Hongkong Land narrows full-year loss, declares 16 US cents final dividend

HONGKONG Land, a member of the Jardine Matheson Group, narrowed its net loss to US$349.2 million for the year ended Dec 31, from US$2.6 billion a year ago.

The loss included net losses of US$1.3 billion primarily from lower valuations of the group's investment properties. The year before, full-year net loss included a US$3.6 billion reduction in property valuations.

Underlying profit, which excludes non-trading items, was mostly flat at US$966 million, compared with US$963 million a year ago.

Loss per share was 15 US cents, narrowing from US$1.1343.

A final dividend of 16 US cents per share has been proposed, bringing the total dividend for the year to 22 US cents per share, unchanged from a year ago. The final dividend will be paid on May 11.

Revenue increased 13.9 per cent to US$2.4 billion in FY 2021. Retail rental income increased during the year but was offset by lower office rents in Hong Kong. The group also noted that increased residential sales completions in China resulted in a higher contribution from the development properties business.

At the group's Hong Kong Central retail portfolio, modest recovery in consumer sentiment led to improved tenant sales. Average retail rents in 2021 increased to HK$190 (S$33) per square feet from HK$164 per sq ft in 2020, primarily due to reduced temporary rent relief provided to tenants, despite negative base rental reversions for the year.

At the Hong Kong Central office portfolio, physical vacancy fell to 5.2 per cent at end-2021 compared with 6.3 per cent at the end of 2020. On a committed basis it was 4.9 per cent compared with 5.9 per cent the year before.

Average office rents were HK$117 per sq ft in 2021, decreasing from HK$120 per sq ft rents however declined to a lesser extent than the broader market, the company said.

In China, the development properties contributed more profit year on year. The group's attributable interest in contracted sales in 2021 was US$2.6 billion, compared with US$2.1 billion in 2020.

In Singapore, development profits were largely unchanged. The group's attributable interest in contracted sales was US$328 million, compared with US$632 million in the prior year, which benefited from the sales launch of the Parc Esta project.

Hongkong Land said it is too early to assess the impact of the cooling measures introduced in late 2021, after a strong recovery in the residential market.

On its business development arm, the group said decreased competition in the primary land market in China presented an opportunity to replenish its land bank in its core markets. It acquired 8 residential sites in FY2021, with effective in these projects equating to a developable area of 977,000 square metres.

Net gearing for the group at the end of the year was 15 per cent, compared with 13 per cent at the end of 2020.

Hongkong Land had committed liquidity of US$4 billion as at end-2021, compared with US$4.3 billion at the end of 2020, with an average debt tenor of 6.5 years compared with 6.6 years as at end-2020.

In September, the Group announced a US$500 million share buyback programme, of which US$272 million had been invested up to 28th February 2022.

The counter ended at US$5.40, up US$0.04 or 0.75 per cent, on Thursday.