TIDMHKLD TIDMJAR TIDMJDS
RNS Number : 8227M
Hongkong Land Hldgs Ltd
03 August 2017
To: Business Editor 3rd August 2017
For immediate release
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-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2017
Highlights
-- Underlying profit up 32%
-- Positive performance from investment properties
-- Higher sales completions
-- New property developments in Singapore, Nanjing and Wuhan
"The good performance of the Group's investment property
portfolio is expected to continue in the second half of the year,
although the contribution from development properties will not
benefit from further sales completions in Singapore."
Ben Keswick
Chairman
Results
(unaudited)
Six months ended 30th
June
2017 2016 Change
US$m US$m %
Underlying profit attributable to
shareholders(#) 517 393 +32
Profit attributable to shareholders 3,125 1,263 +147
Shareholders' funds 34,221 31,294* +9
Net debt 1,882 2,008* -6
USc USc %
Underlying earnings per share(#) 21.99 16.70 +32
Earnings per share 132.83 53.70 +147
Interim dividend per share 6.00 6.00 -
US$ US$ %
Net asset value per share 14.54 13.30* +9
# 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 2016
The interim dividend of USc6.00 per share will be payable on
19th October 2017 to shareholders on the
register of members at the close of business on 25th August
2017.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2017
OVERVIEW
The Group's investment properties produced an increased
contribution due to higher average rents achieved in Hong Kong. Of
the Group's development properties, being residential and mixed-use
projects developed for sale in the short to medium-term, higher
sales completions led to increased profits in both mainland China
and Singapore.
PERFORMANCE
During the first half of the year, the Group's underlying profit
attributable to shareholders was US$517 million, compared with
US$393 million in 2016. The profit attributable to shareholders was
US$3,125 million after accounting for a net gain of US$2,608
million arising on the revaluation of the Group's investment
properties. This compares with a profit of US$1,263 million in
2016, after a net revaluation gain of US$870 million.
The net asset value per share at 30th June 2017 was US$14.54,
compared to US$13.30 at 31st December 2016.
The Directors have declared an unchanged interim dividend of
USc6.00 per share.
GROUP REVIEW
Investment Properties
In Hong Kong, office rental reversions were positive as market
supply remained tight. Vacancy in the Group's Central office
portfolio at 30th June 2017 was 1.5%, compared with 2.2% at the end
of 2016 and 3.1% at 30th June 2016. The Group's average office rent
rose to HK$106 per sq. ft, compared to HK$103 per sq. ft in both
the first and second halves of 2016. The Group's Central retail
portfolio was 99.4% occupied, compared to 100% at the end of 2016
and at 30th June 2016. While base rents were little changed on
reversion, the positive reversions seen in 2016 led to the average
retail rent increasing to HK$224 per sq. ft, compared with HK$216
per sq. ft and HK$220 per sq. ft in the first and second halves of
2016, respectively.
Mildly negative rental reversions continued in the Group's
Singapore office portfolio, reflecting the current relative surplus
of market supply, with vacancy at the end of June of 0.2% compared
with 0.1% at the end of 2016 and 1.0% at 30th June 2016. The
average office rent decreased slightly to S$9.1 per sq. ft,
compared with S$9.4 per sq. ft and S$9.2 per sq. ft in the first
and second halves of 2016, respectively.
In mainland China, the construction and leasing of the Group's
luxury retail and hotel complex in Beijing, WF CENTRAL in
Wangfujing, is progressing well, with the retail component
scheduled to open in late 2017 and the 74-room Mandarin Oriental
hotel in 2018. In Jakarta, the 73,000 sq. m. fifth tower at Jakarta
Land, the Group's 50%-owned joint venture, is due to complete in
early 2018. In Cambodia, space in the Group's 26,000 sq. m. prime
mixed-use complex is being progressively taken up by tenants.
In June 2017, a joint venture agreement was reached to construct
and manage a well-located site within the Marina Bay Financial
District of Singapore with a developable area of 120,000 sq. m. The
Group will have a 33% interest in the project, which will be
connected to its existing portfolio in the district.
