TIDMHKLD TIDMJAR
RNS Number : 5688H
Hongkong Land Hldgs Ltd
28 July 2023
Announcement
28th July 2023
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEAR RESULTS FOR THE SIX MONTHSED 30TH JUNE 2023
Highlights
-- Underlying profit in line with first half of 2022
-- Higher profits from Investment Properties
-- Development Properties profits lower due to fewer planned
completions
"The Group's financial performance was stable in the first half
of 2023, although trading conditions are likely to remain
challenging in a number of key markets for the remainder of the
year. Full-year underlying profits are expected to improve somewhat
compared to 2022, driven by the timing of Development Properties
project completions. Modestly higher contributions from Investment
Properties are also anticipated, as improved retail trading
performance is expected to offset negative rental reversions in
Hong Kong. The Group's balance sheet remains strong."
Ben Keswick
Chairman
Results
(unaudited)
Six months ended 30th June
2023 2022 Change
US$m US$m %
---------------------------------------------------------------- ---------- ---------- --------
Underlying profit attributable to
shareholders(#) 422 425 -1
(Loss)/profit attributable to shareholders (333) 292 n/m
Shareholders' funds 32,133 33,303* -4
Net debt 5,545 5,817* -5
---------------------------------------------------------------- ---------- ---------- --------
USc USc %
---------------------------------------------------------------- ---------- ---------- --------
Underlying earnings per share(#) 19.02 18.67 +2
(Loss)/earnings per share (15.00) 12.83 n/m
Interim dividend per share 6.00 6.00 -
---------------------------------------------------------------- ---------- ---------- --------
US$ US$ %
---------------------------------------------------------------- ---------- ---------- --------
Net asset value per share 14.51 14.95* -3
---------------------------------------------------------------- ---------- ---------- --------
# 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 7 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 2022.
The interim dividend of USc6.00 per share will be payable on
11th October 2023 to shareholders on the register of members at the
close of business on 18th August 2023.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEAR RESULTS FOR THE SIX MONTHSED 30TH JUNE 2023
OVERVIEW
The Group's results from Investment Properties remained
resilient in the first half of the year, with improved performance
by the luxury retail portfolio more than offsetting a lower
contribution from the Hong Kong office portfolio. In Development
Properties, the Group recognised profit in the period from the
acquisition of additional stakes in two existing projects in China
at valuation below cost; nevertheless, profit contributions were
lower than the first half of 2022, reflecting substantially lower
planned sales completions.
PERFORMANCE
Underlying profit attributable to shareholders was US$422
million, in line with the prior year, while underlying earnings per
share were US$19.02, a 2% increase compared to the prior year.
There was a loss attributable to shareholders of US$333 million
in the first half of 2023, compared to a profit of US$292 million
in the first half of 2022. This figure reflected unrealised losses
mainly arising from Investment Properties revaluations of US$755
million and US$133 million in the first half of 2023 and 2022,
respectively. The 2023 revaluation loss is principally attributable
to the Hong Kong office portfolio following a modest decrease in
market rents and a slight cap rate expansion.
The net asset value per share at 30th June 2023 was US$14.51,
compared with US$14.95 at the end of 2022.
The Directors are recommending an interim dividend of USc6.00
per share, unchanged from the prior year.
GROUP REVIEW
Investment Properties
In Hong Kong, the Group's Central office portfolio delivered a
solid performance amidst challenging market conditions due to
uncertainty in the global financial markets. Physical and committed
vacancy was 6.9% and 6.2% respectively at the end of June 2023, an
increase from 4.9% and 4.7% at the end of 2022, although
significantly lower than the average vacancy in the Central market.
Negative rental reversions resulted in average office rents
decreasing to HK$107 per sq. ft., compared to HK$112 per sq. ft.
and HK$111 per sq. ft. in the first and second halves of 2022,
respectively.
The Group's LANDMARK retail portfolio delivered an improved
performance during the first half of 2023, following several
challenging years for the retail market in Hong Kong. An increase
in tenant sales and the removal of temporary rent relief led to an
increase in average retail rent to HK$204 per sq. ft., compared
with HK$168 per sq. ft. and HK$181 per sq. ft. in the first and
second halves of 2022, respectively. The LANDMARK retail portfolio
remains effectively fully let.
