REG - Hongkong Land HldgsJardine Matheson HdgJardine Strategic - Half Yearly Report <Origin Href="QuoteRef">HKLD.SI</Origin> <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 1
06/09/2014 22:45
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RNS Number : 8577N
Hongkong Land Hldgs Ltd
31 July 2014
To: Business Editor 31st July 2014For immediate release
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-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2014
Highlights
· Underlying profit down 17% due to lack of residential completions in Singapore
· Continued strong performance in Hong Kong portfolio
· Stable asset values
"The solid performance in the Group's commercial portfolio is set to continue in the second half, while the contribution
from our residential business will show improvement as it benefits from the final sales at Serenade as well as further
completions in mainland China and Singapore."
Ben Keswick, Chairman
31st July 2014
Results
(unaudited)
Six months ended 30th June
2014 2013 Change
US$m US$m %
Underlying profit attributable to shareholders# 433 519 -17
Profit attributable to shareholders 563 598 -6
Shareholders' funds 27,121 26,857* +1
Net debt 3,223 3,025* +7
US¢ US¢ %
Underlying earnings per share# 18.38 22.08 -17
Earnings per share 23.91 25.43 -6
Interim dividend per share 6.00 6.00 -
US$ US$ %
Net asset value per share 11.53 11.41* +1
# 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 8 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 2013
The interim dividend of US¢6.00 per share will be payable on 15th October 2014 to shareholders on the register of members
at the close of business on 22nd August 2014. The ex-dividend date will be on 20th August 2014, and the share registers
will be closed from 25th to 29th August 2014, inclusive.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2014
OVERVIEW
Conditions across the Group's key commercial property markets in the first half of the year were broadly stable, although
softening was seen in the Group's residential markets. The contribution from commercial property activities increased, but
the absence of residential project completions in Singapore led to an overall decline in earnings.
PERFORMANCE
The Group's underlying profit attributable to shareholders for the first half of 2014 was US$433 million compared with
US$519 million in 2013.
The profit attributable to shareholders was US$563 million for the first half, compared with US$598 million in 2013.
Non-trading gains of US$130 million were recorded following an independent valuation at 30th June 2014 of the Group's
investment properties, including its share of properties in joint ventures. This compares to a US$79 million net gain in
the first six months of 2013. The net asset value per share was relatively stable at US$11.53, compared with US$11.41 at
the prior year end.
The Directors have declared an interim dividend of US¢6.00 per share, unchanged from the prior year.
GROUP REVIEW
Commercial Property
Sentiment was cautious in the Hong Kong office leasing market as demand remained lacklustre despite increased leasing
enquiries. Nevertheless, rental reversions were positive overall in the first half. The market should continue to benefit
from the limited supply of new Grade A office space expected over the next few years.
During the period, the Group's average office rent increased to HK$103 per sq. ft from HK$97 per sq. ft and HK$101 per sq.
ft in the first and second half of 2013, respectively. Vacancy at the end of June was 6.0%, compared with 5.0% at the end
of December 2013. The Group's retail space remains full and rental reversions are positive, with the average retail rent
now at HK$210 per sq. ft, compared with HK$201 per sq. ft throughout 2013.
There was some evidence of increasing demand in the Singapore office leasing market. Results from the Group's office
portfolio were stable and vacancy, at 1.4%, was little changed from the end of 2013. In Jakarta, the Group's 50%-owned
office portfolio was 96% let, up from 94% at the end of last year.
The Group has several new projects under development, including a luxury retail complex at Wangfujing in Beijing, an office
tower in central Jakarta and a mixed-use development in Phnom Penh, where progress is continuing satisfactorily.
Residential Property
The contribution from the Group's residential business was significantly lower than in the first half of 2013 when two
large projects were completed: MCL Land's 608-unit The Estuary project and the one-third owned Marina Bay Suites
development at the Marina Bay Financial Centre complex. There were no Singapore projects completed in the first half of
2014, although US$34 million of writedowns previously made were reversed due to positive sales activity in current
developments, principally at the Hallmark Residences project.
MCL Land is scheduled to complete two Singapore projects in the second half of the year; Terrasse, a 414-unit apartment
complex that is fully pre-sold, and Uber 388, a 95-unit project which is 98% pre-sold. Palms@Sixth Avenue, a luxury
development of 32 freehold townhouses which is 38% pre-sold and the 75-unit Hallmark Residences project, which is 59%
pre-sold, will both now be completed in early 2015. The fully pre-sold 679 apartments at Ripple Bay are also scheduled for
completion in 2015.
