Last checked at 26 Jul 2012 10:06
To: Business Editor | 26th July 2012 |
For immediate release |
The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2012
Highlights
·; Rental reversions positive overall
·; Reduced first-half residential contribution
·; New Singapore residential site secured
·; Group to take 30% interest in Beijing office development
"While conditions remain uncertain, the Group's commercial portfolio in Hong Kong is well positioned due to the lack of new commercial space entering the market. The contribution from residential developments in the second half is expected to benefit from the completion of two projects in Singapore and additional profits in Hong Kong."
Simon Keswick, Chairman
26th July 2012
Results
| (unaudited) Six months ended 30th June |
Change % | ||
2012 US$m | 2011 US$m | |||
Underlying profit attributable to shareholders# | 318 | 365 | −13 | |
Profit attributable to shareholders | 626 | 3,805 | −84 | |
Shareholders' funds | 25,246 | 24,739* | +2 | |
Net debt | 3,148 | 2,359* | +33 | |
US¢ | US¢ | % | ||
Underlying earnings per share | 13.59 | 15.83 | −14 | |
Earnings per share | 26.73 | 164.82 | −84 | |
Interim dividend per share | 6.00 | 6.00 | - | |
US$ | US$ | % | ||
Net asset value per share | 10.77 | 10.58* | +2 | |
# 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 2011 | ||||
The interim dividend of US¢6.00 per share will be payable on 10th October 2012 to shareholders on the register of members at the close of business on 17th August 2012. The ex-dividend date will be on 15th August 2012, and the share registers will be closed from 20th to 24th August 2012, inclusive. | ||||
HONGKONG LAND HOLDINGS LIMITED
HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2012
OVERVIEW
Operating profit from the Group's commercial property portfolio increased in the first six months of 2012, but this was more than offset by the decrease in residential profits. During the period, there were no residential projects completed in Singapore and fewer sales completed at the Group's Serenade project in Hong Kong. In mainland China, while overall market sentiment in the residential sector remained challenging, sales continued at the Group's various projects in Chongqing and Shenyang.
PERFORMANCE
During the first half of 2012, the Group's underlying profit was US$318 million compared with US$365 million in 2011.
The Group recorded a US$308 million gain following an independent valuation of the Group's investment properties, including its share of properties in joint ventures. This compares to a gain of US$3,440 million in the first half of 2011.
As a result, the profit attributable to shareholders for the first half of 2012 was US$626 million, compared with US$3,805 million in the comparable period last year. The net asset value per share at 30th June 2012 was US$10.77, up 2% from the end of 2011.
The Directors have declared an interim dividend of US¢6.00 per share, unchanged from 2011.
GROUP REVIEW
Commercial Property
Leasing activity across the Hong Kong market was subdued due to general economic uncertainty. Nonetheless, vacancy in the Group's Central office portfolio at the end of June was low at 3.1%, while its retail portfolio was fully let in both Macau and Hong Kong. The Group's average office rent was HK$89.3 per sq. ft in the first half of the year, compared with HK$85.6 per sq. ft in the first half of 2011. The average retail rent rose to HK$165.3 per sq. ft.
In Singapore, the office portfolio was almost fully leased with the exception of the third office tower of Marina Bay Financial Centre. This building, which was recently completed, is now approximately 70% committed and tenants have commenced their fit-out. In Jakarta, construction of the 88% pre-let, fourth office tower is nearing completion at the Group's joint venture development.
Planning is progressing on the Group's Wangfujing development, its first significant commercial project in Beijing, which is being designed as a premier retail centre incorporating a small luxury hotel. Also in Beijing, the Group is to take a 30% interest in a consortium that will develop a prime Grade A office building of some 120,000 sq. m in the CBD Core Area of the Chaoyang District.
Residential Property
In Hong Kong, 18 additional apartments of Serenade were sold, of which eight were handed over to buyers in the first half of the year. At the One Central project in Macau, a further 13 units were sold, most of which will be handed over to buyers in the second half of the year.
