H.k.land Regulatory News (HKLD)

6 Mar 2008 09:05

Hongkong Land Hldgs Ld06 March 2008 To: Business Editor 6th March 2008 For immediate release The following announcement was issued today to a Regulatory Information Serviceapproved by the Financial Services Authority in the United Kingdom. HONGKONG LAND HOLDINGS LIMITED2007 PRELIMINARY ANNOUNCEMENT OF RESULTS Highlights • Continued strength in Hong Kong capital values, rents and occupancy • Good profits from residential developments in Singapore and mainland China • Underlying earnings per share up 37% • Adjusted net assets per share* up 29% • Full-year dividend per share increased by 30% "The positive rental reversion cycle in Hong Kong together with the recognitionof profits on the completion of residential properties will continue to enhanceearnings in 2008 and beyond, while the Group's strong balance sheet will standit in good stead if the economic environment becomes more difficult." Simon Keswick, Chairman6th March 2008 Results-------------------------------------------------------------------------------- Year ended 31st December 2007 2006 Change US$m US$m %--------------------------------------------------------------------------------Underlying profit attributable to shareholders 345 245 +41Profit attributable to shareholders 2,840 1,901 +49Shareholders' funds 11,833 9,197 +29Adjusted shareholders' funds* 14,041 10,922 +29Net debt 2,431 2,312 +5-------------------------------------------------------------------------------- USc USc %--------------------------------------------------------------------------------Underlying earnings per share 15.02 10.98 +37Earnings per share 123.72 85.31 +45Dividends per share 13.00 10.00 +30-------------------------------------------------------------------------------- US$ US$ %--------------------------------------------------------------------------------Net asset value per share 5.16 4.01 +29Adjusted net asset value per share* 6.12 4.76 +29--------------------------------------------------------------------------------* In preparing the Group's financial statements under InternationalFinancial Reporting Standards ('IFRS'), the fair value model forinvestment properties has been adopted. In accordance with this model,the Group's leasehold investment properties have been included at theiropen market value as determined by independent valuers. In theterritories where the Group has significant leasehold investmentproperties, no capital gains tax would be payable on the sale of theseproperties. In relation to leasehold investment properties, however,IFRS require deferred tax on any revaluation amount to be calculatedusing income tax rates. This is in contrast to the treatment for therevaluation element of freehold properties where IFRS require capitalgains tax rates to be used. As Management considers that the Group's long leasehold properties havevery similar characteristics to freehold property, the adjustedshareholders' funds and adjusted net asset value per share informationis presented on the basis that would be applicable if the leaseholdproperties were freehold. The adjustments made add back the deferred taxprovided in the financial statements that would not be payable if theproperties were sold. See note 11.-------------------------------------------------------------------------------- The final dividend of USc9.00 per share will be payable on 14th May 2008,subject to approval at the Annual General Meeting to be held on 7th May 2008, toshareholders on the register of members at the close of business on 20th March2008. The ex-dividend date will be on 18th March 2008, and the share registerswill be closed from 24th to 28th March 2008, inclusive. HONGKONG LAND HOLDINGS LIMITED PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31ST DECEMBER 2007 OVERVIEW Broad-based demand and higher occupancy in Hong Kong's Central districtcontinued to drive rents and capital values higher in both the office and retailsectors in 2007. A number of the Group's residential development projects alsoreached completion during the year leading to a higher contribution from thissector. Overall, the Group made good progress towards its strategic aims ofextending its reach regionally and developing a significant capability in theresidential sector. PERFORMANCEPositive rental reversions throughout 2007 led to a growth in net rental incomeof 26% compared with 2006. The completion of residential projects in mainlandChina and Singapore enabled a profit of US$73 million to be recognised, anincrease of 90% over that of the prior year. Financing charges were lower thanin 2006 largely due