TIDMHKLD TIDMJAR
RNS Number : 0551U
Hongkong Land Hldgs Ltd
28 July 2022
Announcement
28th July 2022
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-YEAR RESULTS FOR THE SIX MONTHSED 30TH JUNE 2022
Highlights
-- Underlying profit up 8%
-- Higher profits from Development Properties
-- Investment Properties profits marginally lower
-- Group's financial position remains strong
-- Additional US$500 million share buyback announced
"Resilient financial performance at Hongkong Land in the first
half of 2022 was pleasing to see, although contracted sales of
China Development Properties were affected by weak market
sentiment. The Group's full-year underlying profits are expected to
be significantly lower than the prior year. This is primarily due
to the planned timing of sales completions and the impact of
pandemic-related restrictions on construction activities on the
Chinese mainland, which will result in some completions being
deferred from the second half of 2022 into 2023."
Ben Keswick
Chairman
Results
(unaudited)
Six months ended 30th June
2022 2021 Change
US$m US$m %
----------------------------------------------- ------ ------- ------
Underlying profit attributable to
shareholders(#) 425 394 +8
Profit/(loss) attributable to shareholders 292 (865) n/m
Shareholders' funds 33,619 34,584* -3
Net debt 6,062 5,104* +19
----------------------------------------------- ------ ------- ------
USc USc %
----------------------------------------------- ------ ------- ------
Underlying earnings per share(#) 18.67 16.90 +10
Earnings/(loss) per share 12.83 (37.06) n/m
Interim dividend per share 6.00 6.00 -
----------------------------------------------- ------ ------- ------
US$ US$ %
----------------------------------------------- ------ ------- ------
Net asset value per share 14.99 15.05* -
----------------------------------------------- ------ ------- ------
# 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 7 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 2021.
The interim dividend of USc6.00 per share will be payable on
12th October 2022 to shareholders on the register of members at the
close of business on 19th August 2022.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEAR RESULTS FOR THE SIX MONTHSED 30TH JUNE 2022
OVERVIEW
Anti-pandemic measures taken across China led to subdued
consumer demand in the Group's retail and residential properties
businesses in the period, although the impact on underlying profit
in the first half of the year was modest. Profits from the Group's
Investment Properties business were marginally lower than the same
period last year, while a greater number of residential sales
completions in China resulted in a higher contribution from the
Development Properties business.
PERFORMANCE
Underlying profit attributable to shareholders was US$425
million, US$31 million higher than the prior year.
Profit attributable to shareholders was US$292 million in the
first half of 2022, compared to a loss of US$865 million in the
first half of 2021. This is after including losses mainly arising
from Investment Property revaluations of US$133 million in 2022 and
US$1,259 million in 2021.
The net asset value per share at 30th June 2022 was US$14.99,
compared with US$15.05 at the end of 2021.
The Directors are recommending an interim dividend of USc6.00
per share.
GROUP REVIEW
Investment Properties
In Hong Kong, anti-pandemic measures introduced in the early
part of the year impacted the number of new office leasing
enquiries and resulted in the Group providing rental support to a
select number of retail tenants. Despite these challenges, the
Group's Central office portfolio continued to benefit from a flight
to quality, as a number of new tenants committed to long-term
leases.
Physical vacancy was 5.4% at the end of June 2022, compared to
5.2% at the end of 2021 and, on a committed basis, it was 5.1%,
compared to 4.9% at the end of 2021. Rental reversions were
negative, reflecting lower market rents. Average office rents were
HK$112 per sq. ft. in the first half of 2022, compared to HK$118
per sq. ft. and HK$115 per sq. ft. in the first and second halves
of 2021, respectively.
Vacancy at the Group's LANDMARK retail portfolio was unchanged
from the end of 2021, although base rental reversions remained
negative. Tourism has not yet returned to Hong Kong, due to a
combination of travel and quarantine restrictions, adversely
impacting retail sales levels. Average retail rents were HK$168 per
sq. ft. in the first half of 2022, compared with HK$180 per sq. ft.
and HK$190 per sq. ft. in the first and second halves of 2021,
respectively. These average rents included the impact of temporary
rental support.
