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 2
06/09/2014 22:45
- Part 2: For the preceding part double click ID:nRSe8577Na
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 - - 1,169.4 5.5 (65.6) 1,109.3 12.5 1,121.8
Dividends paid by the - - (400.0) - - (400.0) - (400.0)
Company
Dividends paid to non - - - - - - (7.1) (7.1)
-controlling shareholders
At 31st December 2013 235.3 370.0 25,753.3 (0.4) 498.8 26,857.0 42.1 26,899.1
Total comprehensive income
for the year ended 31st
December 2013 included in
revenue reserves comprises
profit attributable to
shareholders of the Company
of US$1,189.6 million and a
fair value loss on other
investments of US$23.0
million. Cumulative fair
value gain on other
investments amounted to
US$19.7 million.
Hongkong Land Holdings Limited Consolidated Cash Flow Statement
(unaudited)Six months ended 30th June Year ended 31st December
2014US$m 2013US$m 2013US$m
Operating activities
Operating profit 476.1 435.6 834.7
Depreciation 1.2 1.1 2.4
Reversal of writedowns on properties for sale (33.5) (6.9) (12.4)
Change in fair value of investment properties (15.6) 43.4 81.9
Increase in properties for sale (501.4) (190.0) (159.7)
Increase in debtors (4.3) (40.0) (19.2)
Increase in creditors 322.5 27.5 245.2
Interest received 28.6 20.3 39.7
Interest and other financing charges paid (68.0) (65.6) (116.7)
Tax paid (43.1) (41.1) (139.1)
Dividends from associates and joint ventures 64.3 43.1 151.1
Cash flows from operating activities 226.8 227.4 907.9
Investing activities
Major renovations expenditure (22.6) (25.5) (40.2)
Developments capital expenditure (75.5) (53.9) (134.0)
Investments in and loans to associates and
joint ventures (7.2) (21.6) (317.5)
Refund/(payment) of deposit for joint
ventures/other investments - (7.7) 114.1
Cash flows from investing activities (105.3) (108.7) (377.6)
Financing activities
Drawdown of borrowings 1,204.0 797.8 1,136.3
Repayment of borrowings (1,089.8) (595.7) (849.5)
Contribution from non-controlling
shareholders - - 1.1
Dividends paid by the Company (280.1) (256.6) (397.4)
Dividends paid to non-controlling
shareholders (2.0) (2.0) (7.1)
Cash flows from financing activities (167.9) (56.5) (116.6)
Effect of exchange rate changes (8.7) 2.1 7.6
Net (decrease)/increase in cash and cash
equivalents (55.1) 64.3 421.3
Cash and cash equivalents at beginning of
period 1,402.3 981.0 981.0
Cash and cash equivalents at end of period 1,347.2 1,045.3 1,402.3
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'. The
condensed financial statements have been prepared on a going concern basis. The condensed financial statements have not
been audited or reviewed by the Group's auditor pursuant to the UK Auditing Practices Board guidance on the review of
interim financial information.
The following amendments and interpretations which are effective in the current accounting period and relevant to the
Group's operations are adopted in 2014:
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets
Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting
IFRIC 21 Levies
Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities' are made to the application guidance in IAS 32
and clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet.
Specifically, the amendments clarify the meaning of 'currently has a legally enforceable right of offset' and 'simultaneous
realisation and settlement'.
Amendments to IAS 36 'Recoverable Amount Disclosures for Non-Financial Assets' set out the changes to the disclosures when
recoverable amount is determined based on fair value less costs of disposal. The key amendments are (a) to remove the
requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or indefinite lived
intangible assets but there has been no impairment, (b) to require disclosure of the recoverable amount of an asset or CGU
when an impairment loss has been recognised or reversed, and (c) to require detailed disclosure of how the fair value less
costs of disposal has been measured when an impairment loss has been recognised or reversed.
Amendments to IAS 39 'Novation of Derivatives and Continuation of Hedge Accounting' provide relief from discontinuing hedge
accounting when novation of a hedging instrument to a central counterparty meets specified criteria.
