REG - Hongkong Land HldgsJardine Matheson HdgJardine Strategic - Half Yearly Results <Origin Href="QuoteRef">HKLD.SI</Origin> <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 2
03/08/2017 10:10
- Part 2: For the preceding part double click ID:nRSC8227Ma
Dividends paid to non - - - - - - (0.3) (0.3)
-controlling
shareholders
At 30th June 2016 235.3 386.9 29,155.5 15.5 (50.0) 29,743.2 30.7 29,773.9
Total comprehensive
income for the six
months ended 30th June
2017 included in
revenue reserves mainly
comprises profit
attributable to
shareholders of the
Company of US$3,125.3
million (2016:
US$1,263.4 million) and
a fair value gain on
other investments of
US$36.7 million (2016:
a loss of US$7.9
million). The
cumulative fair value
gain on other
investments amounted to
US$51.1 million (2016:
US$15.6 million).
Year ended 31st
December 2016
At 1st January 2016 235.3 386.9 28,205.8 (9.1) (133.9) 28,685.0 35.4 28,720.4
Total comprehensive - - 3,336.2 27.7 (308.7) 3,055.2 (4.9) 3,050.3
income
Dividends paid by the - - (447.0) - - (447.0) - (447.0)
Company
Dividends paid to non - - - - - - (4.2) (4.2)
-controlling
shareholders
Unclaimed dividends - - 0.5 - - 0.5 - 0.5
forfeited
Change in interests in - - (1.9) - 2.6 0.7 (6.3) (5.6)
subsidiaries
At 31st December 2016 235.3 386.9 31,093.6 18.6 (440.0) 31,294.4 20.0 31,314.4
The comprehensive
income for the year
ended 31st December
2016 included in
revenue reserves mainly
comprises profit
attributable to
shareholders of the
Company of US$3,346.3
million and a fair
value loss on other
investments of US$9.1
million. The
cumulative fair value
gain on other
investments amounted to
US$14.4 million.
Hongkong Land Holdings Limited Consolidated Cash Flow Statement
(unaudited)Six months ended 30th June Year ended 31st December
2017US$m 2016US$m 2016US$m
Operating activities
Operating profit 3,203.9 1,441.7 3,521.7
Depreciation 1.4 1.5 3.1
Reversal of writedowns on properties for sale - (1.5) (3.2)
Change in fair value of investment properties (2,693.6) (986.2) (2,549.9)
Asset impairment reversals - - (1.2)
Decrease in properties for sale 323.7 17.7 392.4
Increase in debtors (40.6) (20.0) (131.7)
(Decrease)/increase in creditors (150.4) 70.5 (7.5)
Interest received 18.2 21.2 36.4
Interest and other financing charges paid (58.0) (57.7) (111.4)
Tax paid (61.2) (49.7) (140.6)
Dividends from associates and joint ventures 29.3 29.9 88.1
Cash flows from operating activities 572.7 467.4 1,096.2
Investing activities
Major renovations expenditure (47.3) (47.0) (91.3)
Developments capital expenditure (52.5) (62.2) (148.2)
Investments in and loans to associates and
joint ventures (262.1) (4.7) (104.2)
Advances and repayments from associates
and joint ventures 230.6 33.3 102.8
Payment of deposit for a joint venture (43.5) - (4.2)
Cash flows from investing activities (174.8) (80.6) (245.1)
Financing activities
Drawdown of borrowings 74.1 102.8 266.7
Repayment of borrowings (219.9) (169.6) (240.6)
Dividends paid by the Company (302.0) (302.9) (443.8)
Dividends paid to non-controlling shareholders (0.5) (2.1) (4.2)
Change in interests in subsidiaries 15.0 - (20.2)
Cash flows from financing activities (433.3) (371.8) (442.1)
Net cash (outflow)/inflow (35.4) 15.0 409.0
Cash and cash equivalents at beginning of
period 1,898.4 1,565.9 1,565.9
Effect of exchange rate changes 28.5 (22.4) (76.5)
Cash and cash equivalents at end of period 1,891.5 1,558.5 1,898.4
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 auditors pursuant to the UK Auditing Practices Board guidance on the review of
interim financial information.
There are no new or amendments, which are effective in the current accounting period and relevant to the Group's
operations, that have a significant effect on the Group's accounting policies. There have been no changes to the
accounting policies described in the 2016 annual financial statements.
2. REVENUE
Six months ended 30th June
2017US$m 2016US$m
Rental income 445.5 427.7
Service income 67.3 64.9
Sales of properties 783.9 290.2
1,296.7 782.8
Service income includes service and management charges and hospitality service income.