Footfall and tenant sales at the Group's retail operations in
Beijing and Macau were also negatively impacted by pandemic-related
restrictions, although a number of luxury brands opened new stores
as planned despite the market challenges.
In Shanghai, city-wide lockdowns saw development activities at
the multi-phase West Bund site suspended for over two months,
although construction has since resumed.
In Singapore, the Group's office portfolio continued to benefit
from healthy leasing momentum, with average office rents increasing
to S$10.5 per sq. ft. in the first half of 2022, compared to S$10.2
per sq. ft. and S$10.3 per sq. ft. in the first and second halves
of 2021, respectively. On a committed basis, vacancy in the Group's
office portfolio remained low at 3.0%, compared with 2.9% at the
end of 2021.
Development Properties
On the Chinese mainland, there were more sales completions in
the first half of 2022, resulting in higher profits than the same
period last year.
Pandemic-related shutdowns impacted construction progress at the
Group's mixed-use Galaxy Midtown project in Shanghai, possibly
delaying anticipated sales completions from the end of 2022 into
early 2023.
Market sentiment was weak in a majority of the cities where the
Group has a presence, impacting contracted sales despite the
continued relaxation of cooling measures. The Group's attributable
interest in contracted sales was US$419 million in the first half
of 2022, compared to US$1,360 million and US$1,288 million in the
first and second halves of 2021, respectively. At 30th June 2022,
the Group had US$2,425 million in sold but unrecognised contracted
sales, compared with US$2,853 million at the end of 2021.
Results from the Group's residential development activities in
Singapore declined compared to the first half of 2021, primarily
due to lower completion progress on projects. Pre-sales at the
407-unit Piccadilly Grand project commenced in May 2022 and it is
75% sold. The Group's attributable interest in contracted sales was
US$270 million in the first half of 2022, compared to US$172
million and US$156 million in the first and second halves of 2021,
respectively.
Sales demand for the Group's projects in the rest of Southeast
Asia was generally subdued.
Business Development
On the Chinese mainland, the Group secured a 34% interest in a
primarily residential site in Xuhui District in Shanghai, adjacent
to our 1.1 million sq. m. mixed-used project in West Bund. The site
has an attributable developable area of 18,700 sq. m. and will
feature six high-rise apartment blocks with over 470 premium
residential units.
In Singapore, the Group acquired a 49% interest in a residential
site in the Tanjong Katong area with a developable area of 599,000
sq. ft., which is expected to yield 638 units.
Financing
Net debt at 30th June 2022 was US$6.1 billion, up from US$5.1
billion at the end of 2021, primarily due to lower residential
pre-sale proceeds, investments in recently acquired development
sites and the buyback of Group shares.
Net gearing was 18%, compared with 15% at the end of last year.
As at 30th June 2022, the Group had committed liquidity of US$2.6
billion, compared to US$4.0 billion at the end of 2021, with an
average debt tenor of 6.4 years, compared to 6.5 years at the end
of 2021. 55% of the Group's interest rate on debt is at fixed
rates, with an average hedge tenor of 7.3 years.
In September 2021, the Group announced a US$500 million share
buyback programme, of which US$491 million had been invested up to
22nd July 2022, reducing issued share capital by 4%. An additional
US$500 million has been allocated to buy back shares until the end
of 2023.
OUTLOOK
Resilient financial performance at Hongkong Land in the first
half of 2022 was pleasing to see, although contracted sales of
China Development Properties were affected by weak market
sentiment. The Group's full-year underlying profits are expected to
be significantly lower than the prior year. This is primarily due
to the planned timing of sales completions and the impact of
pandemic-related restrictions on construction activities on the
Chinese mainland, which will result in some completions being
deferred from the second half of 2022 into 2023.