In Singapore, there were no residential completions in the period, in contrast to the first half of 2011, when the Group's wholly-owned subsidiary, MCL Land, completed its Peak@Balmeg project. In the second half of 2012, Parvis, a 248-unit development held through a 50%-owned joint venture and D'Mira, a 100%-owned 65-unit development are expected to be completed. In March, MCL Land launched its 679-unit Ripple Bay development, which is now 81% pre-sold. In addition, the company has six previously launched projects under construction of which only one, Uber 388, is not yet fully pre-sold. An additional residential development site in Singapore is being acquired for approximately US$300 million with completion in August.
In Chongqing, at the 50%-held Bamboo Grove, a further 474 units of Phase 4B have been handed over to buyers since the beginning of the year and some 250 units are scheduled for handover in the second half. At Phase 5A, due for completion later this year, 69% of the 640 units have been pre-sold. Sales continue at other Group projects in Chongqing and Shenyang and at Maple Place in Beijing.
FINANCE
The Group remained in a strong financial position with net debt at US$3.1 billion compared with US$2.4 billion at the end of 2011. The increase was due to land instalment payments for previously acquired sites in China, including the Wangfujing site in Beijing. Gearing at 30th June 2012 was 12%. The Group issued US$500 million of 4.5% 10-year Notes in June.
OUTLOOK
While conditions remain uncertain, the Group's commercial portfolio in Hong Kong is well positioned due to the lack of new commercial space entering the market. The contribution from residential developments in the second half is expected to benefit from the completion of two projects in Singapore and additional profits in Hong Kong.
Simon Keswick
Chairman
26th July 2012
Hongkong Land Holdings Limited Consolidated Profit and Loss Account | ||||||||||||||||||||||||||||||
(unaudited) Six months ended 30th June | Year ended 31st December | |||||||||||||||||||||||||||||
2012 | 2011 | 2011 | ||||||||||||||||||||||||||||
Underlying business performance US$m | Non- trading items US$m | Total US$m | Underlying business performance US$m | Non- trading items US$m | Total US$m | Underlying business performance US$m | Non- trading items US$m | Total US$m | ||||||||||||||||||||||
Revenue (note 2) | 478.4 | - | 478.4 | 754.7 | - | 754.7 | 1,223.7 | - | 1,223.7 | ||||||||||||||||||||||||||
Net operating costs (note 3) | (119.8) | - | (119.8) | (299.7) | - | (299.7) | (392.0) | - | (392.0) | ||||||||||||||||||||||||||
Change in fair value of investment properties | - | 250.8 | 250.8 | - | 3,301.3 | 3,301.3 | - | 4,382.7 | 4,382.7 | ||||||||||||||||||||||||||
Operating profit (note 4) | 358.6 | 250.8 | 609.4 | 455.0 | 3,301.3 | 3,756.3 | 831.7 | 4,382.7 | 5,214.4 | ||||||||||||||||||||||||||
Financing charges | (46.9) | - | (46.9) | (52.4) | - | (52.4) | (99.7) | - | (99.7) | ||||||||||||||||||||||||||
Financing income | 18.0 | - | 18.0 | 16.7 | - | 16.7 | 33.2 | - | 33.2 | ||||||||||||||||||||||||||
Net financing charges | (28.9) | - | (28.9) | (35.7) | - | (35.7) | (66.5) | - | (66.5) | ||||||||||||||||||||||||||
Share of results of associates and joint ventures (note 5) | 42.0 | 59.7 | 101.7 | 22.1 | 138.5 | 160.6 | 76.3 | 221.7 | 298.0 | ||||||||||||||||||||||||||