Contributions from the Group's CENTRAL series luxury retail
malls in Beijing and Macau increased in the period, due to higher
average rents as tenant sales experienced a strong recovery.
In Singapore, market conditions remained healthy, with vacancy
across the Group's office portfolio of 2.1% at the end of June
2023, compared with 7.5% at the end of 2022. On a committed basis,
vacancy was 1.0%. Rental reversions were positive, with average
rents increasing to S$10.9 per sq. ft, compared to S$10.5 per sq.
ft. and S$10.6 per sq. ft. in the first and second halves of 2022,
respectively.
Development Properties
On the Chinese mainland, the profit contribution from sales
completions in the Development Properties business was
significantly lower compared to the first half of 2022 due to a
lower number of planned sales completions.
The pace of recovery in the Chinese residential market was mixed
in the first half of 2023, with sales performance varying between
cities and individual developments. The Group's focus on premium
residential products in a select number of top-tier cities has
resulted in a better sales performance than the general market. The
weak economic outlook in China, however, weighed on consumer
sentiment despite the introduction of policy support measures. The
Group's attributable interest in contracted sales was US$745
million, compared to US$419 million and US$881 million in the first
and second halves of 2022, respectively. At 30th June 2023, the
Group had US$2,274 million in sold but unrecognised contracted
sales, compared with US$2,087 million at the end of 2022.
During the period, the Group completed the acquisition of equity
stakes in two existing projects in Nanjing and Wuhan from
joint-venture partners. These were acquired in both cases for
consideration below development cost, resulting in immediate net
fair-value pre-tax accounting gains of US$72 million. The projects
are mixed-use in nature, with residential and commercial
components.
In Singapore, where the Group recognises profits on the
percentage of completion basis, the profit contribution in the
period was broadly unchanged compared to the same period in 2022.
Market conditions remained healthy, with strong sales at the
recently launched 638-unit Tembusu Grand project, which was 55%
sold at the end of June 2023. The Group's attributable interest in
contracted sales was US$487 million, compared to US$270 million and
US$345 million in the first and second halves of 2022,
respectively.
In the rest of Southeast Asia, total contributions were lower
due to the timing of planned sales completions.
Financing
Net debt at 30th June 2023 was US$5.5 billion, down from US$5.8
billion at the end of 2022, primarily due to net cash inflows from
trading activities. Net gearing was 17%, unchanged from the end of
last year.
As at 30th June 2023, the Group had undrawn committed facilities
of US$3.3 billion, compared to US$3.1 billion at the end of 2022,
with an average debt tenor of 5.7 years, compared to 5.8 years at
the end of 2022. 54% of the Group's interest rate on debt is at
fixed rates, with an average hedge tenor of 6.5 years. The Group
issued a US$400 million 10-year public bond on 14th July 2023 to
refinance a US$400 million bond maturing in early 2024. This new
bond extended the Group's average debt and hedge tenors to 5.9 and
6.9 years, respectively.
Share Buyback
Since the Group's announcements of its US$1 billion share
buyback programme in September 2021 and July 2022, it has invested
US$599 million. Following the cancellation of these purchased
shares, the total issued share capital has reduced by 5.1%.
OUTLOOK
The Group's financial performance was stable in the first half
of 2023, although trading conditions are likely to remain
challenging in a number of key markets for the remainder of the
year. Full-year underlying profits are expected to improve somewhat
compared to 2022, driven by the timing of Development Properties
project completions. Modestly higher contributions from Investment
Properties are also anticipated, as improved retail trading
performance is expected to offset negative rental reversions in
Hong Kong. The Group's balance sheet remains strong.