MCL Land also launched its LakeVille project in Jurong in April, where 31% of the units have been pre-sold. The project is
scheduled for completion in 2017. In the first half of the year, MCL Land completed its acquisition of two adjacent
development sites in Singapore for approximately US$350 million on which 1,238 units are planned for construction.
In Hong Kong, the Group benefited from the completion of further sales at its Serenade project. There were ten units
handed over to buyers in the first half of 2014, compared with five units in the first half of 2013. The Group also saw
further sales completions at its 50%-owned Bamboo Grove project in Chongqing.
The Group's attributable interest in contracted sales across its residential projects in mainland China was US$262 million
in the first six months of the year, compared with US$369 million and US$263 million in the first and second half of 2013,
respectively. While there were fewer sales launches, the decrease resulted mainly from general market uncertainty and a
less liquid mortgage market. At 30th June 2014, the Group had US$680 million in sold but unrecognised contracted sales,
compared with US$534 million at the end of 2013.
In Indonesia, work is progressing well at the Group's two joint venture residential projects, Nava Park, southwest of
central Jakarta, and Anandamaya Residences, in the heart of Jakarta. Plans are on schedule for initial launches in the
second half of 2014. The Group continues to monitor opportunities across the region.
FINANCE
The Group's financial position continues to be strong with net debt at 30th June 2014 at US$3.2 billion, compared with
US$3.0 billion at the end of 2013. Gearing was 12%, little changed from 11% at the end of last year.
CORPORATE DEVELOPMENTS
On 27th May 2014, the transfer of the Company's listing on the Main Market of the London Stock Exchange to the standard
listing category was completed, following shareholder approval at a Special General Meeting in April.
OUTLOOK
The solid performance in the Group's commercial portfolio is set to continue in the second half, while the contribution
from our residential business will show improvement as it benefits from the final sales at Serenade as well as further
completions in mainland China and Singapore.
Ben Keswick
Chairman
31st July 2014
Hongkong Land Holdings LimitedConsolidated Profit and Loss Account
(unaudited)Six months ended 30th June Year ended 31st December
2014 2013 2013
Underlying Non- Underlying Non- Underlying Non-
business trading business trading business trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 602.2 - 602.2 912.0 - 912.0 1,857.1 - 1,857.1
Net operating costs (note 3) (140.6) (1.1) (141.7) (433.0) - (433.0) (940.5) - (940.5)
Change in fair value of investment properties - 15.6 15.6 - (43.4) (43.4) - (81.9) (81.9)
Operating profit (note 4) 461.6 14.5 476.1 479.0 (43.4) 435.6 916.6 (81.9) 834.7
Financing charges (57.3) - (57.3) (51.6) - (51.6) (106.2) - (106.2)
Financing income 22.7 - 22.7 19.3 - 19.3 42.2 - 42.2
Net financing charges (34.6) - (34.6) (32.3) - (32.3) (64.0) - (64.0)
Share of results of associates and joint ventures (note 5) 75.6 123.1 198.7 155.3 130.9 286.2 235.2 351.3 586.5
Profit before tax 502.6 137.6 640.2 602.0 87.5 689.5 1,087.8 269.4 1,357.2
Tax (note 6) (68.2) (4.3) (72.5) (80.5) (5.7) (86.2) (149.0) (8.1) (157.1)
Profit after tax 434.4 133.3 567.7 521.5 81.8 603.3 938.8 261.3 1,200.1
Attributable to:
Shareholders of the Company 432.5 130.0 562.5 519.4 79.0 598.4 934.8 254.8 1,189.6
Non-controlling interests 1.9 3.3 5.2 2.1 2.8 4.9 4.0 6.5 10.5
434.4 133.3 567.7 521.5 81.8 603.3 938.8 261.3 1,200.1
US¢ US¢ US¢ US¢ US¢ US¢
Earnings per share (note 7) 18.38 23.91 22.08 25.43 39.73 50.56
Hongkong Land Holdings LimitedConsolidated Statement of Comprehensive Income
(unaudited)Six months ended30th June Year ended31stDecember
2014US$m 2013US$m 2013US$m
Profit for the period 567.7 603.3 1,200.1