Profit before tax | 371.7 | 310.5 | 682.2 | 441.4 | 3,439.8 | 3,881.2 | 841.5 | 4,604.4 | 5,445.9 | ||||||||||||||||||||||||||
Tax (note 6) | (51.5) | 0.1 | (51.4) | (73.8) | (0.3) | (74.1) | (133.6) | (0.9) | (134.5) | ||||||||||||||||||||||||||
Profit after tax | 320.2 | 310.6 | 630.8 | 367.6 | 3,439.5 | 3,807.1 | 707.9 | 4,603.5 | 5,311.4 | ||||||||||||||||||||||||||
Attributable to: | |||||||||||||||||||||||||||||||||||
Shareholders of the Company | 318.2 | 307.6 | 625.8 | 365.3 | 3,439.2 | 3,804.5 | 703.4 | 4,603.0 | 5,306.4 | ||||||||||||||||||||||||||
Non-controlling interests | 2.0 | 3.0 | 5.0 | 2.3 | 0.3 | 2.6 | 4.5 | 0.5 | 5.0 | ||||||||||||||||||||||||||
320.2 | 310.6 | 630.8 | 367.6 | 3,439.5 | 3,807.1 | 707.9 | 4,603.5 | 5,311.4 | |||||||||||||||||||||||||||
US¢ | US¢ | US¢ | |||||||||||||||||||||||||||||||||
Earnings per share (note 7) | |||||||||||||||||||||||||||||||||||
- basic | 26.73 | 164.82 | 228.48 | ||||||||||||||||||||||||||||||||
- diluted | 26.63 | 162.94 | 227.13 | ||||||||||||||||||||||||||||||||
Hongkong Land Holdings Limited Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||
(unaudited) Six months ended 30th June | Year ended 31st December | |||||||||||||||||||||
2012 US$m | 2011 US$m | 2011 US$m | ||||||||||||||||||||
Profit for the period | 630.8 | 3,807.1 | 5,311.4 | |||||||||||||||||||
Revaluation of other investments | 17.4 | 6.0 | (10.7) | |||||||||||||||||||
Net actuarial loss on employee benefit plans | - | - | (4.6) | |||||||||||||||||||
Net exchange translation differences | 40.0 | 64.7 | 36.9 | |||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||
- net gain/(loss) arising during the period | 23.2 | (14.9) | (1.2) | |||||||||||||||||||
- transfer to profit and loss | 2.3 | 2.6 | 5.8 | |||||||||||||||||||
25.5 | (12.3) | 4.6 | ||||||||||||||||||||
Share of other comprehensive income of associates and joint ventures | 15.8 | 65.8 | 2.8 | |||||||||||||||||||
Tax relating to components of other comprehensive income | (4.0) | 1.9 | (0.2) | |||||||||||||||||||
Other comprehensive income for the period | 94.7 | 126.1 | 28.8 | |||||||||||||||||||
Total comprehensive income for the period | 725.5 | 3,933.2 | 5,340.2 | |||||||||||||||||||
Attributable to: | ||||||||||||||||||||||
Shareholders of the Company | 720.5 | 3,930.6 | 5,335.2 | |||||||||||||||||||
Non-controlling interests | 5.0 | 2.6 | 5.0 | |||||||||||||||||||
725.5 | 3,933.2 | 5,340.2 | ||||||||||||||||||||
Hongkong Land Holdings Limited Consolidated Balance Sheet | ||||||||||||
(unaudited) At 30th June | At 31st December | |||||||||||
2012 US$m | 2011 US$m | 2011 US$m | ||||||||||
Net operating assets | ||||||||||||
Investment properties (note 9) | 23,332.8 | 21,380.5 | 22,529.9 | |||||||||
Fixed assets | 4.9 | 4.9 | 5.3 | |||||||||
Associates and joint ventures | 3,630.5 | 3,492.5 | 3,551.8 | |||||||||
Other investments | 66.0 | 65.2 | 48.6 | |||||||||
Deferred tax assets | 4.7 | 9.6 | 5.5 | |||||||||
Pension assets | 6.4 | 10.8 | 6.4 | |||||||||
Non-current debtors | 81.4 | 53.7 | 72.0 | |||||||||
Non-current assets | 27,126.7 | 25,017.2 | 26,219.5 | |||||||||
Properties for sale | 1,910.0 | 1,085.4 | 1,521.2 | |||||||||
Current debtors | 514.6 | 397.5 | 313.5 | |||||||||
