Hongkong Land reports 8% rise in H1 underlying net profit

HONGKONG Land on Thursday (Jul 28) reported an 8 per cent rise in 1H 2022 underlying net profit to US$425 million from US$394 million a year ago.

The property company also reversed into the black, with H1 earnings of US$292 million, compared to a loss of US$865 million a year ago. Hongkong Land directors have declared an interim dividend of US$0.06 per share.

Revenue for the first half rose slightly by 0.9 per cent to US$894 million from US$885.8 million. Rental income for the period dipped 3 per cent from US$469.8 million to US$455.6 million on negative rental reversion from portfolio properties in Hong Kong. Average office rents dropped to HK$112 per sq ft in the first half of 2022, from HK$115 per sq ft in 2H 2021.

Footfall and tenant sales at Hongkong Land’s retail operation in Beijing and Macau were also negatively affected by pandemic-related restrictions. In Singapore, the property company’s office portfolio saw average office rents increasing to S$10.50 per sq ft in 1H 2022, from S$10.30 per sq ft in 2H 2021.

Hongkong Land reported more sales completion in H1, but pandemic-related lockdowns impacted construction progress at a mixed-use Galaxy Midtown project in Shanghai. This might delay anticipated sales completions from end-2022 to early-2023.

Weaker market sentiment in the majority of the cities the property company has a presence in has resulted in a fall in sales contracts. Attributable interest in contracted sales for H1 was US$419 million, compared to US$1.3 billion in 2H 2021.

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Residential development activities in Singapore declined due to slower completion progress on projects. Nevertheless, attributable interest in contracted sales for H1 in Singapore was US$270 million, compared to US$156 million in 2H 2021.

“The Group’s full-year underlying profits are expected to be significantly lower than the prior year. This is primarily due to the planned timing of sales completions and the impact of pandemic-related restrictions on construction activities on the Chinese mainland, which will result in some completions being deferred from the second half of 2022 into 2023,” said Ben Keswick, chairman, Jardine Matheson.