinese
mainland, which will result in some completions being deferred from the second
half of 2022 into 2023."
Ben Keswick
Chairman
Results
(unaudited)
Six months ended 30th June
2022 2021 Change
US$m US$m %
Underlying profit attributable to shareholders(#) 425 394 +8
Profit/(loss) attributable to shareholders 292 (865) n/m
Shareholders' funds 33,619 34,584* -3
Net debt 6,062 5,104* +19
US¢ US¢ %
Underlying earnings per share(#) 18.67 16.90 +10
Earnings/(loss) per share 12.83 (37.06) n/m
Interim dividend per share 6.00 6.00 -
US$ US$ %
Net asset value per share 14.99 15.05* -
# The Group uses 'underlying profit attributable to shareholders' in its
internal financial reporting to distinguish between ongoing business
performance and non-trading items, as more fully described in
note 7 to the condensed financial statements. Management considers this to
be a key measure which provides additional information to enhance
understanding of the Group's underlying business performance.
* At 31st December 2021.
The interim dividend of US¢6.00 per share will be payable on 12th October
2022 to shareholders on the register of members at the close of business on
19th August 2022.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEAR RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2022
OVERVIEW
Anti-pandemic measures taken across China led to subdued consumer demand in
the Group's retail and residential properties businesses in the period,
although the impact on underlying profit in the first half of the year was
modest. Profits from the Group's Investment Properties business were
marginally lower than the same period last year, while a greater number of
residential sales completions in China resulted in a higher contribution from
the Development Properties business.
PERFORMANCE
Underlying profit attributable to shareholders was US$425 million, US$31
million higher than the prior year.
Profit attributable to shareholders was US$292 million in the first half of
2022, compared to a loss of US$865 million in the first half of 2021. This
is after including losses mainly arising from Investment Property revaluations
of US$133 million in 2022 and US$1,259 million in 2021.
The net asset value per share at 30th June 2022 was US$14.99, compared with
US$15.05 at the end of 2021.
The Directors are recommending an interim dividend of US¢6.00 per share.
GROUP REVIEW
Investment Properties
In Hong Kong, anti-pandemic measures introduced in the early part of the year
impacted the number of new office leasing enquiries and resulted in the Group
providing rental support to a select number of retail tenants. Despite these
challenges, the Group's Central office portfolio continued to benefit from a
flight to quality, as a number of new tenants committed to long-term leases.
Physical vacancy was 5.4% at the end of June 2022, compared to 5.2% at the end
of 2021 and, on a committed basis, it was 5.1%, compared to 4.9% at the end of
2021. Rental reversions were negative, reflecting lower market rents.
Average office rents were HK$112 per sq. ft. in the first half of 2022,
compared to HK$118 per sq. ft. and HK$115 per sq. ft. in the first and second
halves of 2021, respectively.
Vacancy at the Group's LANDMARK retail portfolio was unchanged from the end of
2021, although base rental reversions remained negative. Tourism has not yet
returned to Hong Kong, due to a combination of travel and quarantine
restrictions, adversely impacting retail sales levels. Average retail rents
were HK$168 per sq. ft. in the first half of 2022, compared with HK$180 per
sq. ft. and HK$190 per sq. ft. in the first and second halves of 2021,
respectively. These average rents included the impact of temporary rental
support.
Footfall and tenant sales at the Group's retail operations in Beijing and
Macau were also negatively impacted by pandemic-related restrictions, although
a number of luxury brands opened new stores as planned despite the market
challenges.
In Shanghai, city-wide lockdowns saw development activities at the multi-phase
West Bund site suspended for over two months, although construction has since
resumed.
In Singapore, the Group's office portfolio continued to benefit from healthy
leasing momentum, with average office rents increasing to S$10.5 per sq. ft.
in the first half of 2022, compared to S$10.2 per sq. ft. and S$10.3 per sq.
ft. in the first and second halves of 2021, respectively. On a committed
basis, vacancy in the Group's office portfolio remained low at 3.0%, compared
with 2.9% at the end of 2021.