Current tax assets | 3.7 | - | 1.5 | |||||||||
Bank balances | 815.5 | 771.4 | 967.9 | |||||||||
Current assets | 3,243.8 | 2,254.3 | 2,804.1 | |||||||||
Current creditors | (939.9) | (616.3) | (746.3) | |||||||||
Current borrowings (note 10) | (535.1) | (285.6) | (58.0) | |||||||||
Current tax liabilities | (84.1) | (101.5) | (82.5) | |||||||||
Current liabilities | (1,559.1) | (1,003.4) | (886.8) | |||||||||
Net current assets | 1,684.7 | 1,250.9 | 1,917.3 | |||||||||
Long-term borrowings (note 10) | (3,428.2) | (2,662.1) | (3,269.2) | |||||||||
Deferred tax liabilities | (64.0) | (58.1) | (59.4) | |||||||||
Non-current creditors | (43.3) | (99.4) | (44.4) | |||||||||
25,275.9 | 23,448.5 | 24,763.8 | ||||||||||
Total equity | ||||||||||||
Share capital | 234.4 | 232.5 | 233.8 | |||||||||
Revenue and other reserves | 25,011.2 | 23,192.5 | 24,504.7 | |||||||||
Shareholders' funds | 25,245.6 | 23,425.0 | 24,738.5 | |||||||||
Non-controlling interests | 30.3 | 23.5 | 25.3 | |||||||||
25,275.9 | 23,448.5 | 24,763.8 | ||||||||||
Hongkong Land Holdings Limited Consolidated Statement of Changes in Equity | ||||||||||||||||||||||||||||||
Attributable to shareholders of the Company | ||||||||||||||||||||||||||||||
Share capital US$m | Share premium US$m | Revenue reserves US$m | Capital reserves US$m | Hedging reserves US$m | Exchange reserves US$m | Total US$m | Attributable to non- controlling interests US$m | Total equity US$m | ||||||||||||||||||||||
Six months ended 30th June 2012 | ||||||||||||||||||||||||||||||
At 1st January 2012 | 233.8 | 315.8 | 23,881.1 | 1.5 | (13.7) | 320.0 | 24,738.5 | 25.3 | 24,763.8 | |||||||||||||||||||||
Total comprehensive income | - | - | 643.2 | - | 20.1 | 57.2 | 720.5 | 5.0 | 725.5 | |||||||||||||||||||||
Dividends paid by the Company | - | - | (234.2) | - | - | - | (234.2) | - | (234.2) | |||||||||||||||||||||
Issue of shares | 0.6 | 20.2 | - | - | - | - | 20.8 | - | 20.8 | |||||||||||||||||||||
Transfer | - | - | 1.0 | (1.0) | - | - | - | - | - | |||||||||||||||||||||
At 30th June 2012 | 234.4 | 336.0 | 24,291.1 | 0.5 | 6.4 | 377.2 | 25,245.6 | 30.3 | 25,275.9 | |||||||||||||||||||||
Six months ended 30th June 2011 | ||||||||||||||||||||||||||||||
At 1st January 2011 | 225.1 | 5.3 | 18,900.7 | 62.5 | (16.2) | 279.2 | 19,456.6 | 20.9 | 19,477.5 | |||||||||||||||||||||
Total comprehensive income | - | - | 3,810.5 | - | (10.4) | 130.5 | 3,930.6 | 2.6 | 3,933.2 | |||||||||||||||||||||
Dividends paid by the Company | - | - | (232.3) | - | - | - | (232.3) | - | (232.3) | |||||||||||||||||||||
Issue of shares | 7.4 | 262.7 | - | - | - | - | 270.1 | - | 270.1 | |||||||||||||||||||||
Transfer | - | - | 45.2 | (45.2) | - | - | - | - | - | |||||||||||||||||||||
At 30th June 2011 | 232.5 | 268.0 | 22,524.1 | 17.3 | (26.6) | 409.7 | 23,425.0 | 23.5 | 23,448.5 | |||||||||||||||||||||
Total comprehensive income for the six months ended 30th June 2012 included in revenue reserves comprises profit attributable to shareholders of the Company of US$625.8 million (2011: US$3,804.5 million) and net fair value gain on other investments of US$17.4 million (2011: US$6.0 million). Cumulative net fair value gain on other investments and net actuarial loss on employee benefit plans amounted to US$26.2 million and US$3.0 million, respectively.