Development Properties
In mainland China the business benefited from further
completions of primarily residential units and positive market
sentiment, resulting in both an increase in overall contracted
sales and an improved profit contribution. The attributable
interest in contracted sales in mainland China was US$701 million
in the first half of 2017, compared to US$432 million and US$673
million in the first and second halves of 2016, respectively. At
30th June 2017, the Group had US$1,421 million in sold but
unrecognised contracted sales, compared with US$1,083 million at
the end of 2016.
During the period, the Group entered into two new markets in
mainland China. In February 2017, a conditional agreement was
reached to develop jointly a mixed-use site in Wuhan, with a
developable area of 494,000 sq. m., in which the Group will have a
50% interest. In April 2017, an agreement was signed to develop
jointly a mixed-use site in Nanjing, with a developable area of
217,000 sq. m., in which the Group will have a 33% interest. Both
projects will be developed over multiple phases through to
2021.
Results from the Group's residential development activities in
Singapore reflected the recognition of profit on the 699-unit
LakeVille project, which was completed during the first half of the
year, while there were no completions in the first half of 2016.
Pre-sales continued at the Sol Acres and Lake Grande projects with
satisfactory results. In May 2017, the Group won a tender for a
residential site with a developable area of 98,000 sq. m., which is
expected to complete in 2021.
Of the Group's other properties, three joint venture residential
projects in Indonesia are advancing on schedule. In the
Philippines, satisfactory progress is being made in the
construction of a 40%-owned 182-unit luxury apartment block in
Manila and a 40%-owned mixed-use development in Cebu. In Thailand,
the Group entered into a 49%-held joint venture to develop a
residential site, with a developable area of 38,000 sq. m.
Construction is expected to commence in early 2018 and will
complete in 2020.
Financing
The Group's financial position remains strong with net debt of
US$1.9 billion at 30th June 2017, down from US$2.0 billion at the
end of 2016. Net gearing was 5%, compared with 6% at the end of the
year.
OUTLOOK
The good performance of the Group's investment property
portfolio is expected to continue in the second half of the year,
although the contribution from development properties will not
benefit from further sales completions in Singapore.
Ben Keswick
Chairman
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
(unaudited)
Six months ended 30th June Year ended 31st December
2017 2016 2016
Underlying Non- Underlying Non- Underlying Non-
business trading business trading business trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 1,296.7 - 1,296.7 782.8 - 782.8 1,993.9 - 1,993.9
Net operating
costs (note
3) (786.4) - (786.4) (327.3) - (327.3) (1,023.3) - (1,023.3)
Change in fair
value of
investment
properties - 2,693.6 2,693.6 - 986.2 986.2 - 2,549.9 2,549.9
Asset impairment
reversals - - - - - - - 1.2 1.2
Operating profit
(note 4) 510.3 2,693.6 3,203.9 455.5 986.2 1,441.7 970.6 2,551.1 3,521.7
Financing charges (57.4) - (57.4) (54.4) - (54.4) (110.4) - (110.4)
Financing income 21.6 - 21.6 22.1 - 22.1 41.5 - 41.5
Net financing
charges (35.8) - (35.8) (32.3) - (32.3) (68.9) - (68.9)