Ben Keswick
Chairman
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the six months ended 30th June 2023
--------------------------------------------------------------------------------------------------------------------------
(unaudited)
Six months ended 30th June Year ended 31st December
2023 2022 2022
Underlying Non- Underlying Non- Underlying Non-
business trading business trading business trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue
(note 2) 670.3 - 670.3 894.0 - 894.0 2,244.4 - 2,244.4
Net operating
costs
(note 3) (277.6) - (277.6) (499.9) - (499.9) (1,398.4) - (1,398.4)
Change in
fair value
of investment
properties - (742.6) (742.6) - (120.5) (120.5) - (559.3) (559.3)
Operating
(loss)/profit
(note 4) 392.7 (742.6) (349.9) 394.1 (120.5) 273.6 846.0 (559.3) 286.7
Net financing
charges
* financing charges (123.7) - (123.7) (114.4) - (114.4) (234.9) - (234.9)
* financing income 40.1 - 40.1 24.9 - 24.9 66.8 - 66.8
(83.6) - (83.6) (89.5) - (89.5) (168.1) - (168.1)
Share of
results of
associates
and joint
ventures
(note 5) 164.3 (8.6) 155.7 175.5 (21.4) 154.1 229.3 (24.5) 204.8
----------- ------- ------- ----------- ------- ------- ----------- ------- ---------
(Loss)/profit
before tax 473.4 (751.2) (277.8) 480.1 (141.9) 338.2 907.2 (583.8) 323.4
Tax (note
6) (49.8) (2.7) (52.5) (55.8) 6.8 (49.0) (131.7) 7.9 (123.8)
----------- ------- ------- ----------- ------- ------- ----------- ------- ---------
(Loss)/profit
after tax 423.6 (753.9) (330.3) 424.3 (135.1) 289.2 775.5 (575.9) 199.6
----------- ------- ------- ----------- ------- ------- ----------- ------- ---------
Attributable
to:
Shareholders
of the Company
(note 7) 422.2 (755.2) (333.0) 424.6 (132.8) 291.8 776.1 (573.4) 202.7
Non-controlling
interests 1.4 1.3 2.7 (0.3) (2.3) (2.6) (0.6) (2.5) (3.1)
----------- ------- ------- ----------- ------- ------- ----------- ------- ---------
423.6 (753.9) (330.3) 424.3 (135.1) 289.2 775.5 (575.9) 199.6
----------- ------- ------- ----------- ------- ------- ----------- ------- ---------
USc USc USc USc USc USc
(Loss)/earnings
per share
(note 8) 19.02 (15.00) 18.67 12.83 34.44 8.99
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
for the six months ended 30th June 2023
Year
(unaudited) ended
Six months ended 31st
30th June December
2023 2022 2022
US$m US$m US$m
(Loss)/profit for the period (330.3) 289.2 199.6
Other comprehensive income/
( expense)
Items that will not be reclassified
to
profit or loss:
Remeasurements of defined benefit
plans - - (1.6)
Tax on items that will not
be reclassified - - 0.3
- - (1.3)
Items that may be reclassified
subsequently to profit or loss:
------- ------- --------
Net exchange translation differences
- net loss arising during the
period (209.2) (259.6) (116.8)
Cash flow hedges
* net (loss)/gain arising during the period (16.4) 20.4 2.4
- transfer to profit and loss (1.4) (2.5) (2.4)
(17.8) 17.9 -
Tax relating to items that
may be
reclassified 2.9 (3.0) -
Share of other comprehensive
expense
of associates and joint ventures (204.7) (373.5) (523.6)
(428.8) (618.2) (640.4)
Other comprehensive expense
for the
period, net of tax (428.8) (618.2) (641.7)
------- ------- --------
Total comprehensive expense
for the
period (759.1) (329.0) (442.1)
------- ------- --------
Attributable to:
Shareholders of the Company (759.1) (322.7) (431.9)
Non-controlling interests - (6.3) (10.2)
------- ------- --------
(759.1) (329.0) (442.1)
------------------------------------------------ ------- ------- --------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
at 30th June 2023
(unaudited) At 31st
At 30th June December
2023 2022 2022
US$m US$m US$m
Net operating assets
Fixed assets 104.1 118.6 111.8
Right-of-use assets 13.7 14.9 13.0
Investment properties (note
10) 27,167.4 28,278.1 28,054.1
Associates and joint ventures
(note 11) 8,943.5 9,574.0 9,616.0
Non-current debtors 13.2 34.6 16.8
Deferred tax assets 107.4 60.1 98.2
Pension assets 0.9 1.2 0.9
Non-current assets 36,350.2 38,081.5 37,910.8
Properties for sale 3,085.1 3,161.1 2,910.7
Current debtors 531.2 862.0 539.4
Current tax assets 58.5 41.4 62.5