Development Properties
On the Chinese mainland, there were more sales completions in the first half
of 2022, resulting in higher profits than the same period last year.
Pandemic-related shutdowns impacted construction progress at the Group's
mixed-use Galaxy Midtown project in Shanghai, possibly delaying anticipated
sales completions from the end of 2022 into early 2023.
Market sentiment was weak in a majority of the cities where the Group has a
presence, impacting contracted sales despite the continued relaxation of
cooling measures. The Group's attributable interest in contracted sales was
US$419 million in the first half of 2022, compared to US$1,360 million and
US$1,288 million in the first and second halves of 2021, respectively. At
30th June 2022, the Group had US$2,425 million in sold but unrecognised
contracted sales, compared with US$2,853 million at the end of 2021.
Results from the Group's residential development activities in Singapore
declined compared to the first half of 2021, primarily due to lower completion
progress on projects. Pre-sales at the 407-unit Piccadilly Grand project
commenced in May 2022 and it is 75% sold. The Group's attributable interest
in contracted sales was US$270 million in the first half of 2022, compared to
US$172 million and US$156 million in the first and second halves of 2021,
respectively.
Sales demand for the Group's projects in the rest of Southeast Asia was
generally subdued.
Business Development
On the Chinese mainland, the Group secured a 34% interest in a primarily
residential site in Xuhui District in Shanghai, adjacent to our 1.1 million
sq. m. mixed-used project in West Bund. The site has an attributable
developable area of 18,700 sq. m. and will feature six high-rise apartment
blocks with over 470 premium residential units.
In Singapore, the Group acquired a 49% interest in a residential site in the
Tanjong Katong area with a developable area of 599,000 sq. ft., which is
expected to yield 638 units.
Financing
Net debt at 30th June 2022 was US$6.1 billion, up from US$5.1 billion at the
end of 2021, primarily due to lower residential pre-sale proceeds, investments
in recently acquired development sites and the buyback of Group shares.
Net gearing was 18%, compared with 15% at the end of last year. As at 30th
June 2022, the Group had committed liquidity of US$2.6 billion, compared to
US$4.0 billion at the end of 2021, with an average debt tenor of 6.4 years,
compared to 6.5 years at the end of 2021. 55% of the Group's interest rate
on debt is at fixed rates, with an average hedge tenor of 7.3 years.
In September 2021, the Group announced a US$500 million share buyback
programme, of which US$491 million had been invested up to 22nd July 2022,
reducing issued share capital by 4%. An additional US$500 million has been
allocated to buy back shares until the end of 2023.
OUTLOOK
Resilient financial performance at Hongkong Land in the first half of 2022 was
pleasing to see, although contracted sales of China Development Properties
were affected by weak market sentiment. The Group's full-year underlying
profits are expected to be significantly lower than the prior year. This is
primarily due to the planned timing of sales completions and the impact of
pandemic-related restrictions on construction activities on the Chinese
mainland, which will result in some completions being deferred from the second
half of 2022 into 2023.