Share of results
of associates
and
joint ventures
(note 5) 135.3 (76.4) 58.9 59.6 (120.9) (61.3) 117.0 (57.9) 59.1
----------- ------- ------- ----------- ------- ------- ------------ -------- ---------
Profit before tax 609.8 2,617.2 3,227.0 482.8 865.3 1,348.1 1,018.7 2,493.2 3,511.9
Tax (note 6) (91.5) 0.1 (91.4) (89.0) 1.0 (88.0) (168.1) 0.8 (167.3)
----------- ------- ------- ----------- ------- ------- ------------ -------- ---------
Profit after tax 518.3 2,617.3 3,135.6 393.8 866.3 1,260.1 850.6 2,494.0 3,344.6
----------- ------- ------- ----------- ------- ------- ------------ -------- ---------
Attributable to:
Shareholders of
the Company 517.4 2,607.9 3,125.3 392.8 870.6 1,263.4 847.8 2,498.5 3,346.3
Non-controlling
interests 0.9 9.4 10.3 1.0 (4.3) (3.3) 2.8 (4.5) (1.7)
----------- ------- ------- ----------- ------- ------- ------------ -------- ---------
518.3 2,617.3 3,135.6 393.8 866.3 1,260.1 850.6 2,494.0 3,344.6
----------- ------- ------- ----------- ------- ------- ------------ -------- ---------
USc USc USc USc USc USc
Earnings per
share (note
7) 21.99 132.83 16.70 53.70 36.03 142.23
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
Year
(unaudited) ended
Six months ended 31st
30th June December
2017 2016 2016
US$m US$m US$m
Profit for the period 3,135.6 1,260.1 3,344.6
Other comprehensive income/(expense)
Items that will not be reclassified
to
profit or loss:
Remeasurements of defined benefit
plans - - (1.2)
Tax on items that will not be
reclassified - - 0.2
- - (1.0)
Items that may be reclassified
subsequently to profit or loss:
------- -------- --------
Net exchange translation differences (25.1) 26.4 (172.1)
Revaluation of other investments 36.7 (7.9) (9.1)
Cash flow hedges
* net (loss)/gain arising during the period (31.4) 36.0 41.8
- transfer to profit and loss (1.6) (1.3) (2.5)
(33.0) 34.7 39.3
Tax relating to items that may
be
reclassified 5.4 (5.7) (6.5)
Share of other comprehensive
income/(expense) of associates
and joint ventures 125.7 52.0 (144.9)
109.7 99.5 (293.3)
Other comprehensive income/(expense)
for the period, net of tax 109.7 99.5 (294.3)
------- -------- --------
Total comprehensive income for
the
period 3,245.3 1,359.6 3,050.3
------- -------- --------
Attributable to:
Shareholders of the Company 3,232.9 1,364.0 3,055.2
Non-controlling interests 12.4 (4.4) (4.9)
------- -------- --------
3,245.3 1,359.6 3,050.3
------------------------------------------------ ------- -------- --------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2017 2016 2016
US$m US$m US$m
Net operating assets
Tangible fixed assets 50.0 36.6 44.9
Investment properties (note 10) 30,360.0 26,079.4 27,712.3
Associates and joint ventures 4,659.3 4,583.6 4,460.7
Other investments 88.4 53.3 52.2
Non-current debtors 36.8 80.8 60.1
Deferred tax assets 11.0 9.4 8.7
Pension assets - 0.1 -
Non-current assets 35,205.5 30,843.2 32,338.9
Properties for sale 1,971.7 2,745.6 2,217.4
Current debtors 564.4 377.1 480.3
Current tax assets 19.0 18.5 9.2
Bank balances 1,902.0 1,560.3 1,908.9
--------- --------- ---------
Current assets 4,457.1 4,701.5 4,615.8
--------- --------- ---------
Current creditors (1,354.1) (1,640.2) (1,490.3)
Current borrowings (note 11) (364.4) (18.8) (220.7)
Current tax liabilities (116.9) (119.9) (80.0)
--------- --------- ---------
Current liabilities (1,835.4) (1,778.9) (1,791.0)