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Year ended 31st December 2011 | ||||||||||||||||||||||||||||||
At 1st January 2011 | 225.1 | 5.3 | 18,900.7 | 62.5 | (16.2) | 279.2 | 19,456.6 | 20.9 | 19,477.5 | |||||||||||||||||||||
Total comprehensive income | - | - | 5,291.9 | - | 2.5 | 40.8 | 5,335.2 | 5.0 | 5,340.2 | |||||||||||||||||||||
Dividends paid by the Company | - | - | (372.5) | - | - | - | (372.5) | - | (372.5) | |||||||||||||||||||||
Dividends paid to non-controlling shareholders | - | - | - | - | - | - | - | (0.6) | (0.6) | |||||||||||||||||||||
Issue of shares | 8.7 | 310.5 | - | - | - | - | 319.2 | - | 319.2 | |||||||||||||||||||||
Transfer | - | - | 61.0 | (61.0) | - | - | - | - | - | |||||||||||||||||||||
At 31st December 2011 | 233.8 | 315.8 | 23,881.1 | 1.5 | (13.7) | 320.0 | 24,738.5 | 25.3 | 24,763.8 | |||||||||||||||||||||
Total comprehensive income for the year ended 31st December 2011 included in revenue reserves comprises profit attributable to shareholders of the Company of US$5,306.4 million, net fair value loss on other investments of US$10.7 million and net actuarial loss on employee benefit plans of US$3.8 million. Cumulative net fair value gain on other investments and net actuarial loss on employee benefit plans amounted to US$8.8 million and US$3.0 million, respectively. | ||||||||||||||||||||||||||||||
Hongkong Land Holdings Limited Consolidated Cash Flow Statement | ||||||||||||
(unaudited) Six months ended 30th June | Year ended 31st December | |||||||||||
2012 US$m | 2011 US$m | 2011 US$m | ||||||||||
Operating activities | ||||||||||||
Operating profit | 609.4 | 3,756.3 | 5,214.4 | |||||||||
Depreciation | 1.1 | 0.7 | 1.7 | |||||||||
Reversal of writedowns on development properties held for sale | (6.1) | - | (44.2) | |||||||||
Change in fair value of investment properties | (250.8) | (3,301.3) | (4,382.7) | |||||||||
(Increase)/decrease in properties for sale | (375.6) | 134.7 | (298.8) | |||||||||
Increase in debtors, prepayments and others | (199.1) | (149.4) | (70.7) | |||||||||
Increase/(decrease) in creditors and accruals | 164.7 | (105.3) | 33.2 | |||||||||
Interest received | 16.9 | 20.5 | 35.8 | |||||||||
Interest and other financing charges paid | (24.5) | (52.5) | (93.0) | |||||||||
Tax paid | (50.9) | (40.8) | (117.4) | |||||||||
Dividends from associates and joint ventures | 47.2 | 23.3 | 58.0 | |||||||||
Cash flows from operating activities | (67.7) | 286.2 | 336.3 | |||||||||
Investing activities | ||||||||||||
Major renovations expenditure | (21.9) | (21.3) | (50.8) | |||||||||
Developments capital expenditure | (488.8) | (1.0) | (38.3) | |||||||||
Investments in and loans to associates and joint ventures | 7.6 | (74.8) | (146.2) | |||||||||
Cash flows from investing activities | (503.1) | (97.1) | (235.3) | |||||||||
Financing activities | ||||||||||||
Drawdown of borrowings | 1,173.3 | 81.8 | 1,068.1 | |||||||||
Repayment of borrowings | (545.4) | (641.5) | (1,193.4) | |||||||||
Contribution from/(repayment to) non-controlling shareholders | 22.7 | (3.8) | (6.1) | |||||||||
Dividends paid by the Company | (233.6) | (231.0) | (370.9) | |||||||||
Dividends paid to non-controlling shareholders | - | - | (0.6) | |||||||||
Cash flows from financing activities | 417.0 | (794.5) | (502.9) | |||||||||
Net decrease in cash and cash equivalents | (153.8) | (605.4) | (401.9) | |||||||||
Cash and cash equivalents at beginning of period | 966.7 | 1,365.7 | 1,365.7 | |||||||||
Effect of exchange rate changes | 2.1 | 10.5 | 2.9 | |||||||||
Cash and cash equivalents at end of period | 815.0 | 770.8 | 966.7 | |||||||||
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Hongkong Land Holdings Limited Notes |
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1. | ACCOUNTING POLICIES AND BASIS OF PREPARATION
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The condensed financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting'. 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.