Ben Keswick
Chairman
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the six months ended 30th June 2022
(unaudited)
Six months ended 30th June Year ended 31st December
2022 2021 2021
Underlying Non- Total Underlying Non- Total Underlying Non-
business trading US$m business trading US$m business trading
performance items performance items performance items Total
US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 894.0 - 894.0 885.8 - 885.8 2,384.3 - 2,384.3
Net operating costs (note 3) (499.9) - (499.9) (476.4) 0.5 (475.9) (1,440.9) 2.6 (1,438.3)
Change in fair value of investment properties - (120.5) (120.5) - (1,248.8) (1,248.8) - (1,375.5) (1,375.5)
Operating profit/(loss) (note 4) 394.1 (120.5) 273.6 409.4 (1,248.3) (838.9) 943.4 (1,372.9) (429.5)
Net financing charges
- financing charges (114.4) - (114.4) (106.9) - (106.9) (222.2) - (222.2)
- financing income 24.9 - 24.9 33.8 - 33.8 67.0 - 67.0
(89.5) - (89.5) (73.1) - (73.1) (155.2) - (155.2)
Share of results of associates and 175.5 (21.4) 154.1 120.1 (4.4) 115.7 355.9 80.6 436.5
joint ventures (note 5)
Profit/(loss) before tax 480.1 (141.9) 338.2 456.4 (1,252.7) (796.3) 1,144.1 (1,292.3) (148.2)
Tax (note 6) (55.8) 6.8 (49.0) (62.1) (4.8) (66.9) (178.7) (16.9) (195.6)
Profit/(loss) after tax 424.3 (135.1) 289.2 394.3 (1,257.5) (863.2) 965.4 (1,309.2) (343.8)
Attributable to:
Shareholders of the Company
(note 7) 424.6 (132.8) 291.8 394.4 (1,259.3) (864.9) 966.0 (1,315.2) (349.2)
Non-controlling interests (0.3) (2.3) (2.6) (0.1) 1.8 1.7 (0.6) 6.0 5.4
424.3 (135.1) 289.2 394.3 (1,257.5) (863.2) 965.4 (1,309.2) (343.8)
US¢ US¢ US¢ US¢ US¢ US¢
Earnings/(loss) per share (note 8) 18.67 12.83 16.90 (37.06) 41.49 (15.00)
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
for the six months ended 30th June 2022
(unaudited) Year ended
Six months ended 31st
30th June December
2022 2021 2021
US$m US$m US$m
Profit/(loss) for the period 289.2 (863.2) (343.8)
Other comprehensive income/(expense)
Items that will not be reclassified to
profit or loss:
Remeasurements of defined benefit
plans - - 3.3
Tax on items that will not be reclassified - - (0.5)
- - 2.8
Items that may be reclassified
subsequently to profit or loss:
Net exchange translation differences
- net loss arising during the period (259.6) (55.9) (148.1)
Cash flow hedges
- net gain/(loss) arising during the period 20.4 (7.5) (11.7)
- transfer to profit and loss (2.5) (0.2) (0.1)
17.9 (7.7) (11.8)
Tax relating to items that may be
reclassified (3.0) 1.3 1.9
Share of other comprehensive (expense)/
income of associates and joint ventures (373.5) 5.8 87.1
(618.2) (56.5) (70.9)
Other comprehensive expense for the
period, net of tax (618.2) (56.5) (68.1)
Total comprehensive expense for the
period (329.0) (919.7) (411.9)
Attributable to:
Shareholders of the Company (322.7) (922.2) (419.4)
Non-controlling interests (6.3) 2.5 7.5
(329.0) (919.7) (411.9)
Hongkong Land Holdings Limited
Consolidated Balance Sheet
as 30th June 2022
(unaudited) At 31st
At 30th June December
2022 2021 2021
US$m US$m US$m
Net operating assets
Fixed assets 118.6 126.0 127.8
Right-of-use assets 14.9 10.2 12.4
Investment properties (note 10) 28,278.1 28,814.7 28,600.2
Associates and joint ventures (note 11) 9,574.0 8,990.6 9,515.3
Non-current debtors 34.6 29.9 29.7
Deferred tax assets 60.1 42.0 67.7
Pension assets 1.2 0.6 1.8
Non-current assets 38,081.5 38,014.0 38,354.9
Properties for sale 3,161.1 2,304.3 2,970.5
Current debtors 862.0 995.7 1,029.4
Current tax assets 41.4 34.5 28.3
Bank balances 746.7 2,352.9 1,479.5
Current assets 4,811.2 5,687.4 5,507.7
Current creditors (1,982.7) (2,241.8) (2,194.6)
Current borrowings (note 12) (366.6) (906.5) (865.3)
Current tax liabilities (208.9) (158.5) (202.9)
Current liabilities (2,558.2) (3,306.8) (3,262.8)
Net current assets 2,253.0 2,380.6 2,244.9
Long-term borrowings (note 12) (6,441.6) (5,708.7) (5,717.9)
Deferred tax liabilities (228.4) (204.0) (227.9)
Pension liabilities (0.1) (1.8) -
Non-current creditors (17.0) (35.6) (35.8)
33,647.4 34,444.5 34,618.2
Total equity