Bank balances 1,143.4 746.7 1,173.4
----------- --------- ---------
Current assets 4,818.2 4,811.2 4,686.0
Current creditors (1,779.3) (1,982.7) (1,667.0)
Current borrowings (note 12) (858.5) (366.6) (419.1)
Current tax liabilities (238.2) (208.9) (328.9)
Current liabilities (2,876.0) (2,558.2) (2,415.0)
Net current assets 1,942.2 2,253.0 2,271.0
Long-term borrowings (note
12) (5,829.6) (6,441.6) (6,571.4)
Deferred tax liabilities (278.7) (228.4) (257.1)
Pension liabilities (2.2) (0.1) (1.8)
Non-current creditors (25.4) (17.0) (24.4)
----------- --------- ---------
32,156.5 33,647.4 33,327.1
----------- --------- ---------
Total equity
Share capital 221.5 224.3 222.7
Revenue and other reserves 31,911.9 33,395.0 33,080.7
----------- --------- ---------
Shareholders' funds 32,133.4 33,619.3 33,303.4
Non-controlling interests 23.1 28.1 23.7
----------- --------- ---------
32,156.5 33,647.4 33,327.1
----------- --------- ---------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
for the six months ended 30th June 2023
Attributable
to Attributable
shareholders to
Share Share Revenue Hedging Exchange of the non-controlling Total
capital premium reserves reserves reserves Company interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
Six months ended
30th June 2023
(unaudited)
At 1st January
2023 222.7 - 33,449.8 (3.0) (366.1) 33,303.4 23.7 33,327.1
Total
comprehensive
expense - - (333.0) (16.9) (409.2) (759.1) - (759.1)
Dividends paid
by the Company
(note 9) - - (355.9) - - (355.9) - (355.9)
Dividends paid
to
non-controlling
shareholders - - - - - - (0.6) (0.6)
Repurchase of
shares (1.2) - (53.8) - - (55.0) - (55.0)
------- ------- -------- -------- -------- ------------ --------------- --------
At 30th June 2023 221.5 - 32,707.1 (19.9) (775.3) 32,133.4 23.1 32,156.5
------- ------- -------- -------- -------- ------------ --------------- --------
Six months ended
30th June 2022
(unaudited)
At 1st January
2022 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
Total
comprehensive
(expense)/income - - 291.8 23.9 (638.4) (322.7) (6.3) (329.0)
Dividends paid
by the Company
(note 9) - - (364.5) - - (364.5) - (364.5)
Repurchase of
shares (5.5) (67.4) (204.4) - - (277.3) - (277.3)
------- ------- -------- -------- -------- ------------ --------------- --------
At 30th June 2022 224.3 - 33,745.3 3.7 (354.0) 33,619.3 28.1 33,647.4
------- ------- -------- -------- -------- ------------ --------------- --------
Year ended 31st
December 2022
At 1st January
2022 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
Total
comprehensive
(expense)/income - - 201.4 17.2 (650.5) (431.9) (10.2) (442.1)
Dividends paid
by the Company - - (498.8) - - (498.8) - (498.8)
Dividends paid
to
non-controlling
shareholders - - - - - - (0.5) (0.5)
Unclaimed
dividends
forfeited - - 1.0 - - 1.0 - 1.0
Repurchase of
shares (7.1) (67.4) (276.2) - - (350.7) - (350.7)
At 31st December
2022 222.7 - 33,449.8 (3.0) (366.1) 33,303.4 23.7 33,327.1
------- ------- -------- -------- -------- ------------ --------------- --------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the six months ended 30th June 2023
(unaudited)
Six months ended Year ended
30th June 31st December
2023 2022 2022
US$m US$m US$m
Operating activities
Operating (loss)/profit (349.9) 273.6 286.7
Depreciation and amortisation 8.4 8.9 17.5
Change in fair value of investment properties 742.6 120.5 559.3
Loss on disposal of fixed assets - - 2.8
Gain on acquisition of subsidiaries (31.6) - (1.3)
(Increase)/decrease in properties for
sale (41.6) (358.8) 88.9
(Increase)/decrease in debtors (9.2) 157.0 487.4
Increase/(decrease) in creditors 123.9 (143.3) (498.0)
Interest received 22.4 13.3 45.6
Interest and other financing charges
paid (124.0) (105.0) (228.2)
Tax paid (127.2) (42.9) (124.7)
Dividends from associates and joint
ventures 58.9 42.1 222.3
Cash flows from operating activities 272.7 (34.6) 858.3
Investing activities
Major renovations expenditure (48.1) (41.5) (94.6)
Repayments from/(investments in and
advances to) associates and joint
ventures 482.7 (310.6) (617.6)
Acquisition of subsidiaries (30.9) - (14.5)