to higher interest income received. Overall, underlyingprofit rose 41% to US$345 million. Capital values in the Group's investment property portfolio rose sharply,exceeding the gains recorded in 2006. The independent valuation of the Group'scommercial investment properties at the end of 2007, including the Group's shareof investment properties in joint ventures and associates, was US$15,075million, representing an increase of 25%. Adjusted net asset value per sharerose 29% to US$6.12. Profit attributable to shareholders for the year, includingthe revaluation, was US$2,840 million compared with US$1,901 million in 2006. Following an increase in the interim dividend, the Directors are alsorecommending a higher final dividend of USc9.00 per share for 2007, providing atotal dividend for the year of USc13.00 per share, up 30%. GROUP REVIEWRents continued to rise in Hong Kong's Central district for the fourthconsecutive year. There was demand for high quality commercial office spaceacross all business sectors, and rents and occupancy reached their strongestlevels in a decade. While new supply is now becoming available elsewhere in HongKong, there is little to be found in Central and so far the effect on theGroup's portfolio has been minimal. The luxury retail market also performed wellin Hong Kong during the year, underpinning the contribution from the Group'spremium luxury retail space in Central. The Singapore office market also witnessed further rent increases, supported byexpansion in the financial services sector. The Group's results include thefirst full-year contribution from the One Raffles Quay properties. This strongdemand has enabled the Group to enter into a number of pre-commitments for spacein the Marina Bay Financial Centre joint venture development, a partnership withCheung Kong and Keppel Land, which is due to complete in two phases in 2010 and2011. In the residential sector, Phase III of Central Park in Beijing and MCL Land's'The Calrose' were completed before the year end, which allowed profits on theseprojects to be recognised in the 2007 results. There were also a number ofsuccessful sales launches during the year, including Phase I of Bamboo Grove inChongqing and four MCL Land projects in Singapore, with almost all units soldfollowing release. After a slow start, sales of Phase IV of Central Park inBeijing have improved significantly. OUTLOOKIn conclusion, the Chairman, Simon Keswick said, "The positive rental reversioncycle in Hong Kong together with the recognition of profits on the completion ofresidential properties will continue to enhance earnings in 2008 and beyond,while the Group's strong balance sheet will stand it in good stead if theeconomic environment becomes more difficult." CHIEF EXECUTIVE'S REVIEW With the refurbishment and extension of the Landmark complex now largelycomplete and the 'Cityscape' street environment upgrade project in its finalstages, our Hong Kong portfolio, which remains our prime focus of attention, isenjoying strong rental income growth and close to 100% occupancy. Despite newsupply becoming available in some decentralised areas in Hong Kong and Kowloon,the continuing strong demand for space in the Group's buildings confirmsCentral's undisputed position as Hong Kong's centre for international businessand its leading destination for luxury retail. The broadening of our commercial property activities regionally has continued toprogress well. In 2007 we saw the first full-year contribution from One RafflesQuay ('ORQ') in Singapore, which is fully let, while the construction of the190,000 sq.m. of gross floor area of Phase I of the Marina Bay Financial Centre('MBFC') remains on track for completion in 2010. In February the MBFCconsortium partners exercised their option to develop the remainder of the MBFCsite. This second phase will comprise some 140,000 sq.m. of gross floor area ofpremium office space and is scheduled for completion in 2011. These developmentswill give Hongkong Land a critical mass of prime commercial office space in thisimportant Asian market. Our aim is also to grow our residential business so that it can make asignificant, capital-efficient and sustainable contribution to profit. Followingsuccessful launches of projects in Macau, Singapore and Beijing, and theacquisition of MCL Land in 2006, further progress was made in 2007 with wellreceived launches in Chongqing and Singapore. The Group also acquired furtherdevelopment sites in 2007, thereby ensuring a steady stream of projectcompletions in the years ahead. MCL Land acquired three new sites and enteredinto agreements to acquire two