Amendments to IFRS 7 'Financial Instruments: Disclosures - Transfer of Financial Assets' became effective in the current accounting period and are relevant to the Group's operations. The amendments promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfer of financial assets and the effect of these risks on an entity's financial position particularly those involving securitisation of financial assets.
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There have been no changes to the accounting policies described in the 2011 annual financial statements upon the adoption of the above amendments and interpretations to existing standards.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not effective.
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2. | REVENUE
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Six months ended 30th June |
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2012 US$m | 2011 US$m |
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Rental income | 366.9 | 348.2 |
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Service income | 57.6 | 54.6 |
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Sales of trading properties | 53.9 | 351.9 |
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478.4 | 754.7 |
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Service income includes service and management charges and hospitality service income.
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3. | NET OPERATING COSTS
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Six months ended 30th June |
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2012 US$m | 2011 US$m | ||||||||||||||||||
Cost of sales | (85.0) | (267.9) | |||||||||||||||||
Other income | 3.5 | 2.3 | |||||||||||||||||
Administrative expenses | (38.3) | (34.1) | |||||||||||||||||
(119.8) | (299.7) | ||||||||||||||||||
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4. | OPERATING PROFIT |
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Six months ended 30th June |
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2012 US$m | 2011 US$m |
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By business |
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Commercial property | 358.1 | 342.4 |
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Residential property | 27.3 | 135.0 |
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Corporate | (26.8) | (22.4) |
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358.6 | 455.0 |
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Change in fair value of investment properties |
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- Commercial property | 246.6 | 3,287.3 |
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- Residential property | 4.2 | 14.0 |
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250.8 | 3,301.3 |
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609.4 | 3,756.3 |
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5. | SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES |
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Six months ended 30th June |
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2012 US$m | 2011 US$m |
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By business |
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Commercial property |
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- Operating profit | 45.5 | 38.3 |
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- Net financing charges | (15.8) | (13.7) |
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- Tax | (4.6) | (5.3) |
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- Net profit | 25.1 | 19.3 |
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Residential property |
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- Operating profit | 28.5 | 6.9 |
| ||||||||||||||||
- Net financing charges | (0.9) | (3.2) |
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- Tax | (10.8) | (0.9) |
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- Non-controlling interests | 0.1 | - |
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- Net profit | 16.9 | 2.8 |
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Underlying business performance | 42.0 | 22.1 |
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Non-trading items: |
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Change in fair value of investment properties (net of deferred tax) |
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- Commercial property | 59.8 | 134.7 |
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- Residential property | (0.1) | 3.8 |
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59.7 | 138.5 |
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101.7 | 160.6 |
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6. | TAX
|
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Six months ended 30th June |
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2012 US$m | 2011 US$m |
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Tax (charged)/credited to profit and loss is analysed as follows: |
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Current tax | (50.0) | (71.3) |
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Deferred tax |
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- changes in fair value of investment properties | 0.1 | (0.3) |
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- other temporary differences | (1.5) | (2.5) |
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(51.4) | (74.1) |
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Tax (charged)/credited relating to components of other comprehensive income is analysed as follows: |
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Cash flow hedges | (4.0) | 1.9 |
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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 (2011: nil).
Share of tax of associates and joint ventures of US$25.5 million (2011: US$11.8 million) is included in share of results of associates and joint ventures. |
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7. | EARNINGS PER SHARE
| |||||||||||||||
Basic earnings per share is calculated on profit attributable to shareholders of US$625.8 million (2011: US$3,804.5 million) and on the weighted average number of 2,341.1 million (2011: 2,308.3 million) shares in issue during the period.