Cash flows from investing activities 403.7 (352.1) (726.7)
Financing activities
Drawdown of borrowings 836.6 1,087.7 2,399.6
Repayment of borrowings (1,106.6) (753.3) (1,954.7)
P rincipal elements of lease payments (1.5) (1.9) (4.1)
Repurchase of shares (55.0) (278.9) (352.3)
Dividends paid by the Company (353.6) (370.6) (503.7)
Dividends paid to non-controlling shareholders (0.6) - (0.5)
Cash flows from financing activities (680.7) (317.0) (415.7)
Net cash outflow (4.3) (703.7) (284.1)
Cash and cash equivalents at beginning
of period 1,171.5 1,476.1 1,476.1
Effect of exchange rate changes (26.4) (30.2) (20.5)
Cash and cash equivalents at end of
period 1,140.8 742.2 1,171.5
----------- ------- ------------
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' and 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 changes to the accounting policies as described in
the 2022 annual financial statements. Amendments that were
effective from 1st January 2023 and relevant to the Group's
operations are set out below:
Amendment to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction (effective from 1st
January 2023)
The amendment requires deferred tax to be recognised on
transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences. They
typically apply to transactions such as leases of lessees and
decommissioning obligations and require the recognition of
additional deferred tax assets and liabilities.
Amendments to IAS 12 - International Tax Reform - Pillar Two
Model Rules (effective for annual reporting period commencing on or
after 1st January 2023)
The amendment provides a temporary mandatory exception from
deferred tax accounting in respect of Pillar Two income taxes and
certain additional disclosure requirements. The Group is in the
process of assessing the estimated impact of Pillar Two income
taxes to its consolidated financial statements and appropriate
disclosures will be made in the financial statements for the year
ending 31st December 2023.
The Group has not early adopted any amendments that have been
issued but not yet effective.
2. REVENUE
Six months ended 30th June
2023 2022
US$m US$m
Rental income 463.9 455.6
Service income 103.2 92.2
Sales of properties
----- -----
- recognised at a point in time 94.4 235.4
- recognised over time 8.8 110.8
103.2 346.2
----- -----
670.3 894.0
----- -----
By business
Investment Properties 538.4 521.4
Development Properties 131.9 372.6
----- -----
670.3 894.0
----- -----
3. NET OPERATING COSTS
Six months ended 30th June
2023 2022
US$m US$m
Cost of sales (218.3) (402.8)
Other income 21.1 9.8
Gain on acquisition of subsidiaries 31.6 -
Administrative expenses (112.0) (106.9)
(277.6) (499.9)
------- -------
4. OPERATING (LOSS)/PROFIT
Six months ended 30th June
2023 2022
US$m US$m
By business
Investment Properties 422.1 412.8
Development Properties 18.3 25.9
Corporate (47.7) (44.6)
------- -------
Underlying business performance 392.7 394.1
Change in fair value of investment properties (742.6) (120.5)
(349.9) 273.6
------- -------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2023 2022
US$m US$m
By business
Investment Properties
- operating profit 75.4 68.5
- net financing charges (25.1) (17.6)
- tax (8.3) (8.7)
- net profit 42.0 42.2
Development Properties
- operating profit 161.2 196.8
- net financing charges (15.8) (4.6)
- tax (23.1) (57.8)
- non-controlling interests - (1.1)
- net profit 122.3 133.3
------ ------
Underlying business performance 164.3 175.5
Change in fair value of investment properties
(net of deferred tax) (8.6) (21.4)
155.7 154.1
------ ------
6. TAX
Six months ended 30th June
2023 2022
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (47.8) (40.5)
Deferred tax
- changes in fair value of investment
properties (2.7) 6.8
- other temporary differences (2.0) (15.3)
------ ------
(52.5) (49.0)
------ ------
Tax relating to components of other comprehensive
income or expense is analysed as follows:
Cash flow hedges 2.9 (3.0)
------ ------
Tax on profits has been calculated at the rates of taxation
prevailing in the territories in which the Group operates.