others. Together with USI Holdings Limited, theGroup has entered into a 50/50 joint venture with a local developer to acquireresidential development sites in Shenyang in mainland China totalling some200,000 sq.m. COMMERCIAL PROPERTY Hong Kong Central Portfolio Office rents in Central in Hong Kong increased for a fourth consecutive yearleading to a 32% rise in average rents during 2007. Vacancy fell from 4.5% atthe end of 2006 to 2% at the year end. The reversion pattern in our portfoliohas been strongly positive since mid-2005, and this will continue in 2008 withmarket rents now exceeding HK$100 psf per month in most buildings. Even though significant new supply is now approaching completion in a number ofdecentralised locations, demand for high quality centrally-located space remainsstrong. While some tenants have elected to relocate to areas outside Central,many others are renewing leases and seeking additional space, more thancompensating for those who are leaving. The first full-year contribution was made by York House in 2007, followingreceipt of its full Occupation Permit at the end of 2006. All but one floor ofYork House had been leased by the end of the year, thereby ensuring a furtherincrease in its contribution to net rental income in 2008. The luxury retail sector generated increased sales again in 2007, enjoyinganother buoyant year, with an exceptional Christmas season. Commercial Properties other than in Hong KongSingapore continued to increase in significance to the Group in 2007 with thefirst full-year contribution from ORQ, which was fully let on completion in2006. One Raffles Link, our wholly-owned development in the city, also remainsfully let at good rents. The decision by Hongkong Land and its consortiumpartners to exercise the option to acquire the remainder of the land at the MBFCwas made against the backdrop of continuing strong demand for high qualityoffice space in Singapore. The office portion of Phase II of MBFC, which willcomprise some 140,000 sq. m. of gross floor area, is scheduled to complete in2011. Construction of One Central, our joint venture development with Shun Tak in theheart of the Macau peninsula, is on track for completion in 2009. One Centralwill comprise some 37,000 sq. m. of luxury retail space together with a MandarinOriental hotel, serviced apartments and 137,000 sq. m. of residentialapartments. Our commercial investment properties in other markets in the region are locatedin Hanoi, Jakarta and Bangkok. Our two buildings in Hanoi are fully let in amarket where rents continue to strengthen and Jakarta Land's portfolio isachieving occupancy levels of over 93% at premium rents. In Bangkok, however,our 49%-owned luxury retail centre and office development, Gaysorn, continues toexperience difficult trading conditions in a weak market. RESIDENTIAL PROPERTY The profit contribution from our residential businesses in 2007 rose by 90% overthat for 2006. This was due mainly to the contribution from Phase III of CentralPark, our joint venture development in Beijing, and MCL Land's project, 'TheCalrose', in Singapore. From a sales perspective, the Group had another goodyear with launches in Chongqing and four MCL Land projects in Singapore beinglargely sold within a short period of the projects being launched. The 796 unit residential element of One Central in Macau is now over 97%pre-sold. In Singapore, construction of Marina Bay Residences, the residentialcomponent of the first phase of the MBFC, is on schedule for handover in 2010.Phase II of the MBFC will also incorporate a tower of residential apartments,Marina Bay Suites. Construction of the final phase of Central Park, our joint venture developmentin Beijing, is progressing well, with some 82% of the 492 units having beenpre-sold by the end of 2007. Completion is on schedule for the middle of 2008.Elsewhere in mainland China, the sales launch of the 650 units in Phase I ofBamboo Grove, our joint venture with the Longhu Group in Chongqing, was wellreceived with most units being sold soon after launch. This is the first of anumber of phases of this large site with a total land area of some 780,000 sq.m. In December the Group, together with USI Holdings, acquired a 50% interest in a200,000 sq. m. landbank in Shenyang in North-Eastern China. Hongkong Land has aneffective interest of 30% in the project. MCL LAND MCL Land completed three projects in 2007, 'Mera East', 'The Metz' and 'TheCalrose', and recorded a 97% increase in underlying earnings. MCL Land'spre-sale of four new developments in 2007 exceeded expectations, with almost allthe units taken up. This has given MCL