IFRIC 21 'Levies' sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation
clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant
legislation that triggers the payment of the levy.
There have been no changes to the accounting policies described in the 2013 annual financial statements upon the adoption
of the above amendments and interpretation to existing standards. The adoption of these amendments and interpretation do
not have any significant impact on the results or financial position of the Group.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
2. REVENUE
Six months ended 30th June
2014US$m 2013US$m
Rental income 424.3 398.2
Service income 62.1 59.4
Sales of trading properties 115.8 454.4
602.2 912.0
Service income includes service and management charges and hospitality service income.
3. NET OPERATING COSTS
Six months ended 30th June
2014US$m 2013US$m
Cost of sales (96.6) (392.9)
Other income 3.9 4.8
Administrative expenses (49.0) (44.9)
(141.7) (433.0)
4. OPERATING PROFIT
Six months ended 30th June
2014US$m 2013US$m
By business
Commercial Property 406.7 390.2
Residential Property 85.1 116.1
Corporate (30.2) (27.3)
Underlying business performance 461.6 479.0
Non-trading items
Change in fair value of investment properties
- Commercial Property 16.3 (39.9)
- Residential Property (0.7) (3.5)
15.6 (43.4)
Others (1.1) -
14.5 (43.4)
476.1 435.6
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2014US$m 2013US$m
By business
Commercial Property
- operating profit 77.8 69.0
- net financing charges (18.0) (19.0)
- tax (9.6) (5.5)
- net profit 50.2 44.5
Residential Property
- operating profit 38.6 139.2
- net financing charges 0.4 (1.0)
- tax (13.4) (27.6)
- non-controlling interests (0.2) 0.2
- net profit 25.4 110.8
Underlying business performance 75.6 155.3
Change in fair value of investment properties
(net of deferred tax)
- Commercial Property 124.8 129.8
- Residential Property (1.7) 1.1
123.1 130.9
198.7 286.2
6. TAX
Six months ended 30th June
2014US$m 2013US$m
Tax charged to profit and loss is analysed as follows:
Current tax (71.2) (68.1)
Deferred tax
- changes in fair value of investment properties (4.3) (5.7)
- other temporary differences 3.0 (12.4)
(72.5) (86.2)
Tax relating to components of other comprehensive income is analysed as follows:
Cash flow hedges (1.2) (1.4)
Tax on profits has been calculated at the rates of taxation prevailing in the territories in which the Group operates. The
Group has no tax payable in the United Kingdom (2013: nil).
Share of tax of associates and joint ventures of US$33.5 million (2013: US$42.0 million) is included in share of results of
associates and joint ventures.
7. EARNINGS PER SHARE
Earnings per share are calculated on profit attributable to shareholders of US$562.5 million (2013: US$598.4 million) and
on the weighted average number of 2,352.8 million (2013: 2,352.8 million) shares in issue during the period.
Earnings per share are additionally calculated based on underlying profit attributable to shareholders. A reconciliation
of earnings is set out below:
Six months ended 30th June
2014 2013
US$m Earningsper shareUS¢ US$m Earningsper shareUS¢
Underlying profit attributable to shareholders 432.5 18.38 519.4 22.08
Non-trading items (note 8) 130.0 79.0
Profit attributable to shareholders 562.5 23.91 598.4 25.43
8. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment
properties; gains and losses arising from the sale of businesses, investments and investment properties; impairment of
non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related
costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to
provide additional insight into underlying business performance.
An analysis of non-trading items is set out below:
Six months ended 30th June
2014US$m 2013US$m
Change in fair value of investment properties 15.6 (43.4)
Deferred tax on change in fair value of investment properties (4.3) (5.7)
Share of change in fair value of investment properties of
associates and joint ventures (net of deferred tax) 123.1 130.9
Others (1.1) -
Non-controlling interests (3.3) (2.8)
130.0 79.0
9. DIVIDENDS
Six months ended 30th June
2014US$m 2013US$m
Final dividend in respect of 2013 of US¢12.00(2012: US¢11.00) per share 282.3 258.8
An interim dividend in respect of 2014 of US¢6.00 (2013: US¢6.00) per share amounting to a total of US$141.2 million (2013:
US$141.2 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year
ending 31st December 2014.