Share capital 224.3 233.4 229.8
Share premium - 257.3 67.4
Revenue and other reserves 33,395.0 33,922.8 34,286.6
Shareholders' funds 33,619.3 34,413.5 34,583.8
Non-controlling interests 28.1 31.0 34.4
33,647.4 34,444.5 34,618.2
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
for the six months ended 30th June 2022
Attributable to Attributable to non-
shareholders
Share Share Revenue Hedging Exchange of the Company US$m controlling interests Total equity US$m
capital premium reserves reserves reserves US$m
US$m US$m US$m US$m US$m
Six months ended 30th June 2022 (unaudited)
At 1st January 2022 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
Total comprehensive (expense)/income - - 291.8 23.9 (638.4) (322.7) (6.3) (329.0)
Dividends paid by the Company (note 9) - - (364.5) - - (364.5) - (364.5)
Repurchase of shares (5.5) (67.4) (204.4) - - (277.3) - (277.3)
At 30th June 2022 224.3 - 33,745.3 3.7 (354.0) 33,619.3 28.1 33,647.4
Six months ended 30th June 2021 (unaudited)
At 1st January 2021 233.4 257.3 34,881.2 (21.6) 358.8 35,709.1 29.4 35,738.5
Total comprehensive (expense)/income - - (864.9) (0.5) (56.8) (922.2) 2.5 (919.7)
Dividends paid by the Company (note 9) - - (373.4) - - (373.4) (0.9) (374.3)
At 30th June 2021 233.4 257.3 33,642.9 (22.1) 302.0 34,413.5 31.0 34,444.5
Year ended 31st December 2021
At 1st January 2021 233.4 257.3 34,881.2 (21.6) 358.8 35,709.1 29.4 35,738.5
Total comprehensive (expense)/income - - (346.4) 1.4 (74.4) (419.4) 7.5 (411.9)
Dividends paid by the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid to non-controlling shareholders - - - - - - (0.9) (0.9)
Unclaimed dividends forfeited - - 1.0 - - 1.0 - 1.0
Disposal of subsidiaries - - - - - - (1.6) (1.6)
Repurchase of shares (3.6) (189.9) - - - (193.5) - (193.5)
At 31st December 2021 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the six months ended 30th June 2022
(unaudited) Year ended 31st December
Six months ended
30th June
2022 2021 2021
US$m US$m US$m
Operating activities
Operating profit/(loss) 273.6 (838.9) (429.5)
Depreciation and amortisation 8.9 7.7 16.3
Change in fair value of investment properties 120.5 1,248.8 1,375.5
Gain on disposal of subsidiaries and joint
ventures - - (37.6)
Increase in properties for sale (358.8) (353.7) (991.6)
Decrease in debtors 157.0 79.2 52.4
(Decrease)/increase in creditors (143.3) 708.3 633.3
Interest received 13.3 20.1 43.2
Interest and other financing charges paid (105.0) (109.3) (215.8)
Tax paid (42.9) (79.3) (156.7)
Dividends from associates and joint ventures 42.1 39.6 239.1
Cash flows from operating activities (34.6) 722.5 528.6
Investing activities
Major renovations expenditure (41.5) (50.1) (98.9)
Developments capital expenditure - (1.5) (1.5)
Investments in and advances to associates
and joint ventures (310.6) (34.5) (397.1)
Proceeds received for disposal of subsidiaries - - 5.7
Proceeds received for disposal of joint ventures - - 59.6
Cash flows from investing activities (352.1) (86.1) (432.2)
Financing activities
Drawdown of borrowings 1,087.7 593.8 1,840.0
Repayment of borrowings (753.3) (505.1) (1,764.1)
Principal elements of lease payments (1.9) (1.4) (3.3)
Repurchase of shares (278.9) - (191.9)
Dividends paid by the Company (370.6) (369.4) (509.1)
Dividends paid to non-controlling shareholders - (0.9) (0.9)
Cash flows from financing activities (317.0) (283.0) (629.3)
Net cash (outflow)/inflow (703.7) 353.4 (532.9)
Cash and cash equivalents at beginning of period 1,476.1 1,990.4 1,990.4
Effect of exchange rate changes (30.2) 5.7 18.6
Cash and cash equivalents at end of period 742.2 2,349.5 1,476.1
Hongkong Land Holdings Limited
Notes to Condensed Financial Statements
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The condensed financial statements have been prepared in accordance with IAS
34 'Interim Financial Reporting' and on a going concern basis. The condensed
financial statements have not been audited or reviewed by the Group's auditors
pursuant to the UK Auditing Practices Board guidance on the review of interim
financial information.