3. NET OPERATING COSTS
Six months ended 30th June
2017US$m 2016US$m
Cost of sales (729.7) (280.6)
Other income 6.1 5.0
Administrative expenses (62.8) (51.7)
(786.4) (327.3)
4. OPERATING PROFIT
Six months ended 30th June
2017US$m 2016US$m
By business
Investment Properties 433.5 410.6
Development Properties 110.4 73.4
Corporate (33.6) (28.5)
Underlying business performance 510.3 455.5
Change in fair value of investment properties 2,693.6 986.2
3,203.9 1,441.7
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2017US$m 2016US$m
By business
Investment Properties
- operating profit 70.9 76.4
- net financing charges (17.8) (21.0)
- tax (8.7) (8.9)
- net profit 44.4 46.5
Development Properties
- operating profit 195.6 25.5
- net financing charges 3.7 1.6
- tax (105.3) (10.5)
- non-controlling interests (3.1) (3.5)
- net profit 90.9 13.1
Underlying business performance 135.3 59.6
Change in fair value of investment properties
(net of deferred tax) (76.4) (120.9)
58.9 (61.3)
6. TAX
Six months ended 30th June
2017US$m 2016US$m
Tax charged to profit and loss is analysed as follows:
Current tax (87.7) (90.3)
Deferred tax
- changes in fair value of investment properties 0.1 1.0
- other temporary differences (3.8) 1.3
(91.4) (88.0)
Tax relating to components of other comprehensive income is analysed as follows:
Cash flow hedges 5.4 (5.7)
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$90.3 million (2016: US$8.8 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$3,125.3 million (2016: US$1,263.4 million)
and on the weighted average number of 2,352.8 million (2016: 2,352.8 million) shares in issue during the period.
Earnings per share are additionally calculated based on underlying profit attributable to shareholders. A reconciliation
of earnings is set out below:
Six months ended 30th June
2017 2016
US$m Earningsper shareUS¢ US$m Earningsper shareUS¢
Underlying profit attributable to shareholders 517.4 21.99 392.8 16.70
Non-trading items (note 8) 2,607.9 870.6
Profit attributable to shareholders 3,125.3 132.83 1,263.4 53.70
8. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment
properties; gains and losses arising from the sale of businesses, investments and investment properties; impairment of
non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related
costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to
provide additional insight into underlying business performance.
An analysis of non-trading items is set out below:
Six months ended 30th June
2017US$m 2016US$m
Change in fair value of investment properties 2,693.6 986.2
Deferred tax on change in fair value of investment properties 0.1 1.0
Share of change in fair value of investment properties of
associates and joint ventures (net of deferred tax) (76.4) (120.9)
Non-controlling interests (9.4) 4.3
2,607.9 870.6
9. DIVIDENDS
Six months ended 30th June
2017US$m 2016US$m
Final dividend in respect of 2016 of US¢13.00(2015: US¢13.00) per share 305.8 305.8
An interim dividend in respect of 2017 of US¢6.00 (2016: US¢6.00) per share amounting to a total of US$141.2 million (2016:
US$141.2 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year
ending 31st December 2017.
10. INVESTMENT PROPERTIES
Six months ended 30th June Year ended31stDecember
2017US$m 2016US$m 2016US$m
Net book value at beginning of period 27,712.3 24,957.3 24,957.3
Exchange differences (127.1) (12.4) (71.0)
Additions 81.2 148.3 276.1
Increase in fair value 2,693.6 986.2 2,549.9
Net book value at end of period 30,360.0 26,079.4 27,712.3
11. BORROWINGS
At 30th June At 31st December
2017US$m 2016US$m 2016US$m
Current
Bank overdrafts 10.5 1.8 10.5
Current portion of long-term borrowings
- bank loans 317.3 17.0 175.1
- medium term notes due 2017 36.6 - 35.1
364.4 18.8 220.7
Long-term
Bank loans 557.9 919.8 838.0
Medium term notes
- due 2017 - 37.8 -
- due 2019 102.4 103.0 103.1
- due 2020 304.1 309.0 299.6
- due 2021 68.0 71.0 66.8
- due 2022 608.5 623.7 605.1
- due 2023 178.3 179.3 179.5
- due 2024 406.2 420.9 405.5
- due 2025 650.9 652.5 651.8
- due 2026 38.4 38.6 38.6
- due 2027 185.0 186.0 186.1
- due 2028 79.2 79.7 79.7
- due 2029 50.6 50.8 50.9
- due 2030 102.5 103.1 103.2
- due 2031 25.3 25.4 25.4
- due 2032 30.2 30.3 30.3
- due 2040 31.9 32.1 32.1
2,861.5 2,943.2 2,857.7
3,419.4 3,863.0 3,695.7
3,783.8 3,881.8 3,916.4
12. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2017 and 31st
December 2016 are as follows:
Loans and receivablesUS$m Derivatives used for hedgingUS$m Available-for-saleUS$m Other financial instruments at amortised costUS$m Other financial instrumentsat fair value through profit and lossUS$m Totalcarrying amountUS$m FairvalueUS$m
30th June 2017
Assets
Other investments - - 88.4 - - 88.4 88.4
Debtors 305.2 20.2 - - 11.9 337.3 337.3