--------- --------- ---------
Net current assets 2,621.7 2,922.6 2,824.8
Long-term borrowings (note 11) (3,419.4) (3,863.0) (3,695.7)
Deferred tax liabilities (122.9) (101.9) (121.5)
Pension liabilities (2.4) (0.2) (1.8)
Non-current creditors (29.1) (26.8) (30.3)
--------- --------- ---------
34,253.4 29,773.9 31,314.4
--------- --------- ---------
Total equity
Share capital 235.3 235.3 235.3
Share premium 386.9 386.9 386.9
Revenue and other reserves 33,599.3 29,121.0 30,672.2
--------- --------- ---------
Shareholders' funds 34,221.5 29,743.2 31,294.4
Non-controlling interests 31.9 30.7 20.0
--------- --------- ---------
34,253.4 29,773.9 31,314.4
--------- --------- ---------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
Attributable to Attributable
shareholders to non-
Share Share Revenue Hedging Exchange of the 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 2017 (unaudited)
At 1st January
2017 235.3 386.9 31,093.6 18.6 (440.0) 31,294.4 20.0 31,314.4
Total
comprehensive
income - - 3,162.0 (30.0) 100.9 3,232.9 12.4 3,245.3
Dividends paid by
the Company
(note
9) - - (305.8) - - (305.8) - (305.8)
Dividends paid to
non-controlling
shareholders - - - - - - (0.5) (0.5)
------- ------- -------- -------- -------- ------------ ------------ ----------
At 30th June 2017 235.3 386.9 33,949.8 (11.4) (339.1) 34,221.5 31.9 34,253.4
------- ------- -------- -------- -------- ------------ ------------ ----------
Six months ended
30th June 2016
(unaudited)
At 1st January
2016 235.3 386.9 28,205.8 (9.1) (133.9) 28,685.0 35.4 28,720.4
Total
comprehensive
income - - 1,255.5 24.6 83.9 1,364.0 (4.4) 1,359.6
Dividends paid by
the Company
(note
9) - - (305.8) - - (305.8) - (305.8)
Dividends paid to
non-controlling
shareholders - - - - - - (0.3) (0.3)
------- ------- -------- -------- -------- ------------ ------------ ----------
At 30th June 2016 235.3 386.9 29,155.5 15.5 (50.0) 29,743.2 30.7 29,773.9
------- ------- -------- -------- -------- ------------ ------------ ----------
Total comprehensive income for the six months ended 30th June 2017 included in revenue reserves mainly
comprises profit attributable to shareholders of the Company of US$3,125.3 million (2016: US$1,263.4 million)
and a fair value gain on other investments of US$36.7 million (2016: a loss of US$7.9 million). The cumulative
fair value gain on other investments amounted to US$51.1 million (2016: US$15.6 million).
Year ended 31st
December 2016
At 1st January 2016 235.3 386.9 28,205.8 (9.1) (133.9) 28,685.0 35.4 28,720.4
Total comprehensive
income - - 3,336.2 27.7 (308.7) 3,055.2 (4.9) 3,050.3
Dividends paid by the
Company - - (447.0) - - (447.0) - (447.0)
Dividends paid to
non-controlling
shareholders - - - - - - (4.2) (4.2)
Unclaimed dividends
forfeited - - 0.5 - - 0.5 - 0.5
Change in interests
in subsidiaries - - (1.9) - 2.6 0.7 (6.3) (5.6)
-------- -------- -------- -------- -------- ------------ ------------ --------
At 31st December 2016 235.3 386.9 31,093.6 18.6 (440.0) 31,294.4 20.0 31,314.4
-------- -------- -------- -------- -------- ------------ ------------ --------
The comprehensive income for the year ended 31st December 2016 included in revenue reserves mainly comprises
profit attributable to shareholders of the Company of US$3,346.3 million and a fair value loss on other
investments of US$9.1 million. The cumulative fair value gain on other investments amounted to US$14.4
million.