Diluted earnings per share is calculated on profit attributable to shareholders of US$626.0 million (2011: US$3,807.5 million), which is after adjusting for the effects of the conversion of convertible bonds, and on the weighted average number of 2,350.7 million (2011: 2,336.7 million) shares in issue during the period. The weighted average number of shares is arrived at as follows:
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Ordinary shares in millions | ||||||||||||||||
2012 | 2011 | |||||||||||||||
Weighted average number of shares in issue | 2,341.1 | 2,308.3 | ||||||||||||||
Adjustment for shares to be issued on conversion of convertible bonds | 9.6 | 28.4 | ||||||||||||||
Weighted average number of shares for diluted earnings per share calculation | 2,350.7 | 2,336.7 | ||||||||||||||
Earnings per share is additionally calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below: | ||||||||||||||||
Six months ended 30th June | ||||||||||||||||
2012 | 2011 | |||||||||||||||
US$m | Basic earnings per share US¢ | Diluted earnings per share US¢ | US$m | Basic earnings per share US¢ | Diluted earnings per share US¢ | |||||||||||
Underlying profit attributable to shareholders | 318.2 | 13.59 | 365.3 | 15.83 | ||||||||||||
Non-trading items (note 8) | 307.6 | 3,439.2 | ||||||||||||||
Profit attributable to shareholders | 625.8 | 26.73 | 3,804.5 | 164.82 | ||||||||||||
Interest expense on convertible bonds (net of tax) | 0.2 | 3.0 | ||||||||||||||
Profit for calculation of diluted earnings per share | 626.0 | 26.63 | 3,807.5 | 162.94 | ||||||||||||
8. | NON-TRADING ITEMS
| |||||||||||||||
Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment properties; gains and losses arising from the sale of businesses, investments and investment properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.
An analysis of non-trading items is set out below:
| ||||||||||||||||
Six months ended 30th June | ||||||||||||||||
2012 US$m | 2011 US$m | |||||||||||||||
Change in fair value of investment properties | 250.8 | 3,301.3 | ||||||||||||||
Deferred tax on change in fair value of investment properties | 0.1 | (0.3) | ||||||||||||||
Share of change in fair value of investment properties of associates and joint ventures (net of deferred tax) | 59.7 | 138.5 | ||||||||||||||
Non-controlling interests | (3.0) | (0.3) | ||||||||||||||
307.6 | 3,439.2 | |||||||||||||||
9. | INVESTMENT PROPERTIES
| |||||||||||||||
Six months ended 30th June | Year ended 31st December | |||||||||||||||
2012 US$m | 2011 US$m | 2011 US$m | ||||||||||||||
Net book value at beginning of period | 22,529.9 | 18,036.0 | 18,036.0 | |||||||||||||
Exchange differences | 39.4 | 26.1 | 28.1 | |||||||||||||
Additions | 512.7 | 17.1 | 83.1 | |||||||||||||
Net revaluation surpluses | 250.8 | 3,301.3 | 4,382.7 | |||||||||||||
Net book value at end of period | 23,332.8 | 21,380.5 | 22,529.9 | |||||||||||||
10. | BORROWINGS
|
| ||||||||||||||||
At 30th June | At 31st December |
| ||||||||||||||||
2012 US$m | 2011 US$m | 2011 US$m |
| |||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
Current |
| |||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
Bank overdrafts | 0.5 | 0.6 | 1.2 |
| ||||||||||||||
Current portion of long-term borrowings |
| |||||||||||||||||
- Bank loans | 498.4 | 285.0 | 0.3 |
| ||||||||||||||
- 2.75% United States dollar convertible bonds due 2012 | 36.2 | - | 56.5 |
| ||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
535.1 | 285.6 | 58.0 |
| |||||||||||||||
Long-term |
| |||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
Bank loans | 462.7 | 440.3 | 1,062.7 |
| ||||||||||||||
5.5% United States dollar bonds due 2014 | 537.4 | 548.4 | 544.8 |
| ||||||||||||||
3.65% Singapore dollar notes due 2015 | 294.8 | 306.8 | 290.3 |
| ||||||||||||||
2.75% United States dollar convertible bonds due 2012 | - | 104.8 | - |
| ||||||||||||||
Medium term notes | 2,133.3 | 1,261.8 | 1,371.4 |
| ||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
3,428.2 | 2,662.1 | 3,269.2 |
| |||||||||||||||
| ||||||||||||||||||
3,963.3 | 2,947.7 | 3,327.2 |
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| ||||||||||||||||||
11. | DIVIDENDS |
| ||||||||||||||||
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Six months ended 30th June |
| |||||||||||||||||
2012 US$m | 2011 US$m |
| ||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
Final dividend in respect of 2011 of US¢10.00 (2010: US¢10.00) per share | 234.2 | 232.3 |
| |||||||||||||||
| ||||||||||||||||||
An interim dividend in respect of 2012 of US¢6.00 (2011: US¢6.00) per share amounting to a total of US$140.6 million (2011: US$139.5 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2012.