10. INVESTMENT PROPERTIES
Six months ended 30th June Year ended31stDecember
2014US$m 2013US$m 2013US$m
Net book value at beginning of period 23,583.0 23,493.7 23,493.7
Exchange differences 3.4 (32.0) (16.0)
Additions 80.5 93.5 187.2
Net increase/(decrease) in fair value 15.6 (43.4) (81.9)
Net book value at end of period 23,682.5 23,511.8 23,583.0
11. BORROWINGS
At 30th June At 31st December
2014US$m 2013US$m 2013US$m
Current
Bank overdrafts 1.3 1.2 4.0
Current portion of long-term borrowings
- bank loans - 334.4 201.2
- 5.5% United States dollar notes due 2014 - 516.8 506.9
1.3 852.4 712.1
At 30th June At 31st December
2014US$m 2013US$m 2013US$m
Long-term
Bank loans 1,364.7 1,000.6 997.8
3.65% Singapore dollar notes due 2015 300.8 297.5 297.2
Medium term notes
- due 2017 42.2 41.7 41.7
- due 2019 103.1 103.0 103.0
- due 2020 317.7 315.3 314.7
- due 2021 68.2 68.0 66.8
- due 2022 591.5 584.6 578.9
- due 2023 179.2 - 179.1
- due 2024 401.6 - -
- due 2025 655.1 656.3 655.7
- due 2026 38.6 38.5 38.6
- due 2027 186.0 185.7 185.8
- due 2028 79.6 38.0 79.5
- due 2029 50.8 - -
- due 2030 103.2 103.1 103.2
- due 2031 25.4 25.4 25.4
- due 2032 30.3 19.9 19.9
- due 2040 32.1 32.1 32.1
2,904.6 2,211.6 2,424.4
4,570.1 3,509.7 3,719.4
4,571.4 4,362.1 4,431.5
12. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2014 and 31st
December 2013 are as follows:
Loans and receivablesUS$m DerivativesUS$m Available-for-saleUS$m Other financial liabilities at amortised costUS$m Total carrying amountUS$m FairvalueUS$m
30th June 2014
Assets
Other investments - - 50.7 - 50.7 50.7
Debtors 129.2 23.4 - - 152.6 152.6
Bank balances 1,348.5 - - - 1,348.5 1,348.5
1,477.7 23.4 50.7 - 1,551.8 1,551.8
Liabilities
Borrowings - - - (4,571.4) (4,571.4) (4,590.0)
Creditors excluding
non-financial liabilities - (35.8) - (722.8) (758.6) (758.6)
- (35.8) - (5,294.2) (5,330.0) (5,348.6)
Loans and receivablesUS$m DerivativesUS$m Available-for-saleUS$m Other financial liabilities at amortised costUS$m Total carrying amountUS$m FairvalueUS$m
31st December 2013
Assets
Other investments - - 57.5 - 57.5 57.5
Debtors 157.2 15.3 - - 172.5 172.5
Bank balances 1,406.3 - - - 1,406.3 1,406.3
1,563.5 15.3 57.5 - 1,636.3 1,636.3
Liabilities
Borrowings - - - (4,431.5) (4,431.5) (4,348.1)
Creditors excluding
non-financial liabilities - (48.9) - (769.6) (818.5) (818.5)
- (48.9) - (5,201.1) (5,250.0) (5,166.6)
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements
are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair value of listed securities, which are classified as available-for-sale, is based on quoted prices in active
markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current
bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or
indirectly ('observable current market transactions')
The fair values of all interest rate swaps, cross-currency swaps and forward foreign exchange contracts are determined
using rates quoted by the Group's bankers at the balance sheet date which are calculated by reference to market interest
rates and foreign exchange rates.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair value of unlisted securities, which are classified as available-for-sale, is determined using valuation techniques
by reference to observable current market transactions (including price-earnings and price-book multiples of listed
securities of entities engaged in similar industries) or the market prices of the underlying investments with certain
degree of entity specific estimates.