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
(unaudited)
Six months ended Year ended
30th June 31st December
2017 2016 2016
US$m US$m US$m
Operating activities
Operating profit 3,203.9 1,441.7 3,521.7
Depreciation 1.4 1.5 3.1
Reversal of writedowns on properties
for sale - (1.5) (3.2)
Change in fair value of investment
properties (2,693.6) (986.2) (2,549.9)
Asset impairment reversals - - (1.2)
Decrease in properties for sale 323.7 17.7 392.4
Increase in debtors (40.6) (20.0) (131.7)
(Decrease)/increase in creditors (150.4) 70.5 (7.5)
Interest received 18.2 21.2 36.4
Interest and other financing charges
paid (58.0) (57.7) (111.4)
Tax paid (61.2) (49.7) (140.6)
Dividends from associates and joint
ventures 29.3 29.9 88.1
Cash flows from operating activities 572.7 467.4 1,096.2
Investing activities
Major renovations expenditure (47.3) (47.0) (91.3)
Developments capital expenditure (52.5) (62.2) (148.2)
Investments in and loans to associates
and
joint ventures (262.1) (4.7) (104.2)
Advances and repayments from associates
and joint ventures 230.6 33.3 102.8
Payment of deposit for a joint
venture (43.5) - (4.2)
Cash flows from investing activities (174.8) (80.6) (245.1)
Financing activities
Drawdown of borrowings 74.1 102.8 266.7
Repayment of borrowings (219.9) (169.6) (240.6)
Dividends paid by the Company (302.0) (302.9) (443.8)
Dividends paid to non-controlling
shareholders (0.5) (2.1) (4.2)
Change in interests in subsidiaries 15.0 - (20.2)
Cash flows from financing activities (433.3) (371.8) (442.1)
Net cash (outflow)/inflow (35.4) 15.0 409.0
Cash and cash equivalents at beginning
of
period 1,898.4 1,565.9 1,565.9
Effect of exchange rate changes 28.5 (22.4) (76.5)
Cash and cash equivalents at end
of period 1,891.5 1,558.5 1,898.4
----------- ------- --------------
Hongkong Land Holdings Limited
Notes to Condensed Financial Statements
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The condensed financial statements have been prepared in
accordance with IAS 34, 'Interim Financial Reporting'. The
condensed financial statements have been prepared on a going
concern basis. The condensed financial statements have not been
audited or reviewed by the Group's auditors pursuant to the UK
Auditing Practices Board guidance on the review of interim
financial information.
There are no new or amendments, which are effective in the
current accounting period and relevant to the Group's operations,
that have a significant effect on the Group's accounting policies.
There have been no changes to the accounting policies described in
the 2016 annual financial statements.
2. REVENUE
Six months ended 30th June
2017 2016
US$m US$m
Rental income 445.5 427.7
Service income 67.3 64.9
Sales of properties 783.9 290.2
------- -----
1,296.7 782.8
------- -----
Service income includes service and management charges and
hospitality service income.
3. NET OPERATING COSTS
Six months ended 30th June
2017 2016
US$m US$m
Cost of sales (729.7) (280.6)
Other income 6.1 5.0
Administrative expenses (62.8) (51.7)
------- -------
(786.4) (327.3)
------- -------
4. OPERATING PROFIT
Six months ended 30th June
2017 2016
US$m US$m
By business
Investment Properties 433.5 410.6
Development Properties 110.4 73.4
Corporate (33.6) (28.5)
------- -------
Underlying business performance 510.3 455.5
Change in fair value of investment properties 2,693.6 986.2
------- -------
3,203.9 1,441.7
------- -------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2017 2016
US$m US$m
By business
Investment Properties
- operating profit 70.9 76.4
- net financing charges (17.8) (21.0)
- tax (8.7) (8.9)
- net profit 44.4 46.5
Development Properties
- operating profit 195.6 25.5
- net financing charges 3.7 1.6
- tax (105.3) (10.5)
- non-controlling interests (3.1) (3.5)
- net profit 90.9 13.1
------- -------
Underlying business performance 135.3 59.6
Change in fair value of investment properties
(net of deferred tax) (76.4) (120.9)
58.9 (61.3)
------- -------
6. TAX
Six months ended 30th June
2017 2016
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (87.7) (90.3)
Deferred tax
- changes in fair value of investment
properties 0.1 1.0
- other temporary differences (3.8) 1.3
------ ------
(91.4) (88.0)
------ ------
Tax relating to components of other comprehensive
income is analysed as follows:
Cash flow hedges 5.4 (5.7)
------ ------
Tax on profits has been calculated at the rates of taxation
prevailing in the territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$90.3
million (2016: US$8.8 million) is included in share of results of
associates and joint ventures.
7. EARNINGS PER SHARE
Earnings per share are calculated on profit attributable to
shareholders of US$3,125.3 million (2016: US$1,263.4 million) and
on the weighted average number of 2,352.8 million (2016: 2,352.8
million) shares in issue during the period.