There are no changes to the accounting policies as described in the 2021
annual financial statements and the Group has not early adopted any standard
or amendments that have been issued but not yet effective. The more important
amendments applicable to the Group is as follows:
Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract
(effective from 1st January 2022)
The amendments clarifies that for the purpose of assessing whether a contract
is onerous, the cost of fulfilling the contract includes both the incremental
costs of fulfilling that contract and an allocation of other costs that relate
directly to fulfilling contracts. The Group applied the amendment from 1st
January 2022 and there is no significant impact on the Group's consolidated
financial statements.
2. REVENUE
Six months ended 30th June
2022 2021
US$m US$m
Rental income 455.6 469.8
Service income 92.2 83.3
Sales of properties
- recognised at a point in time 235.4 46.0
- recognised over time 110.8 286.7
346.2 332.7
894.0 885.8
By business
Investment Properties 521.4 541.9
Development Properties 372.6 343.9
894.0 885.8
3. NET OPERATING COSTS
Six months ended 30th June
2022 2021
US$m US$m
Cost of sales (402.8) (383.9)
Other income 9.8 4.5
Administrative expenses (106.9) (97.0)
Asset impairment reversal - 0.5
(499.9) (475.9)
4. OPERATING PROFIT/(LOSS)
Six months ended 30th June
2022 2021
US$m US$m
By business
Investment Properties 412.8 431.7
Development Properties 25.9 21.2
Corporate (44.6) (43.5)
Underlying business performance 394.1 409.4
Change in fair value of investment properties (120.5) (1,248.8)
Asset impairment reversal - 0.5
273.6 (838.9)
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2022 2021
US$m US$m
By business
Investment Properties
- operating profit 68.5 70.6
- net financing charges (17.6) (16.3)
- tax (8.7) (8.7)
- net profit 42.2 45.6
Development Properties
- operating profit 196.8 120.8
- net financing charges (4.6) (4.3)
- tax (57.8) (40.4)
- non-controlling interests (1.1) (1.6)
- net profit 133.3 74.5
Underlying business performance 175.5 120.1
Change in fair value of investment properties
(net of deferred tax) (21.4) (4.4)
154.1 115.7
6. TAX
Six months ended 30th June
2022 2021
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (40.5) (62.9)
Deferred tax
- changes in fair value of investment properties 6.8 (4.8)
- other temporary differences (15.3) 0.8
(49.0) (66.9)
Tax relating to components of other comprehensive income or expense is
analysed as follows:
Cash flow hedges (3.0) 1.3
Tax on profits has been calculated at the rates of taxation prevailing in the
territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$65.2 million (2021:
US$52.7 million) is included in share of results of associates and joint
ventures.
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding
of the Group's underlying business performance. Items classified as
non-trading items include fair value gains or losses on revaluation of
investment properties; gains and losses arising from the sale of businesses
and investment properties; impairment of non-depreciable intangible assets;
provisions for the closure of businesses; acquisition-related costs in
business combinations; and other credits and charges of a non-recurring nature
that require inclusion in order to provide additional insight into underlying
business performance.
