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Hongkong Land's full-year earnings drop 92%

HONGKONG Land Holdings reported a 92 per cent drop in net profit for the full year ended December 2019 to US$198 million from US$2.5 billion a year ago owing to net losses from lower valuations of the group’s investment properties versus net gains a year ago.

Underlying net profit jumped to a record US$1.08 billion from US$1.04 billion, said the company in its results announcement.

The group said profits from the investment properties businesses remained stable despite the social unrest in Hong Kong, while a higher contribution from the development properties business in mainland China was partially offset by lower contributions from other markets.

Hongkong Land, a member of the Jardine Matheson Group, said it made good progress over the year in acquisition of new sites and since then, also acquired a strategic large mixed-use investment property site in a prime location in Shanghai.

However, it added: “The performance of the group’s development properties business in the Chinese mainland and the impact of rent relief on the group’s retail properties, particularly in Hong Kong, will depend on the length and impact of the Covid-19 outbreak”.

Revenue for the year fell 13 per cent to US$2.32 billion from US$2.67 billion in 2018.

Earnings per share for the period under review came in at 8.48 US cents, down from US$1.05 a year ago. On an underlying basis, earnings per share improved 4 per cent to 46.12 US cents. 

The net asset value per share at end-December 2019 was US$16.39 versus US$16.43 at the end of 2018.

The company has recommended a final dividend of 16 US cents per share, unchanged from a year ago, which will be payable on May 13 2020, subject to approval at the annual general meeting to be held on May 6 with book closure date set for March 20.

That brings total dividend per share for 2019 to 22 US cents, unchanged from last year.

The company warned that its results for the current financial year will be impacted by the Covid-19 outbreak, and expects the performance of development properties in the Chinese mainland and the group’s retail properties to be most affected.

“The extent of the impact will be dependent on the duration and geographic extent of the outbreak,” said chairman Ben Keswick, adding that the group’s other businesses are expected to to have stable contributions, although financing costs could rise.

HongKong Land shares rose 6 US cents or 1.2 per cent to finish at US$5.05 on Thursday.