Bank balances 1,902.0 - - - - 1,902.0 1,902.0
2,207.2 20.2 88.4 - 11.9 2,327.7 2,327.7
Liabilities
Borrowings - - - (3,783.8) - (3,783.8) (3,923.9)
Creditors excluding
non-financial
liabilities - (11.0) - (494.8) - (505.8) (505.8)
- (11.0) - (4,278.6) - (4,289.6) (4,429.7)
31st December 2016
Assets
Other investments - - 52.2 - - 52.2 52.2
Debtors 276.3 44.5 - - 11.8 332.6 332.6
Bank balances 1,908.9 - - - - 1,908.9 1,908.9
2,185.2 44.5 52.2 - 11.8 2,293.7 2,293.7
Liabilities
Borrowings - - - (3,916.4) - (3,916.4) (3,988.3)
Creditors excluding
non-financial
liabilities - (7.6) - (533.3) - (540.9) (540.9)
- (7.6) - (4,449.7) - (4,457.3) (4,529.2)
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 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 2017 and the year ended 31st December
2016.
The table below analyses financial instruments carried at fair value at 30th June 2017 and 31st December 2016, by the
levels in the fair value measurement hierarchy:
Quoted prices in active marketsUS$m Observable current market transactionsUS$m TotalUS$m
30th June 2017
Assets
Available-for-sale financial assets
- listed securities 88.4 - 88.4
Derivative designated at fair value
- through other comprehensive income - 3.2 3.2
- through profit and loss - 17.0 17.0
88.4 20.2 108.6
Liabilities
Derivative designated at fair value
- through other comprehensive income - (7.2) (7.2)
- through profit and loss - (3.8) (3.8)
- (11.0) (11.0)
31st December 2016
Assets
Available-for-sale financial assets
- listed securities 52.2 - 52.2
Derivative designated at fair value
- through other comprehensive income - 28.0 28.0
- through profit and loss - 16.5 16.5
52.2 44.5 96.7
Liabilities
Derivative designated at fair value
- through profit and loss - (7.6) (7.6)
There were no transfers among the two categories during the six months ended 30th June 2017 and the year ended 31st
December 2016.
(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 2017 and 31st December 2016 amounted to US$819.2 million and US$623.0 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
2017 was US$2.6 million (2016: US$2.0million), 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 2017 amounted to US$10.3
million (2016: US$10.0 million).
The Group provided consultancy services to Jardine Matheson group members in 2017 amounting to US$0.2 million (2016: US$0.2
million).
Jardine Matheson group members provided property maintenance and other services to the Group in 2017 in aggregate amounting
to US$22.2 million (2016: US$20.0 million).
Hotel management services
Jardine Matheson group members provided hotel management services to the Group in 2017 amounting to US$1.2 million (2016:
US$1.1 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.
The amounts are not material.
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 and Financial Risk
• Commercial 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 2016, 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
Simon Dixon
Directors
The interim dividend of US¢6.00 per share will be payable on 19th October 2017 to shareholders on the register of members at the close of business on 25th August 2017.
The shares will be quoted ex-dividend on the Singapore Exchange and the London Stock Exchange on 23rd and 24th August 2017, respectively. The share registers will be
closed from 28th August to 1st September 2017, inclusive. Shareholders will receive their cash 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 2017 interim dividend by
notifying the United Kingdom transfer agent in writing by 29th September 2017. The sterling equivalent of dividends declared in United States dollars will be calculated
by reference to a rate prevailing on 4th October 2017. Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in sterling
only as calculated above. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore 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 25th August 2017, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar, no later
than 5.00 p.m. (local time) on 24th August 2017.
Hongkong Land Group
Hongkong Land is a listed leading 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 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.
Its Hong Kong Central 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, and a 50% interest in a leading office complex in
Central Jakarta. The Group also has a number of high quality residential and mixed-use projects under development in
cities across Greater China and Southeast Asia, including a luxury retail centre at Wangfujing in Beijing. 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, with
secondary listings in Bermuda and Singapore. The Group's assets and investments are managed from Hong Kong by Hongkong
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