An analysis of non-trading items after interest, tax and non-controlling
interests is set out below:
Six months ended 30th June
2022 2021
US$m US$m
Change in fair value of investment properties (120.5) (1,248.8)
Deferred tax on change in fair value of investment properties 6.8 (4.8)
Share of change in fair value of investment properties of
associates and joint ventures (net of deferred tax) (21.4) (4.4)
Asset impairment reversal - 0.5
Non-controlling interests 2.3 (1.8)
(132.8) (1,259.3)
8. EARNINGS/(LOSS) PER SHARE
Earnings per share are calculated on profit attributable to shareholders of
US$291.8 million (2021: loss of US$864.9 million) and on the weighted average
number of 2,274.0 million (2021: 2,333.9 million) shares in issue during the
period.
Earnings per share are additionally calculated based on underlying profit
attributable to shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2022 2021
US$m Earnings US$m Earnings
per share per share
US¢ US¢
Underlying profit attributable to
shareholders 424.6 18.67 394.4 16.90
Non-trading items (note 7) (132.8) (1,259.3)
Profit/(loss) attributable to shareholders 291.8 12.83 (864.9) (37.06)
9. DIVIDENDS
Six months ended 30th June
2022 2021
US$m US$m
Final dividend in respect of 2021 of US¢16.00 364.5 373.4
(2020: US¢16.00) per share
An interim dividend in respect of 2022 of US¢6.00 (2021: US¢6.00) per share
amounting to a total of US$134.6 million (2021: US$140.0 million) is declared
by the Board and will be accounted for as an appropriation of revenue reserves
in the year ending 31st December 2022.
10. INVESTMENT PROPERTIES
Six months ended 30th June Year ended
31st
December
2022 2021 2021
US$m US$m US$m
At beginning of period 28,600.2 30,083.3 30,083.3
Exchange differences (232.7) (45.9) (155.7)
Additions 31.1 26.1 56.4
Disposal of subsidiaries - - (8.3)
Decrease in fair value (120.5) (1,248.8) (1,375.5)
At end of period 28,278.1 28,814.7 28,600.2
11. ASSOCIATES AND JOINT VENTURES
At 30th June At 31st
December
2022 2021 2021
US$m US$m US$m
By business
Investment Properties 4,870.3 4,907.3 5,025.9
Development Properties 4,703.7 4,083.3 4,489.4
9,574.0 8,990.6 9,515.3
12. BORROWINGS
At 30th June At 31st December
2022 2021 2021
US$m US$m US$m
Current
Bank overdrafts 4.5 3.4 3.4
Bank loans 117.8 62.4 86.0
Current portion of long-term borrowings
- bank loans 179.9 218.9 155.5
- medium term notes 64.4 621.8 620.4
366.6 906.5 865.3
Long-term
Bank loans 2,630.5 2,339.5 1,882.2
Medium term notes
- due 2022 - 65.0 -
- due 2023 178.2 179.9 179.2
- due 2024 397.8 411.0 406.8
- due 2025 643.5 645.4 644.5
- due 2026 38.3 38.6 38.6
- due 2027 184.9 186.7 186.0
- due 2028 181.4 183.2 182.5
- due 2029 120.5 121.8 121.2
- due 2030 697.3 697.9 697.7
- due 2031 568.4 25.5 568.6
- due 2032 139.2 140.6 140.0
- due 2033 88.6 89.5 89.1
- due 2034 76.6 77.4 77.1
- due 2035 252.1 254.6 253.6
- due 2038 105.8 109.5 109.0
- due 2039 106.8 110.5 109.9
- due 2040 31.7 32.1 31.9
3,811.1 3,369.2 3,835.7
6,441.6 5,708.7 5,717.9
6,808.2 6,615.2 6,583.2
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with
carrying amounts at 30th June 2022 and 31st December 2021 are as follows:
Fair value of Financial Total Fair
hedging assets at amortised costs Other carrying amount value
instruments US$m financial liabilities at amortised costs US$m US$m
US$m US$m
30th June 2022
Financial assets measured at fair value
Derivative financial instruments 23.1 - - 23.1 23.1
Financial assets not measured at fair
value
Debtors - 253.9 - 253.9 253.9
Bank balances - 746.7 - 746.7 746.7
- 1,000.6 - 1,000.6 1,000.6
Financial liabilities measured at fair
value
Derivative financial instruments (0.1) - - (0.1) (0.1)
Financial liabilities not measured at
fair value
Borrowings - - (6,808.2) (6,808.2) (6,603.0)
Trade and other payable excluding
non-financial liabilities - - (787.5) (787.5) (787.5)
- - (7,595.7) (7,595.7) (7,390.5)
31st December 2021
Financial assets measured at fair value