Land a good pipeline of profits that willbe recognised upon completion of the projects in 2009 and 2010. MCL Land alsoacquired further sites in 2007 that should contribute to the Group's earningsbeyond 2009. FINANCE The Group's financial position remains healthy. At the end of 2007 adjustedgearing was 17% with net debt at US$2.4 billion, up slightly from US$2.3 billionat the end of 2006. While the Group did not have any major re-financingrequirements during the year, it took the opportunity of favourable borrowingconditions to establish a number of new committed facilities. OUTLOOK Hong Kong's Central district is commanding premium rents at a time where onlylimited supply will become available in the district in the medium term.Accordingly the outlook for investment income remains positive, althoughpossible effects of the economic slowdown in the United States and Europe areyet to be seen. The new projects that will complete in Singapore and Macau inthe coming years will strengthen further our commercial revenues. Our success inresidential sales in Macau, Singapore and mainland China will add an additionalstream of profits in the years ahead. Y K PangChief Executive6th March 2008 ------------------------------------------------------------------------------------------------------------------------Hongkong Land Holdings LimitedConsolidated Profit and Loss Accountfor the year ended 31st December 2007------------------------------------------------------------------------------------------------------------------------ 2007 2006 Underlying Underlying business Non-trading business Non-trading performance items Total performance items Total US$m US$m US$m US$m US$m US$m------------------------------------------------------------------------------------------------------------------------ Revenue (note 2) 933.2 - 933.2 555.9 - 555.9Cost of sales (note 3) (442.2) - (442.2) (197.5) - (197.5) --------- --------- --------- --------- --------- ---------Gross profit 491.0 - 491.0 358.4 - 358.4Other income 0.6 - 0.6 23.0 - 23.0Administrative and other expenses (52.2) - (52.2) (33.7) - (33.7) --------- --------- --------- --------- --------- --------- 439.4 - 439.4 347.7 - 347.7Increase in fair value of investment properties (note 7) - 2,588.9 2,588.9 - 1,952.6 1,952.6Asset impairment provisions, reversals and disposals (note 7) - 9.4 9.4 - (5.8) (5.8) --------- --------- --------- --------- --------- ---------Operating profit 439.4 2,598.3 3,037.7 347.7 1,946.8 2,294.5Net financing charges (50.0) - (50.0) (72.3) - (72.3)Share of results of joint ventures (note 4) 24.0 362.6 386.6 (0.2) 50.9 50.7 --------- --------- --------- --------- --------- ---------Profit before tax 413.4 2,960.9 3,374.3 275.2 1,997.7 2,272.9Tax (note 5) (56.2) (463.2) (519.4) (25.3) (340.2) (365.5) --------- --------- --------- --------- --------- ---------Profit for the year 357.2 2,497.7 2,854.9 249.9 1,657.5 1,907.4 --------- --------- --------- --------- --------- --------- Attributable to:Shareholders of the Company 344.7 2,494.9 2,839.6 244.7 1,656.2 1,900.9Minority interests 12.5 2.8 15.3 5.2 1.3 6.5 --------- --------- --------- --------- --------- --------- 357.2 2,497.7 2,854.9 249.9 1,657.5 1,907.4 --------- --------- --------- --------- --------- --------------------------------------------------------------------------------------------------------------------------------- USc USc USc USc------------------------------------------------------------------------------------------------------------------------ Earnings per share (note 6)- basic 15.02 123.72 10.98 85.31- diluted 15.02 119.18 10.98 82.35------------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------Hongkong Land Holdings LimitedConsolidated Balance Sheetat 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m-------------------------------------------------------------------------------- Net operating assetsTangible assets (note 8) Investment properties 14,260.6 11,650.7 Others 12.3 13.1 --------- --------- 14,272.9 11,663.8Joint ventures 1,653.9 894.5Other investments 17.5 16.1Deferred tax assets 2.6 0.5Pension assets 17.3 13.9Non-current debtors 36.7 22.9 --------- ---------Non-current assets 16,000.9 12,611.7 --------- ---------Properties for sale 895.0 800.3Current debtors 414.2 208.0Bank balances 1,104.0 1,166.5 --------- --------- 2,413.2 2,174.8Non-current assets classified as held for sale (note 9) - 188.8 --------- --------- Current assets 2,413.2 2,363.6 --------- --------- Current creditors (659.2) (403.4)Current borrowings (note 10) (140.9) (116.8)Current tax liabilities (43.2) (25.8) --------- --------- (843.3) (546.0)Liabilities directly associated with non-current assets classified as held for sale (note 9) - (3.0) --------- --------- Current liabilities (843.3) (549.0) --------- --------- Net current assets 1,569.9 1,814.6Long-term borrowings (note 10) (3,393.9) (3,361.9)Deferred tax liabilities (2,207.2) (1,739.6)Non-current creditors (12.6) (21.3) --------- --------- 11,957.1 9,303.5 --------- --------- Total equityShare capital 229.5 229.5Revenue and other reserves 11,603.5 8,967.8 --------- --------- Shareholders' funds 11,833.0 9,197.3Minority interests 124.1 106.2 --------- --------- 11,957.1 9,303.5 --------- --------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Hongkong Land Holdings LimitedConsolidated Statement of Recognised Income and Expensefor the year ended 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m-------------------------------------------------------------------------------- Net exchange translation differences 33.1 22.3Actuarial gains on defined benefit pension plans 2.8 3.5Revaluation of other investments - fair value gains 1.4 2.7 - reversal of loss on business combination - 0.6Gains/(losses) on cash flow hedges 7.1 (24.7)Tax on items taken directly to equity (1.3) 2.4 --------- --------- Net income recognised directly in equity 43.1 6.8Transfer to consolidated profit and loss account on disposal of other investments - (3.0)Transfer to consolidated profit and loss account in respect of cash flow hedges 5.5 9.1Profit for the year 2,854.9 1,907.4 --------- --------- Total recognised income and expense for the year 2,903.5 1,920.3 --------- --------- Attributable to:Shareholders of the Company 2,888.2 1,913.8Minority interests 15.3 6.5 --------- --------- 2,903.5 1,920.3 --------- --------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Hongkong Land Holdings LimitedConsolidated Cash Flow Statementfor the year ended 31st December2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m-------------------------------------------------------------------------------- Operating activities --------- --------- Operating profit 3,037.7 2,294.5Depreciation 0.9 1.2Negative goodwill on acquisition of a subsidiary - (14.1)Increase in fair value of investment properties (2,588.9) (1,952.6)Asset impairment provisions, reversals and disposals (9.4) 5.8Increase in properties for sale (59.2) (262.5)Increase in debtors, prepayments and others (197.9) (13.0)Increase in creditors and accruals 279.9 77.1Interest received 88.8 66.2Interest and other financing charges paid (126.7) (121.8)Tax paid (32.0) (12.5)Dividends received 11.1 15.0 --------- --------- Cash flows from operating activities 404.3 83.3 Investing activities --------- --------- Major renovations expenditure (22.2) (33.5)Developments capital expenditure (23.5) (40.1)Purchase of subsidiaries (note 13) - (237.8)Investments in and loans to joint ventures (note 14) (316.8) (167.3)Disposal of joint ventures and other investments 7.6 1.5 Disposal of investment and other properties 188.9 18.9 --------- ---------Cash flows from investing activities (166.0) (458.3) Financing activities --------- ---------Drawdown of bank loans 407.5 571.5Repayment of bank loans/notes (454.0) (193.1)Disposal of own shares held - 268.5Dividends paid by the Company (251.1) (199.1)Dividends paid to minority shareholders (3.6) (2.7) --------- ---------Cash flows from financing activities (301.2) 445.1Effect of exchange rate changes 2.1 3.7 --------- ---------Net (decrease)/increase in cash and cash equivalents (60.8) 73.8Cash and cash equivalents at 1st January 1,163.7 1,089.9 --------- ---------Cash and cash equivalents at 31st December 1,102.9 1,163.7 --------- ----------------------------------------------------------------------------------------- --------------------------------------------------------------------------------Hongkong Land Holdings LimitedNotes-------------------------------------------------------------------------------- 1. PRINCIPAL ACCOUNTING POLICIES AND BASIS OF PREPARATION The financial information contained in this announcement has been based on theaudited results for the year ended 31st December 2007 which have been preparedin conformity with International Financial Reporting Standards, includingInternational Accounting Standards and Interpretations adopted by theInternational Accounting Standards Board. In 2007, the Group adopted the following standard, amendment and interpretationsto existing standards which are relevant to its operations: IFRS 7, Financial Instruments: DisclosuresAmendment to IAS 1, Capital DisclosuresIFRIC 8, Scope of IFRS 2IFRIC 9, Reassessment of Embedded DerivativesIFRIC 10, Interim Financial Reporting and Impairment There have been no changes to the accounting policies as a result of adoption ofthe above standard, amendment and interpretations. 