Earnings per share are additionally calculated based on
underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
Six months ended 30th June
2017 2016
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to shareholders 517.4 21.99 392.8 16.70
Non-trading items (note 8) 2,607.9 870.6
Profit attributable to shareholders 3,125.3 132.83 1,263.4 53.70
------- -------
8. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties; gains and losses arising
from the sale of businesses, investments and investment properties;
impairment of non-depreciable intangible assets and other
investments; provisions for the closure of businesses;
acquisition-related costs in business combinations; and other
credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying
business performance.
An analysis of non-trading items is set out below:
Six months ended 30th June
2017 2016
US$m US$m
Change in fair value of investment properties 2,693.6 986.2
Deferred tax on change in fair value of investment
properties 0.1 1.0
Share of change in fair value of investment
properties of
associates and joint ventures (net of deferred
tax) (76.4) (120.9)
Non-controlling interests (9.4) 4.3
2,607.9 870.6
------- -------
9. DIVIDS
Six months ended 30th June
2017 2016
US$m US$m
Final dividend in respect of 2016 of USc13.00
(2015: USc13.00) per share 305.8 305.8
----- -----
An interim dividend in respect of 2017 of USc6.00 (2016:
USc6.00) per share amounting to a total of US$141.2 million (2016:
US$141.2 million) is declared by the Board and will be accounted
for as an appropriation of revenue reserves in the year ending 31st
December 2017.
10. INVESTMENT PROPERTIES
Year ended
31st
Six months ended 30th June December
2017 2016 2016
US$m US$m US$m
Net book value at beginning of period 27,712.3 24,957.3 24,957.3
Exchange differences (127.1) (12.4) (71.0)
Additions 81.2 148.3 276.1
Increase in fair value 2,693.6 986.2 2,549.9
----------
Net book value at end of period 30,360.0 26,079.4 27,712.3
-------- -------- ----------
11. BORROWINGS
At 30th June At 31st December
2017 2016 2016
US$m US$m US$m
Current
Bank overdrafts 10.5 1.8 10.5
Current portion of long-term
borrowings
* bank loans 317.3 17.0 175.1
* medium term notes due 2017 36.6 - 35.1
364.4 18.8 220.7
Long-term
Bank loans 557.9 919.8 838.0
Medium term notes
- due 2017 - 37.8 -
- due 2019 102.4 103.0 103.1
- due 2020 304.1 309.0 299.6
- due 2021 68.0 71.0 66.8
- due 2022 608.5 623.7 605.1
- due 2023 178.3 179.3 179.5
- due 2024 406.2 420.9 405.5
- due 2025 650.9 652.5 651.8
- due 2026 38.4 38.6 38.6
- due 2027 185.0 186.0 186.1
- due 2028 79.2 79.7 79.7
- due 2029 50.6 50.8 50.9
- due 2030 102.5 103.1 103.2
- due 2031 25.3 25.4 25.4
- due 2032 30.2 30.3 30.3
- due 2040 31.9 32.1 32.1
2,861.5 2,943.2 2,857.7
3,419.4 3,863.0 3,695.7
------- ------- ----------------
3,783.8 3,881.8 3,916.4
------- ------- ----------------
12. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities,
together with carrying amounts at 30th June 2017 and 31st December
2016 are as follows:
Other
financial
Other instruments
financial at fair
instruments value
Derivatives at through Total
Loans and used for Available- amortised profit carrying Fair
receivables hedging for-sale cost and loss amount value
US$m US$m US$m US$m US$m US$m US$m
30th June 2017
Assets
Other investments - - 88.4 - - 88.4 88.4
Debtors 305.2 20.2 - - 11.9 337.3 337.3
Bank balances 1,902.0 - - - - 1,902.0 1,902.0
------- ----------- ---------- ----------- ----------- ---------- ---------
2,207.2 20.2 88.4 - 11.9 2,327.7 2,327.7
------- -----------
Liabilities
Borrowings - - - (3,783.8) - (3,783.8) (3,923.9)
Creditors
excluding
non-financial
liabilities - (11.0) - (494.8) - (505.8) (505.8)
----------- ---------- ----------- ---------- ---------
- (11.0) - (4,278.6) - (4,289.6) (4,429.7)
------- ----------- ---------- ----------- --------- ---------
31st December
2016
Assets
Other investments - - 52.2 - - 52.2 52.2
Debtors 276.3 44.5 - - 11.8 332.6 332.6
Bank balances 1,908.9 - - - - 1,908.9 1,908.9
------- ----------- ---------- ----------- ----------- --------- ---------
2,185.2 44.5 52.2 - 11.8 2,293.7 2,293.7
------- -----------
Liabilities
Borrowings - - - (3,916.4) - (3,916.4) (3,988.3)
Creditors
excluding
non-financial