Derivative financial instruments 22.4 - - 22.4 22.4
Financial assets not measured at fair
value
Debtors - 247.2 - 247.2 247.2
Bank balances - 1,479.5 - 1,479.5 1,479.5
- 1,726.7 - 1,726.7 1,726.7
Financial liabilities measured at fair
value
Derivative financial instruments (17.6) - - (17.6) (17.6)
Financial liabilities not measured at
fair value
Borrowings - - (6,583.2) (6,583.2) (6,810.0)
Trade and other payable excluding
non-financial liabilities - - (948.2) (948.2) (948.2)
- - (7,531.4) (7,531.4) (7,758.2)
Fair value estimation
(a) Financial instruments that are measured at fair value based on observable
current market transactions
At 30th June 2022 At 31st December
US$m 2021
US$m
Assets
Derivative designated at fair value
- through other comprehensive income 22.1 9.9
- through profit and loss 1.0 12.5
23.1 22.4
Liabilities
Derivative designated at fair value
- through other comprehensive income (0.1) (17.6)
The fair values of derivative financial instruments are determined using rates
quoted by the Group's bankers at the balance sheet date. The rates for
interest rate swaps and forward foreign exchange contracts are calculated by
reference to market interest rates and foreign exchange rates.
There were no changes in valuation techniques during the six months ended 30th
June 2022 and the year ended 31st December 2021.
(b) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances, current creditors, current
borrowings and current lease liabilities are assumed to approximate their
carrying amounts due to the short-term maturities of these assets and
liabilities.
The fair values of long-term borrowings are based on market prices or are
estimated using the expected future payments discounted at market interest
rates. The fair values of non-current lease liabilities are estimated using
the expected future payments discounted at market interest rates.
14. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2022 and 31st December 2021 amounted to
US$1,049.8 million and US$1,183.5 million, respectively.
Various Group companies are involved in litigation arising in the ordinary
course of their respective businesses. Having reviewed outstanding claims
and taking into account legal advice received, the Directors are of the
opinion that adequate provisions have been made in the condensed financial
statements.
15. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Limited ('JSL') and the
ultimate parent company of the Group is Jardine Matheson Holdings Limited
('JMH'). Both JMH and JSL are incorporated in Bermuda.
In the normal course of business, the Group has entered into a variety of
transactions with the subsidiaries, associates and joint ventures of JMH
('Jardine Matheson group members'). The more significant of these
transactions during the six months ended 30th June 2022 are described below:
Management fee
The management fee payable by the Group, under an agreement entered into in
1995, to Jardine Matheson Limited ('JML') was US$2.1 million (2021: US$2.0
million), being 0.5% per annum of the Group's underlying profit in
consideration for management consultancy services provided by JML, a
wholly-owned subsidiary of JMH.
Property and other services
The Group rented properties to Jardine Matheson group members. Gross rents
on such properties amounted to US$8.4 million (2021: US$9.5 million).
The Group provided project management services and property management
services to Jardine Matheson group members amounting to US$1.3 million (2021:
US$1.1 million).
Jardine Matheson group members provided property maintenance and other
services to the Group in aggregate amounting to US$26.2 million (2021: US$22.8
million).
Hotel management services
Jardine Matheson group members provided hotel management services to the Group
amounting to US$1.0 million (2021: US$1.2 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint ventures are
included in debtors and creditors as appropriate.