There were no changes in valuation techniques during the period.
The table below analyses financial instruments carried at fair value at 30th June 2014 and 31st December 2013, by the
levels in the fair value measurement hierarchy:
Quoted prices in active marketsUS$m ObservablecurrentmarkettransactionsUS$m TotalUS$m
30th June 2014
Assets
Available-for-sale financial assets
- listed securities 50.7 - 50.7
Derivative financial instruments - 23.4 23.4
50.7 23.4 74.1
Liabilities
Derivative financial instruments - (35.8) (35.8)
31st December 2013
Assets
Available-for-sale financial assets
- listed securities 57.5 - 57.5
Derivative financial instruments - 15.3 15.3
57.5 15.3 72.8
Liabilities
Derivative financial instruments - (48.9) (48.9)
There were no transfers among the three categories during the period.
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances, current creditors and current borrowings 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.
13. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2014 and 31st December 2013 amounted to US$816.8 million and US$947.1 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.
14. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate holding company is Jardine Matheson
Holdings Limited ('JMH'). Both companies 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 are described
below:
Management fee
The management fee payable by the Group, under an agreement entered into in 1995, to Jardine Matheson Limited ('JML') in
2014 was US$2.2 million (2013: US$2.6million), 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 in 2014 amounted to US$9.6
million (2013: US$9.6 million).
The Group provided project consultancy services to Jardine Matheson group members in 2014 amounting to US$0.2 million
(2013: US$0.2 million).
Jardine Matheson group members provided property construction, maintenance and other services to the Group in 2014 in
aggregate amounting to US$13.4 million (2013: US$27.4 million).
The outstanding balances arising from the above services at 30th June 2014 were not material.
Hotel management services
Jardine Matheson group members provided hotel management services to the Group in 2014 amounting to US$1.7 million (2013:
US$1.4 million).
The outstanding balances arising from the above services at 30th June 2014 were not material.
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 relevant in the second half
of the year:
• Economic Risk
• Commercial Risk and Financial Risk
• Regulatory and Political Risk
• Terrorism, Pandemic and Natural Disasters
For greater detail, please refer to page 74 of the Company's Annual Report for 2013, 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 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
Y.K. Pang
John R. Witt
Directors
31st July 2014
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. Shareholders will receive their
dividends in United States dollars, unless they are registered on the Jersey branch register where they will have the option to elect for sterling. These shareholders
may make new currency elections for the 2014 interim dividend by notifying the United Kingdom transfer agent in writing by 26th September 2014. The sterling equivalent
of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 30th September 2014. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States dollars unless they elect, through CDP, to receive Singapore dollars.
Hongkong Land Group
Hongkong Land is one of Asia's leading property investment, management and development groups. Founded in 1889, Hongkong
Land's business is built on excellence, integrity and partnership.
The Group owns and manages almost 800,000 sq. m. of prime office and luxury retail property in key Asian cities,
principally in Hong Kong and Singapore. Hongkong Land's properties attract the world's foremost companies and luxury
brands.
The Group's prime Hong Kong portfolio of some 450,000 sq. m. is located in the heart of the Central district. In
Singapore, its 165,000 sq. m. portfolio consists largely of prestigious office space located at Marina Bay, much of which
is held through joint ventures. The Group also has a 50% interest in a prime office complex in Central Jakarta, and has a
number of projects under development that include a luxury retail centre at Wangfujing in Beijing.
Hongkong Land is developing a number of largely residential projects, in cities across Greater China and Southeast Asia.
In Singapore, its subsidiary, MCL Land, is a well-established residential developer.
Hongkong Land Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange as its
primary listing, 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
Y.K. Pang (852) 2842 8428
John R. Witt (852) 2842 8101
GolinHarris
Carol Chan (852) 2501 7902
As permitted by the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company
will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results
announcement will remain available on the Company's website, www.hkland.com, together with other Group announcements.
This information is provided by RNS
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