The Group has applied the exception to recognising and
disclosing information about deferred tax assets and liabilities
relating to Pillar Two income tax.
Share of tax charge of associates and joint ventures of US$30.5
million (2022: US$65.2 million) is included in share of results of
associates and joint ventures.
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties; gains and losses arising
from the sale of businesses and investment properties; provisions
for the closure of businesses; acquisition-related costs in
business combinations; and other credits and charges of a
non-recurring nature that require inclusion in order to provide
additional insight into underlying business performance.
An analysis of non-trading items after interest, tax and
non-controlling interests is set out below:
Six months ended 30th June
20 23 2022
US$m US$m
Change in fair value of investment properties (742.6) (120.5)
Deferred tax on change in fair value of investment
properties (2.7) 6.8
Share of change in fair value of investment properties
of
associates and joint ventures (net of deferred
tax) (8.6) (21.4)
Non-controlling interests (1.3) 2.3
(755.2) (132.8)
------- -------
8. (LOSS)/EARNINGS PER SHARE
Loss per share are calculated on loss attributable to
shareholders of US$333.0 million (2022: profit of US$291.8 million)
and on the weighted average number of 2,220.2 million (2022:
2,274.0 million) shares in issue during the period.
Earnings per share are additionally calculated based on
underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
Six months ended 30th June
2023 2022
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to
shareholders 422.2 19.02 424.6 18.67
Non-trading items (note 7) (755.2) (132.8)
(Loss)/profit attributable
to shareholders (333.0) (15.00) 291.8 12.83
------- -------
9. DIVIDS
Six months ended 30th June
2023 2022
US$m US$m
Final dividend in respect of 2022 of USc 16
.00
(2021: USc16.00) per share 355.9 364.5
----- -----
An interim dividend in respect of 20 23 of USc 6 .00 (2022:
USc6.00) per share amounting to a total of US$132.9 million (2022:
US$134.3 million) is declared by the Board and will be accounted
for as an appropriation of revenue reserves in the year ending 31st
December 20 23 .
10. INVESTMENT PROPERTIES
Year ended
31st
Six months ended 30th June December
2023 2022 2022
US$m US$m US$m
At beginning of period 28,054.1 28,600.2 28,600.2
Exchange differences (179.2) (232.7) (77.3)
Additions 35.1 31.1 95.4
Transfer to fixed assets - - (4.9)
Decrease in fair value (742.6) (120.5) (559.3)
----------
At end of period 27,167.4 28,278.1 28,054.1
-------- -------- ----------
11. ASSOCIATES AND JOINT VENTURES
At 31st
At 30th June December
2023 2022 2022
US$m US$m US$m
By business
Investment Properties 4,480.1 4,870.3 4,960.4
Development Properties 4,463.4 4,703.7 4,655.6
----------
8,943.5 9,574.0 9,616.0
------- ------- ----------
12. BORROWINGS
At 30th June At 31st December
2023 2022 2022
US$m US$m US$m
Current
Bank overdrafts 2.6 4.5 1.9
Bank loans 61.5 117.8 87.4
Current portion of long-term
borrowings
- bank loans 219.1 179.9 150.4
- medium term notes 575.3 64.4 179.4
858.5 366.6 419.1
Long-term
Bank loans 2,586.6 2,630.5 2,924.9
Medium term notes
- due 2023 - 178.2 -
- due 2024 - 397.8 394.9
- due 2025 641.9 643.5 642.9
- due 2026 38.4 38.3 38.6
- due 2027 185.3 184.9 186.2
- due 2028 181.8 181.4 182.7
- due 2029 120.8 120.5 121.3
- due 2030 698.0 697.3 698.3
- due 2031 569.0 568.4 569.2
- due 2032 139.5 139.2 140.2
- due 2033 88.7 88.6 89.2
- due 203 4 76.7 76.6 77.1
- due 203 5 252.6 252.1 253.8
- due 2038 108.8 105.8 109.6
- due 203 9 109.7 106.8 110.6
- due 2040 31.8 31.7 31.9
3,243.0 3,811.1 3,646.5
5,829.6 6,441.6 6,571.4
------- ------- ----------------
6,688.1 6,808.2 6,990.5
------- ------- ----------------
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities,