Ben Keswick
Chairman
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the six months ended 30th June 2022
--------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Six months ended 30th June Year ended 31st December
2022 2021 2021
Underlying Non- Underlying Non- Underlying Non-
business trading business trading business trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 894.0 - 894.0 885.8 - 885.8 2,384.3 - 2,384.3
Net operating costs (note
3) (499.9) - (499.9) (476.4) 0.5 (475.9) (1,440.9) 2.6 (1,438.3)
Change in fair value of
investment properties - (120.5) (120.5) - (1,248.8) (1,248.8) - (1,375.5) (1,375.5)
Operating profit/(loss)
(note 4) 394.1 (120.5) 273.6 409.4 (1,248.3) (838.9) 943.4 (1,372.9) (429.5)
Net financing charges
* financing charges (114.4) - (114.4) (106.9) - (106.9) (222.2) - (222.2)
* financing income 24.9 - 24.9 33.8 - 33.8 67.0 - 67.0
(89.5) - (89.5) (73.1) - (73.1) (155.2) - (155.2)
Share of results of
associates
and
joint ventures (note 5) 175.5 (21.4) 154.1 120.1 (4.4) 115.7 355.9 80.6 436.5
----------- ------- ------- ----------- --------- --------- ----------- --------- ---------
Profit/(loss) before tax 480.1 (141.9) 338.2 456.4 (1,252.7) (796.3) 1,144.1 (1,292.3) (148.2)
Tax (note 6) (55.8) 6.8 (49.0) (62.1) (4.8) (66.9) (178.7) (16.9) (195.6)
----------- ------- ------- ----------- --------- --------- ----------- --------- ---------
Profit/(loss) after tax 424.3 (135.1) 289.2 394.3 (1,257.5) (863.2) 965.4 (1,309.2) (343.8)
----------- ------- ------- ----------- --------- --------- ----------- --------- ---------
Attributable to:
Shareholders of the
Company
(note 7) 424.6 (132.8) 291.8 394.4 (1,259.3) (864.9) 966.0 (1,315.2) (349.2)
Non-controlling interests (0.3) (2.3) (2.6) (0.1) 1.8 1.7 (0.6) 6.0 5.4
----------- ------- ------- ----------- --------- --------- ----------- --------- ---------
424.3 (135.1) 289.2 394.3 (1,257.5) (863.2) 965.4 (1,309.2) (343.8)
----------- ------- ------- ----------- --------- --------- ----------- --------- ---------
USc USc USc USc USc USc
Earnings/(loss) per share
(note 8) 18.67 12.83 16.90 (37.06) 41.49 (15.00)
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
for the six months ended 30th June 2022
Year
(unaudited) ended
Six months ended 31st
30th June December
2022 2021 2021
US$m US$m US$m
Profit/(loss) for the period 289.2 (863.2) (343.8)
Other comprehensive income/
( expense)
Items that will not be reclassified
to
profit or loss:
Remeasurements of defined benefit
plans - - 3.3
Tax on items that will not
be reclassified - - (0.5)
- - 2.8
Items that may be reclassified
subsequently to profit or loss:
------- ------- --------
Net exchange translation differences
- net loss arising during the
period (259.6) (55.9) (148.1)
Cash flow hedges
* net gain/(loss) arising during the period 20.4 (7.5) (11.7)
- transfer to profit and loss (2.5) (0.2) (0.1)
17.9 (7.7) (11.8)
Tax relating to items that
may be
reclassified (3.0) 1.3 1.9
Share of other comprehensive
(expense)/
income of associates and joint
ventures (373.5) 5.8 87.1
(618.2) (56.5) (70.9)
Other comprehensive expense
for the
period, net of tax (618.2) (56.5) (68.1)
------- ------- --------
Total comprehensive expense
for the
period (329.0) (919.7) (411.9)
------- ------- --------
Attributable to:
Shareholders of the Company (322.7) (922.2) (419.4)
Non-controlling interests (6.3) 2.5 7.5
------- ------- --------
(329.0) (919.7) (411.9)
------------------------------------------------ ------- ------- --------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