liabilities - (7.6) - (533.3) - (540.9) (540.9)
------- ----------- ---------- ----------- ----------- --------- ---------
- (7.6) - (4,449.7) - (4,457.3) (4,529.2)
------- ----------- ---------- ----------- ----------- --------- ---------
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the
balance sheet, the corresponding fair value measurements are
disclosed by level of the following fair value measurement
hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical
assets or liabilities ('quoted prices in active markets')
The fair value of listed securities, which are classified as
available-for-sale, is based on quoted prices in active markets at
the balance sheet date. The quoted market price used for listed
investments held by the Group is the current bid price.
(b) Inputs other than quoted prices in active markets that are
observable for the asset or liability, either directly or
indirectly ('observable current market transactions')
The fair values of derivative financial instruments are
determined using rates quoted by the Group's bankers at the balance
sheet date. The rates for interest rate swaps and forward foreign
exchange contracts are calculated by reference to market interest
rates and foreign exchange rates.
There were no changes in valuation techniques during the six
months ended 30th June 2017 and the year ended 31st December
2016.
The table below analyses financial instruments carried at fair
value at 30th June 2017 and 31st December 2016, by the levels in
the fair value measurement hierarchy:
Quoted prices Observable
in active current
markets market transactions Total
US$m US$m US$m
30th June 2017
Assets
Available-for-sale financial assets
- listed securities 88.4 - 88.4
Derivative designated at fair value
- through other comprehensive income - 3.2 3.2
- through profit and loss - 17.0 17.0
------------- -------------------- ------
88.4 20.2 108.6
------------- -------------------- ------
Liabilities
Derivative designated at fair value
- through other comprehensive income - (7.2) (7.2)
- through profit and loss - (3.8) (3.8)
------------- -------------------- ------
- (11.0) (11.0)
31st December 2016
Assets
Available-for-sale financial assets
- listed securities 52.2 - 52.2
Derivative designated at fair value
- through other comprehensive income - 28.0 28.0
- through profit and loss - 16.5 16.5
------------- -------------------- ------
52.2 44.5 96.7
------------- -------------------- ------
Liabilities
Derivative designated at fair value
- through profit and loss - (7.6) (7.6)
------------- -------------------- ------
There were no transfers among the two categories during the six
months ended 30th June 2017 and the year ended 31st December
2016.
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances, current
creditors and current borrowings are assumed to approximate their
carrying amounts due to the short-term maturities of these assets
and liabilities.
The fair values of long-term borrowings are based on market
prices or are estimated using the expected future payments
discounted at market interest rates.
13. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2017 and 31st December
2016 amounted to US$819.2 million and US$623.0 million,
respectively.
Various Group companies are involved in litigation arising in
the ordinary course of their respective businesses. Having reviewed
outstanding claims and taking into account legal advice received,
the Directors are of the opinion that adequate provisions have been
made in the condensed financial statements.
14. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Holdings
Limited and the ultimate holding company is Jardine Matheson
Holdings Limited ('JMH'). Both companies are incorporated in
Bermuda.
In the normal course of business, the Group has entered into a
variety of transactions with the subsidiaries, associates and joint
ventures of JMH ('Jardine Matheson group members'). The more
significant of these transactions are described below:
Management fee
The management fee payable by the Group, under an agreement
entered into in 1995, to Jardine Matheson Limited ('JML') in 2017
was US$2.6 million (2016: US$2.0 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 in 2017 amounted to US$10.3 million
(2016: US$10.0 million).