together with carrying amounts at 30th June 2023 and 31st December
2022 are as follows:
Financial
Fair value of assets Other Total
hedging at amortised financial carrying Fair
instruments costs liabilities amount value
US$m US$m US$m US$m US$m
30th June 2023
Financial assets measured
at fair value
Derivative financial instruments 3.4 - - 3.4 3.4
------- -------------
Financial assets not measured
at fair value
Debtors - 410.3 - 410.3 410.3
Bank balances - 1,143.4 - 1,143.4 1,143.4
------- ------------- --------- ---------
- 1,553.7 - 1,553.7 1,553.7
------- ------------- ------------- --------- ---------
Financial liabilities measured
at fair value
Derivative financial instruments (19.7) - - (19.7) (19.7)
------- -------------
Financial liabilities not
measured at fair value
Borrowings - - (6,688.1) (6,688.1) (6,384.4)
Trade and other payable excluding
non-financial liabilities - - (797.9) (797.9) (797.9)
- - (7,486.0) (7,486.0) (7,182.3)
------- ------------- ------------- --------- ---------
31st December 2022
Financial assets measured
at fair value
Derivative financial instruments 5.0 - - 5.0 5.0
------- ---------
Financial assets not measured
at fair value
Debtors - 418.0 - 418.0 418.0
Bank balances - 1,173.4 - 1,173.4 1,173.4
------- ------- --------- -----------
- 1,591.4 - 1,591.4 1,591.4
------- ------- --------- --------- -----------
Financial liabilities measured
at fair value
Derivative financial instruments (16.2) - - (16.2) (16.2)
------- ------- --------- --------- -----------
Financial liabilities not
measured at fair value
Borrowings - - (6,990.5) (6,990.5) (6,616.7)
Trade and other payable excluding
non-financial liabilities - - (882.0) (882.0) (882.0)
- - (7,872.5) (7,872.5) (7,498.7)
------- ------- --------- --------- -----------
Fair value estimation
(a) Financial instruments that are measured at fair value based
on observable current market transactions
At 30th At 31st December
June 2023 2022
US$m US$m
Assets
Derivative designated at fair value
- through other comprehensive income 3.4 5.0
---------- ----------------
Liabilities
Derivative designated at fair value
- through other comprehensive income (18.9) (12.8)
- through profit and loss (0.8) (3.4)
(19.7) (16.2)
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 20 23 and the year ended 31st December
2022.
(b) Financial instruments that are not measured at fair
value
The fair values of current debtors, bank balances, current
creditors, current borrowings and current lease liabilities 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. The fair values of non-current
lease liabilities are estimated using the expected future payments
discounted at market interest rates.
14. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2023 and 31st December
2022 amounted to US$985.8 million and US$1,016.9 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.
15. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Limited
('JSL') and the ultimate parent company of the Group is Jardine
Matheson Holdings Limited ('JMH'). Both JMH and JSL 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 during the six months ended 30th
June 2023 are described below:
Management fee
The management fee payable by the Group, under an agreement
entered into in 1995, to Jardine Matheson Limited ('JML') was
US$2.1 million (2022: US$2.1 million), 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 amounted to US$9.0 million (2022:
US$8.4 million).
The Group provided project management services and property
management services to Jardine Matheson group members amounting to
US$1.4 million (2022: US$1.3 million).
Jardine Matheson group members provided property maintenance and
other services to the Group in aggregate amounting to US$27.6
million (2022: US$26.2 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group amounting to US$1.8 million (2022: US$1.0
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.