Other comprehensive expense
Items that will not be reclassified to
profit or loss:
Remeasurements of defined benefit
plans - - 3.4
Tax on items that will not be reclassified - - (0.6)
- - 2.8
Items that may be reclassified
subsequently to profit or loss:
Net exchange translation differences (11.4) (44.4) (10.9)
Revaluation of other investments (6.8) (19.3) (23.0)
Cash flow hedges
- net gain arising during the period 7.2 9.2 3.9
- transfer to profit and loss (0.2) 1.0 1.4
7.0 10.2 5.3
Tax relating to items that may be
reclassified (1.2) (1.4) (0.6)
Share of other comprehensive expense
of associates and joint ventures (5.7) (46.4) (51.9)
(18.1) (101.3) (81.1)
Other comprehensive expense
for the period, net of tax (18.1) (101.3) (78.3)
Total comprehensive income for the
period 549.6 502.0 1,121.8
Attributable to:
Shareholders of the Company 545.9 496.8 1,109.3
Non-controlling interests 3.7 5.2 12.5
549.6 502.0 1,121.8
Hongkong Land Holdings LimitedConsolidated Balance Sheet
(unaudited)At 30th June At 31stDecember
2014US$m 2013US$m 2013US$m
Net operating assets
Leasehold land 7.6 6.8 7.4
Tangible fixed assets 13.5 5.9 11.8
Investment properties (note 10) 23,682.5 23,511.8 23,583.0
Associates and joint ventures 5,086.8 4,453.1 4,930.4
Other investments 50.7 71.1 57.5
Non-current debtors 37.1 27.9 25.2
Deferred tax assets 6.3 4.3 5.5
Pension assets 7.6 5.1 8.0
Non-current assets 28,892.1 28,086.0 28,628.8
Properties for sale 3,195.4 2,677.0 2,670.2
Current debtors 267.2 409.1 273.7
Current tax assets 21.3 16.7 16.9
Bank balances 1,348.5 1,046.5 1,406.3
Current assets 4,832.4 4,149.3 4,367.1
Current creditors (1,704.6) (1,176.2) (1,408.9)
Current borrowings (note 11) (1.3) (852.4) (712.1)
Current tax liabilities (104.4) (95.9) (71.3)
Current liabilities (1,810.3) (2,124.5) (2,192.3)
Net current assets 3,022.1 2,024.8 2,174.8
Long-term borrowings (note 11) (4,570.1) (3,509.7) (3,719.4)
Deferred tax liabilities (86.3) (84.8) (83.1)
Non-current creditors (93.4) (91.1) (102.0)
27,164.4 26,425.2 26,899.1
Total equity
Share capital 235.3 235.3 235.3
Revenue and other reserves 26,885.3 26,150.4 26,621.7
Shareholders' funds 27,120.6 26,385.7 26,857.0
Non-controlling interests 43.8 39.5 42.1
27,164.4 26,425.2 26,899.1
Hongkong Land Holdings
Limited Consolidated
Statement of Changes in
Equity
Attributable toshareholders Attributable to non-
SharecapitalUS$m SharepremiumUS$m RevenuereservesUS$m HedgingreservesUS$m ExchangereservesUS$m of the Company US$m controlling interestsUS$m Total equity US$m
Six months ended 30th June
2014
At 1st January 2014 235.3 370.0 25,753.3 (0.4) 498.8 26,857.0 42.1 26,899.1
Total comprehensive income - - 555.7 6.1 (15.9) 545.9 3.7 549.6
Dividends paid by the - - (282.3) - - (282.3) - (282.3)
Company
Dividends paid to non - - - - - - (2.0) (2.0)
-controlling shareholders
At 30th June 2014 235.3 370.0 26,026.7 5.7 482.9 27,120.6 43.8 27,164.4
Six months ended 30th June
2013
At 1st January 2013 235.3 370.0 24,983.9 (5.9) 564.4 26,147.7 36.7 26,184.4
Total comprehensive income - - 579.1 9.5 (91.8) 496.8 5.2 502.0
Dividends paid by the - - (258.8) - - (258.8) - (258.8)
Company
Dividends paid to non - - - - - - (2.4) (2.4)
-controlling shareholders
At 30th June 2013 235.3 370.0 25,304.2 3.6 472.6 26,385.7 39.5 26,425.2
Total comprehensive income
for the six months ended
30th June 2014 included in
revenue reserves comprises
profit attributable to
shareholders of the Company
of US$562.5 million (2013:
US$598.4 million) and a fair
value loss on other
investments of US$6.8
million (2013: US$19.3
million). Cumulative fair
value gain on other
investments amounted to
US$12.9 million.
Attributable toshareholders Attributable to non-
SharecapitalUS$m SharepremiumUS$m RevenuereservesUS$m HedgingreservesUS$m ExchangereservesUS$m of the CompanyUS$m controlling interestsUS$m Totalequity US$m
Year ended 31st December
2013
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