as 30th June 2022
(unaudited) At 31st
At 30th June December
2022 2021 2021
US$m US$m US$m
Net operating assets
Fixed assets 118.6 126.0 127.8
Right-of-use assets 14.9 10.2 12.4
Investment properties (note
10) 28,278.1 28,814.7 28,600.2
Associates and joint ventures
(note 11) 9,574.0 8,990.6 9,515.3
Non-current debtors 34.6 29.9 29.7
Deferred tax assets 60.1 42.0 67.7
Pension assets 1.2 0.6 1.8
Non-current assets 38,081.5 38,014.0 38,354.9
Properties for sale 3,161.1 2,304.3 2,970.5
Current debtors 862.0 995.7 1,029.4
Current tax assets 41.4 34.5 28.3
Bank balances 746.7 2,352.9 1,479.5
--------- --------- ---------
Current assets 4,811.2 5,687.4 5,507.7
Current creditors (1,982.7) (2,241.8) (2,194.6)
Current borrowings (note 12) (366.6) (906.5) (865.3)
Current tax liabilities (208.9) (158.5) (202.9)
Current liabilities (2,558.2) (3,306.8) (3,262.8)
Net current assets 2,253.0 2,380.6 2,244.9
Long-term borrowings (note
12) (6,441.6) (5,708.7) (5,717.9)
Deferred tax liabilities (228.4) (204.0) (227.9)
Pension liabilities (0.1) (1.8) -
Non-current creditors (17.0) (35.6) (35.8)
--------- --------- ---------
33,647.4 34,444.5 34,618.2
--------- --------- ---------
Total equity
Share capital 224.3 233.4 229.8
Share premium - 257.3 67.4
Revenue and other reserves 33,395.0 33,922.8 34,286.6
--------- --------- ---------
Shareholders' funds 33,619.3 34,413.5 34,583.8
Non-controlling interests 28.1 31.0 34.4
--------- --------- ---------
33,647.4 34,444.5 34,618.2
--------- --------- ---------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
for the six months ended 30th June 2022
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 2022
(unaudited)
At 1st January
2022 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
Total
comprehensive
(expense)/income - - 291.8 23.9 (638.4) (322.7) (6.3) (329.0)
Dividends paid by
the Company (note
9) - - (364.5) - - (364.5) - (364.5)
Repurchase of
shares (5.5) (67.4) (204.4) - - (277.3) - (277.3)
------- ------- -------- -------- -------- ------------ ------------ --------
At 30th June 2022 224.3 - 33,745.3 3.7 (354.0) 33,619.3 28.1 33,647.4
------- ------- -------- -------- -------- ------------ ------------ --------
Six months ended
30th June 2021
(unaudited)
At 1st January
2021 233.4 257.3 34,881.2 (21.6) 358.8 35,709.1 29.4 35,738.5
Total
comprehensive
(expense)/income - - (864.9) (0.5) (56.8) (922.2) 2.5 (919.7)
Dividends paid by
the Company (note
9) - - (373.4) - - (373.4) (0.9) (374.3)
------- ------- -------- -------- -------- ------------ ------------ --------
At 30th June 2021 233.4 257.3 33,642.9 (22.1) 302.0 34,413.5 31.0 34,444.5
------- ------- -------- -------- -------- ------------ ------------ --------
Year ended 31st
December 2021
At 1st January
2021 233.4 257.3 34,881.2 (21.6) 358.8 35,709.1 29.4 35,738.5
Total
comprehensive
(expense)/income - - (346.4) 1.4 (74.4) (419.4) 7.5 (411.9)
Dividends paid by
the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid to
non-controlling
shareholders - - - - - - (0.9) (0.9)
Unclaimed
dividends
forfeited - - 1.0 - - 1.0 - 1.0
Disposal of
subsidiaries - - - - - - (1.6) (1.6)
Repurchase of
shares (3.6) (189.9) - - - (193.5) - (193.5)
At 31st December
2021 229.8 67.4 34,022.4 (20.2) 284.4 34,583.8 34.4 34,618.2
------- ------- -------- -------- -------- ------------ ------------ --------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the six months ended 30th June 2022
(unaudited)
Six months ended Year ended
30th June 31st December