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
-- Commercial Risk
-- Financial and Treasury Risk
-- Regulatory and Political Risk
-- Pandemic, War, Terrorism and Natural Disasters Risk
-- Key Contracts Risk
-- Cybersecurity Risk
-- Governance and Misconduct Risk
-- Health and Safety Risk
-- People Risk
-- Investment, Strategic Transactions and Partnerships Risk
-- Environmental and Climate Risk
For greater detail, please refer to pages 101 to 105 of the
Company's Annual Report for 2022, a copy of which is available on
the Company's website www.hkland.com.
Hongkong Land Holdings Limited
Responsibility Statements
The Directors of the Company confirm to the best of their
knowledge that:
(a) the condensed financial statements prepared in accordance
with IAS 34 'Interim Financial Reporting' give a true and fair view
of the assets, liabilities, financial position and profit and
losses of the Group; and
(b) the interim management report includes a fair review of all
information required to be disclosed under Rules 4.2.7 and 4.2.8 of
the Disclosure Guidance and Transparency Rules issued by the
Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Robert Wong
Craig Beattie
Directors
Hongkong Land Holdings Limited
Dividend Information for Shareholders
The interim dividend of USc6.00 per share will be payable on
11th October 2023 to shareholders on the register of members at the
close of business on 18th August 2023. The shares will be quoted
ex-dividend on 17th August 2023, and the share registers will be
closed from 21st to 25th August 2023, inclusive.
Shareholders will receive cash dividends in United States
Dollars, except when elections are made for alternate currencies in
the following circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register can elect
for their dividends to be paid in Sterling. These shareholders may
make new currency elections for the 2023 interim dividend by
notifying the United Kingdom transfer agent in writing by 22nd
September 2023. The Sterling equivalent of dividends declared in
United States Dollars will be calculated by reference to a rate
prevailing on 27th September 2023.
Shareholders holding their shares through CREST in the United
Kingdom will receive cash dividends in Sterling only, as calculated
above.
Shareholders on the Singapore branch register who hold their
shares through T he Central Depository (Pte) Limited ('CDP')
Shareholders who are on CDP's Direct Crediting Service
('DCS')
Those shareholders on CDP's DCS will receive their cash
dividends in Singapore Dollars unless they opt out of CDP Currency
Conversion Service, through CDP, to receive United States
Dollars.
Shareholders who are not on CDP's DCS
Those shareholders not on CDP's DCS 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 18th August 2023, must submit the relevant documents to
M & C Services Private Limited, the Singapore branch registrar,
by no later than 5.00 p.m. (local time) on 17th August 2023.
Hongkong Land Holdings Limited
About Hongkong Land Group
Hongkong Land is a major listed 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 more than 850,000 sq. m. of prime
office and luxury retail assets in key Asian cities, principally
Hong Kong, Singapore, Beijing and Jakarta. Its properties hold
industry leading green building certifications and attract the
world's foremost companies and luxury brands.
The Group's Central Hong Kong 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, five retail centres on the Chinese mainland, including a
luxury retail centre at Wangfujing in Beijing, and a 50% interest
in a leading office complex in Central Jakarta. The Group also has
a number of high-quality residential, commercial and mixed-use
projects under development in cities across China and Southeast
Asia, including a 43% interest in a 1.1 million sq. m. mixed-use
project in West Bund, Shanghai. Its subsidiary, MCL Land, is a
well-established residential developer in Singapore.
Hongkong Land Holdings Limited is incorporated in Bermuda and
has a primary listing in the standard segment of the London Stock
Exchange, 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
Mark Lam (852) 2842 8211
Gary Leung (852) 2842 8601
Brunswick Group Limited
Kay Lau (852) 6021 7009
As permitted by the Disclosure Guidance and Transparency Rules
of the Financial Conduct Authority in the United Kingdom, the
Company will not be posting a printed version of the Half-Year
Results announcement for the six months ended 30th June 2023 to
shareholders. This Half-Year Results announcement will be made
available on the Company's website, www.hkland.com, together with
other Group announcements.
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END
IR GCGDRLXDDGXI
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