| ||||||||||||||||||
12. | CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES | ||||
Total capital commitments at 30th June 2012 and 31st December 2011 amounted to US$1,025.5 million and US$1,371.3 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.
| |||||
13. | RELATED PARTY TRANSACTIONS
| ||||
The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate holding company is Jardine Matheson Holdings Limited. 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 Jardine Matheson Holdings Limited ('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 in 2012 was US$1.6 million (2011: US$1.8 million), being 0.5% per annum of the Group's underlying profit in consideration for management consultancy services provided by Jardine Matheson Limited, a wholly-owned subsidiary of Jardine Matheson Holdings Limited.
Property and other services The Group rented properties to Jardine Matheson group members. Gross rents on such properties in 2012 amounted to US$11.0 million (2011: US$10.5 million).
Jardine Matheson group members provided property construction, maintenance and other services to the Group in 2012 in aggregate amounting to US$14.7 million (2011: US$18.8 million).
The outstanding balances arising from the above services at 30th June 2012 are not material.
Hotel management services Jardine Matheson group members provided hotel management services to the Group in 2012 amounting to US$1.2 million (2011: US$0.9 million).
The outstanding balances arising from the above services at 30th June 2012 are 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 Going Concern Statement | ||
The Directors are required to consider whether it is appropriate to prepare financial statements on the basis that the Company and the Group are going concerns. The Group prepares comprehensive financial forecasts and, based on these forecasts, cash resources and existing credit facilities, the Directors consider that the Company and the Group have adequate resources to continue in business for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
| ||
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 68 of the Company's Annual Report for 2011, 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 Services Authority of the United Kingdom.
| |
For and on behalf of the Board
Y.K. Pang John R. Witt
Directors
26th July 2012 | ||
| ||||
The interim dividend of US¢6.00 per share will be payable on 10th October 2012 to shareholders on the register of members at the close of business on 17th August 2012. The ex-dividend date will be on 15th August 2012, and the share registers will be closed from 20th to 24th August 2012, 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 2012 interim dividend by notifying the United Kingdom transfer agent in writing by 21st September 2012. The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 26th September 2012. 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 Hong Kong in 1889, Hongkong Land's business is built on partnership, integrity and excellence.
In Hong Kong, the Group owns and manages some 450,000 sq. m (five million sq. ft) of prime commercial space that defines the heart of the Central Business District. In Singapore, it has been instrumental in the creation of the city-state's new Central Business District at Marina Bay with the expansion of its joint venture portfolio of new developments. Hongkong Land's properties in these and other Asian centres are recognised as market leaders and house the world's foremost financial, business and luxury retail names.
Hongkong Land develops premium residential properties in a number of cities in the region, principally in China and Singapore where its subsidiary, MCL Land, is a significant developer.
Hongkong Land Holdings Limited is incorporated in Bermuda. It has a premium listing on the London Stock Exchange, and 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 | ||||
Sue So | (852) 2501 7984 | |||
As permitted by the Disclosure and Transparency Rules of the Financial Services Authority of 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. | ||||