The Group provided consultancy services to Jardine Matheson
group members in 2017 amounting to US$0.2 million (2016: US$0.2
million).
Jardine Matheson group members provided property maintenance and
other services to the Group in 2017 in aggregate amounting to
US$22.2 million (2016: US$20.0 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group in 2017 amounting to US$1.2 million (2016:
US$1.1 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint
ventures are included in debtors and creditors as appropriate. The
amounts are not material.
Hongkong Land Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The following have been identified previously as
the areas of principal risk and uncertainty facing the Company, and
they remain unchanged:
-- Economic Risk and Financial Risk
-- Commercial Risk
-- Regulatory and Political Risk
-- Terrorism, Pandemic and Natural Disasters
For greater detail, please refer to page 74 of the Company's
Annual Report for 2016, a copy of which is available on the
Company's website www.hkland.com.
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
(a) the condensed financial statements have been prepared in
accordance with IAS 34; and
(b) the interim management report includes a fair review of all
information required to be disclosed by the Disclosure Guidance and
Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct
Authority in the United Kingdom.
For and on behalf of the Board
Robert Wong
Simon Dixon
Directors
The interim dividend of USc6.00 per share will be payable
on 19th October 2017 to shareholders on the register of members
at the close of business on 25th August 2017. The shares will
be quoted ex-dividend on the Singapore Exchange and the London
Stock Exchange on 23rd and 24th August 2017, respectively.
The share registers will be closed from 28th August to 1st
September 2017, inclusive.
Shareholders will receive their cash dividends in United States
dollars, unless they are registered on the Jersey branch register
where they will have the option to elect for sterling. These
shareholders may make new currency elections for the 2017
interim dividend by notifying the United Kingdom transfer
agent in writing by 29th September 2017. The sterling equivalent
of dividends declared in United States dollars will be calculated
by reference to a rate prevailing on 4th October 2017.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in sterling only
as calculated above. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore
will receive their cash dividends in United States dollars
unless they elect, through CDP, to receive Singapore dollars.
Shareholders on the Singapore branch register who wish to
deposit their shares into the CDP system by the dividend record
date, being 25th August 2017, must submit the relevant documents
to M & C Services Private Limited, the Singapore branch registrar,
no later than 5.00 p.m. (local time) on 24th August 2017.
Hongkong Land Group
Hongkong Land is a listed leading property investment,
management and development group. Founded in 1889, Hongkong Land's
business is built on excellence, integrity and partnership.
The Group owns and manages almost 800,000 sq. m. of prime office
and luxury retail property in key Asian cities, principally in Hong
Kong and Singapore. Hongkong Land's properties attract the world's
foremost companies and luxury brands.
Its Hong Kong Central portfolio represents some 450,000 sq. m.
of prime property. It has a further 165,000 sq. m. of prestigious
office space in Singapore mainly held through joint ventures, and a
50% interest in a leading office complex in Central Jakarta. The
Group also has a number of high quality residential and mixed-use
projects under development in cities across Greater China and
Southeast Asia, including a luxury retail centre at Wangfujing in
Beijing. In Singapore, its subsidiary, MCL Land, is a
well-established residential developer.
Hongkong Land Holdings Limited is incorporated in Bermuda and
has a standard listing on the London Stock Exchange, with secondary
listings in Bermuda and Singapore. The Group's assets and
investments are managed from Hong Kong by Hongkong Land Limited.
Hongkong Land is a member of the Jardine Matheson Group.
- end -
For further information, please contact:
Hongkong Land Limited
Robert Wong (852) 2842 8428
Simon Dixon (852) 2842 8101
Brunswick Group Limited
Marie Filotti (852) 3512 5059
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-Yearly
Results announcement to shareholders. The Half-Yearly Results
announcement will remain available on the Company's website,
www.hkland.com, together with other Group announcements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGURWRUPMPWG
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