2. REVENUE 2007 2006 US$m US$m ------------------ Rental income 440.5 348.7Service income 97.7 95.4Sales of trading properties 395.0 111.8 ------- ------- 933.2 555.9 ------- ------- Service income includes service and management charges and hospitality serviceincome. Total contingent rents included in rental income amounted to US$7.1 million(2006: US$6.4 million). 3. COST OF SALES 2007 2006 US$m US$m ------------------ Investment properties' direct operating expenses 115.9 107.9Cost of properties sold 326.3 89.6 ------- ------- 442.2 197.5 ------- ------- 4. SHARE OF RESULTS OF JOINT VENTURES 2007 2006 US$m US$m ------------------By businessCommercial property 6.5 (0.9)Residential property 17.5 0.7 ------- ------- 24.0 (0.2)Increase in fair value of investment properties ------- -------- Commercial property 352.8 46.7 - Residential property 9.0 3.1 ------- ------- 361.8 49.8Asset impairment provision, reversals and disposals 0.8 1.1 ------- ------- 386.6 50.7 ------- ------- Results are shown after tax and minority interests. The share of revenue ofjoint ventures was US$128.7 million (2006: US$42.2 million). 5. TAX 2007 2006 US$m US$m ------------------ Current tax (49.8) (21.8)Deferred tax ------- -------- increase in fair value of investment properties (463.2) (340.2)- other temporary differences (6.4) (3.5) ------- ------- (469.6) (343.7) ------- ------- (519.4) (365.5) ------- ------- Tax on profits is provided at the rates of taxation prevailing in theterritories in which the Group operates. The Group has no tax payable in theUnited Kingdom. 6. EARNINGS PER SHARE Basic earnings per share are calculated on profit attributable to shareholdersof US$2,839.6 million (2006: US$1,900.9 million) and on the weighted averagenumber of 2,295.2 million (2006: 2,228.1 million) shares in issue during theyear. Diluted earnings per share are calculated on profit attributable to shareholdersof US$2,859.3 million (2006: US$1,920.4 million), which is after adjusting forthe effects of the conversion of convertible bonds, and on the weighted averagenumber of 2,399.1 million (2006: 2,332.0 million) shares in issue during theyear. The number of shares for basic and diluted earnings per share isreconciled as follows: Ordinary shares in millions 2007 2006 ---------------------------Weighted average number of shares in issue 2,295.2 2,228.1Adjustment for shares to be issued on conversion of convertible bonds 103.9 103.9 --------- ---------Weighted average number of shares for diluted earnings per share calculation 2,399.1 2,332.0 --------- --------- Earnings per share are additionally calculated based on underlying profitattributable to shareholders. The difference between underlying profitattributable to shareholders and profit attributable to shareholders isreconciled as follows: 2007 2006 US$m US$m -----------------------Underlying profit attributable to shareholders 344.7 244.7Non-trading items (note 7) 2,494.9 1,656.2 --------- ---------Profit attributable to shareholders 2,839.6 1,900.9Interest expense on convertible bonds (net of tax) 19.7 19.5 --------- ---------Profit for calculation of diluted earnings per share 2,859.3 1,920.4 --------- --------- 7. NON-TRADING ITEMS 2007 2006 US$m US$m ----------------------Revaluation surpluses of investment properties 2,588.9 1,952.6Deferred tax charges on revaluation surpluses of investment properties (463.2) (340.2)Share of revaluation surpluses of investment properties of joint ventures (net of deferred tax) 361.8 49.8Asset impairment provisions, reversals and disposals 9.4 (5.8)Share of asset disposals of joint ventures 0.8 1.1Minority interests (2.8) (1.3) --------- --------- 2,494.9 1,656.2 --------- --------- 8. TANGIBLE ASSETS 2007 2006 US$m US$m -----------------------Net book value at 1st January 11,663.8 9,791.0Exchange rate adjustments (4.1) (0.5)New subsidiary - 25.9Additions 38.3 85.2Depreciation (0.9) (1.2)Disposal (13.1) (0.3)Net revaluation surplus of investment properties 2,588.9 1,952.6Classified as non-current assets held for sale - (187.8)Transfer to properties for sale - (1.1) --------- ---------Net book value at 31st December 14,272.9 11,663.8 --------- --------- 9. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE The non-current assets classified as held for sale at 31st December 2006 wererelated to the Group's investment property situated at 1063 King's Road, HongKong. The sale was completed on 9th February 2007. 