PROPERTY developer Hongkong Land on Thursday (Aug 1) posted an underlying loss of US$7 million for the six months ended Jun 30, compared with an underlying net profit of US$422 million in the corresponding year-ago period.
This was attributed to a non-cash provision of US$295 million in the carrying value of some projects in its China development properties, said the group in a bourse filing.
Excluding the impact of the provision, underlying profit was US$288 million, down 32 per cent from the same period the year before, said Hongkong Land.
The group uses underlying profit in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as its management considers this to be a key measure that provides additional information on the group’s underlying business performance.
The board is recommending an interim dividend of US$0.06 per share, unchanged from the same period a year ago.
Revenue for the first half was US$972.4 million, up 45.1 per cent from US$670.3 million, year on year.
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Net loss attributable to shareholders for the period widened to US$833 million, from a loss of US$333 million in H1 FY2023.
This figure reflected unrealised net non-cash losses arising primarily from revaluations of its investment properties portfolio of US$826 million in H1 FY2024 and US$755 million in H1 FY2023, said the group.
“The 2024 net revaluation loss is principally attributable to the Hong Kong office portfolio, following a modest decrease in market rents,” it added. The loss was partially offset by a valuation gain for the Hong Kong retail portfolio driven by expected rental uplifts resulting from an investment in Hong Kong shopping mall Landmark.
The underlying loss per share for H1 FY2024 was US$0.0031, from an underlying earnings per share of US$0.1902 in H1 FY2023.
Loss per share for the first half was US$0.3775, compared with a loss per share of US$0.15 in the corresponding year-ago period.
As at Jun 30, the group had undrawn committed facilities and cash of US$3 billion, with an average debt tenor of 6.2 years.
Commenting on the results, chief executive Michael Smith said: “Contributions from the investment properties (portfolio) were stable, despite market headwinds. Excluding provisions, development properties’ contributions were lower than the first half of FY2023 due to the phasing of project completions.”
The group noted that it is undergoing a comprehensive strategic review of its overall business strategy and commercial properties, which is expected to be completed before end-2024. The group will present a strategy update after its completion.
Shares of Hongkong Land rose 0.3 per cent or US$0.01 to US$3.24 on Thursday, before the announcement.