Hongkong Land Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal
control. The following have been identified previously as the areas of
principal risk and uncertainty facing the Company, and they remain unchanged:
• Economic Risk
• Commercial Risk
· Financial and Treasury Risk
• Regulatory and Political Risk
· Key Contracts Risk
• Pandemic, Terrorism and Natural Disasters Risk
• Cybersecurity Risk
· People Risk
· Investment, Strategic Transactions and Partnerships Risk
· Environmental and Climate Risk
For greater detail, please refer to pages 98 to 101 of the Company's Annual
Report for 2021, a copy of which is available on the Company's website
www.hkland.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance with
IAS 34; and
(b) the interim management report includes a fair review of all information
required to be disclosed by the Disclosure Guidance and Transparency Rules
4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United
Kingdom.
For and on behalf of the Board
Robert Wong
Craig Beattie
Directors
Dividend Information for Shareholders
The interim dividend of US¢6.00 per share will be payable on 12th October
2022 to shareholders on the register of members at the close of business on
19th August 2022. The shares will be quoted ex-dividend on 18th August 2022,
and the share registers will be closed from 22nd to 26th August 2022,
inclusive.
Shareholders will receive their cash dividends in United States Dollars,
except when elections are made for alternate currencies in the following
circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register will have the option to
elect for their dividends to be paid in Sterling. These shareholders may
make new currency elections for the 2022 interim dividend by notifying the
United Kingdom transfer agent in writing by 23rd September 2022. The
Sterling equivalent of dividends declared in United States Dollars will be
calculated by reference to a rate prevailing on 28th September 2022.
Shareholders holding their shares through CREST in the United Kingdom will
receive their cash dividends in Sterling only as calculated above.
Shareholders on the Singapore branch register who hold their shares through
The Central Depository (Pte) Limited ('CDP')
Shareholders who are on CDP's Direct Crediting Service ('DCS')
Those shareholders who are on CDP's DCS will receive their cash dividends in
Singapore Dollars unless they opt out of CDP Currency Conversion Service,
through CDP, to receive United States Dollars.
Shareholders who are not on CDP's DCS
Those shareholders who are not on CDP's DCS will receive their cash dividends
in United States Dollars unless they elect, through CDP, to receive Singapore
Dollars.
Shareholders on the Singapore branch register who wish to deposit their shares
into the CDP system by the dividend record date, being 19th August 2022, must
submit the relevant documents to M & C Services Private Limited, the
Singapore branch registrar, by no later than 5.00 p.m. (local time) on 18th
August 2022.
About Hongkong Land Group
Hongkong Land is a major listed property investment, management and
development group. Founded in 1889, Hongkong Land's business is built on
excellence, integrity and partnership.
The Group owns and manages more than 850,000 sq. m. of prime office and luxury
retail property in key Asian cities, principally Hong Kong, Singapore, Beijing
and Jakarta. Its properties attract the world's foremost companies and
luxury brands.
The Group's Central Hong Kong portfolio represents some 450,000 sq. m. of
prime property. It has a further 165,000 sq. m. of prestigious office space
in Singapore mainly held through joint ventures, four retail centres on the
Chinese mainland, including a luxury retail centre at Wangfujing in Beijing,
and a 50% interest in a leading office complex in Central Jakarta. The Group
also has a number of high-quality residential, commercial and mixed-use
projects under development in cities across China and Southeast Asia,
including a 43% interest in a 1.1 million sq. m. mixed-use project in West
Bund, Shanghai. Its subsidiary, MCL Land, is a well-established residential
developer in Singapore.
Hongkong Land Holdings Limited is incorporated in Bermuda and has a primary
listing on the London Stock Exchange, with secondary listings in Bermuda and
Singapore. The Group's assets and investments are managed from Hong Kong by
Hongkong Land Limited. Hongkong Land is a member of the Jardine Matheson
Group.
- end -
For further information, please contact:
Hongkong Land Limited
Mark Lam (852) 2842 8211
Gary Leung (852) 2842 8601
Brunswick Group Limited
Nan Dong (852) 9768 8379
As permitted by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority in the United Kingdom, the Company will not be
posting a printed version of the Half-Year Results announcement for the six
months ended 30th June 2022 to shareholders. This Half-Year Results
announcement will be made available on the Company's website, www.hkland.com,
together with other Group announcements.
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