10.BORROWINGS 2007 2006 US$m US$m -----------------------Current --------- ---------Bank overdrafts 1.1 2.8Short-term borrowings 94.7 103.2Current portion of long-term borrowings 45.1 10.8 --------- --------- 140.9 116.8Long-term borrowings --------- ---------Bank loans 1,442.2 1,467.77% United States Dollar bonds due 2011 618.3 617.25.5% United States Dollar bonds due 2014 501.4 487.53.01% Singapore Dollar notes due 2010 224.2 206.73.65% Singapore Dollar notes due 2015 258.5 242.22.75% United States Dollar convertible bonds due 2012 349.3 340.6 --------- --------- 3,393.9 3,361.9 --------- --------- 3,534.8 3,478.7 --------- --------- Secured 182.8 242.1Unsecured 3,352.0 3,236.6 --------- --------- 3,534.8 3,478.7 --------- --------- 11. NET ASSET VALUE PER SHARE Net asset value per share is calculated on shareholders' funds of US$11,833.0million (2006: US$9,197.3 million)and on 2,295.2 million (2006: 2,295.2 million)shares in issue at the year end. Net asset value per share is additionally calculated based on adjustedshareholders' funds. The difference between adjusted shareholders' funds andshareholders' funds is reconciled as follows: 2007 2006 US$m US$m -----------------------Shareholders' funds 11,833.0 9,197.3Deferred tax on revaluation surpluses of investment properties 2,165.4 1,708.1Share of deferred tax on revaluation surpluses of investment properties of joint ventures 42.6 16.7 --------- ---------Adjusted shareholders' funds 14,041.0 10,922.1 --------- --------- 12. DIVIDENDS 2007 2006 US$m US$m -----------------------Final dividend in respect of 2006 of USc7.00 (2005: USc6.00) per share 160.7 133.5Interim dividend in respect of 2007 of USc4.00 (2006: USc3.00) per share 91.8 66.8 --------- --------- 252.5 200.3 --------- --------- A final dividend in respect of 2007 of USc9.00 (2006: USc7.00) per shareamounting to a total of US$206.6 million (2006: US$160.7 million) is proposed bythe Board. The dividend proposed will not be accounted for until it has beenapproved at the Annual General Meeting. The amount will be accounted for as anappropriation of revenue reserves in the year ending 31st December 2008. 13. PURCHASE OF SUBSIDIARIES Purchase of subsidiaries in 2006 was related to the Group's acquisition of 77.4%interest in MCL Land. 14. INVESTMENTS IN AND LOANS TO JOINT VENTURES Investments in joint ventures during the year included US$22.1 million andUS$22.0 million acquisition for 40% interest in Ampang Investments and 50%interest in K.K. Halifax respectively. 15. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES 2007 2006 US$m US$m --------------------Capital commitments 463.0 64.6 ------- -------Contribution to joint ventures 953.5 1,060.3 ------- ------- Various Group companies are involved in litigation arising in the ordinarycourse of their respective businesses. Having reviewed outstanding claims andtaking into account legal advice received, the Directors are of the opinion thatadequate provisions have been made in the financial statements. --------------------------------------------------------------------------------The final dividend of USc9.00 per share will be payable on 14th May 2008,subject to approval at the Annual General Meeting to be held on 7th May 2008, toshareholders on the register of members at the close of business on 20th March2008. The ex-dividend date will be on 18th March 2008, and the share registerswill be closed from 24th to 28th March 2008, inclusive. Shareholders willreceive their dividends in United States Dollars, unless they are registered onthe Jersey branch register where they will have the option to elect forSterling. These shareholders may make new currency elections for the 2007 finaldividend by notifying the United Kingdom transfer agent in writing by 25th April2008. The Sterling equivalent of dividends declared in United States Dollarswill be calculated by reference to a rate prevailing on 30th April 2008.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.-------------------------------------------------------------------------------- For further information, please contact: Hongkong Land LimitedY K Pang (852) 2842 8428G M Brown (852) 2842 8138 Matheson & Co., Limited Philip Hawkins (020) 7816 8136 GolinHarrisSue So (852) 2501 7984 Weber Shandwick FinancialRichard Hews/ Hannah Marwood (020) 7067 0700 Full text of the Preliminary Announcement of Results and the Preliminary Financial Statements for the year ended 31st December 2007 can be accessed through the Internet at 'www.hkland.com'. This information is provided by RNS The company news service from the London Stock Exchange