2022 2021 2021
US$m US$m US$m
Operating activities
Operating profit/(loss) 273.6 (838.9) (429.5)
Depreciation and amortisation 8.9 7.7 16.3
Change in fair value of investment
properties 120.5 1,248.8 1,375.5
Gain on disposal of subsidiaries
and joint
ventures - - (37.6)
Increase in properties for sale (358.8) (353.7) (991.6)
Decrease in debtors 157.0 79.2 52.4
(Decrease)/increase in creditors (143.3) 708.3 633.3
Interest received 13.3 20.1 43.2
Interest and other financing charges
paid (105.0) (109.3) (215.8)
Tax paid (42.9) (79.3) (156.7)
Dividends from associates and joint
ventures 42.1 39.6 239.1
Cash flows from operating activities (34.6) 722.5 528.6
Investing activities
Major renovations expenditure (41.5) (50.1) (98.9)
Developments capital expenditure - (1.5) (1.5)
Investments in and advances to
associates
and joint ventures (310.6) (34.5) (397.1)
Proceeds received for disposal
of subsidiaries - - 5.7
Proceeds received for disposal
of joint ventures - - 59.6
Cash flows from investing activities (352.1) (86.1) (432.2)
Financing activities
Drawdown of borrowings 1,087.7 593.8 1,840.0
Repayment of borrowings (753.3) (505.1) (1,764.1)
P rincipal elements of lease payments (1.9) (1.4) (3.3)
Repurchase of shares (278.9) - (191.9)
Dividends paid by the Company (370.6) (369.4) (509.1)
Dividends paid to non-controlling
shareholders - (0.9) (0.9)
Cash flows from financing activities (317.0) (283.0) (629.3)
Net cash (outflow)/inflow (703.7) 353.4 (532.9)
Cash and cash equivalents at beginning
of period 1,476.1 1,990.4 1,990.4
Effect of exchange rate changes (30.2) 5.7 18.6
Cash and cash equivalents at end
of period 742.2 2,349.5 1,476.1
-------- ------- ------------
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' and 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 changes to the accounting policies as described in
the 2021 annual financial statements and the Group has not early
adopted any standard or amendments that have been issued but not
yet effective. The more important amendments applicable to the
Group is as follows:
Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a
Contract (effective from 1st January 2022)
The amendments clarifies that for the purpose of assessing
whether a contract is onerous, the cost of fulfilling the contract
includes both the incremental costs of fulfilling that contract and
an allocation of other costs that relate directly to fulfilling
contracts. The Group applied the amendment from 1st January 2022
and there is no significant impact on the Group's consolidated
financial statements.
2. REVENUE
Six months ended 30th June
2022 2021
US$m US$m
Rental income 455.6 469.8
Service income 92.2 83.3
Sales of properties
----- -----
- recognised at a point in time 235.4 46.0
- recognised over time 110.8 286.7
346.2 332.7
----- -----
894.0 885.8
----- -----
By business
Investment Properties 521.4 541.9
Development Properties 372.6 343.9
----- -----
894.0 885.8
----- -----
3. NET OPERATING COSTS
Six months ended 30th June
2022 2021
US$m US$m
Cost of sales (402.8) (383.9)
Other income 9.8 4.5
Administrative expenses (106.9) (97.0)
Asset impairment reversal - 0.5
-------
(499.9) (475.9)
------- -------
4. OPERATING PROFIT/( LOSS)
Six months ended 30th June
2022 2021
US$m US$m
By business
Investment Properties 412.8 431.7
Development Properties 25.9 21.2
Corporate (44.6) (43.5)
------- ---------
Underlying business performance 394.1 409.4
Change in fair value of investment properties (120.5) (1,248.8)
Asset impairment reversal - 0.5
------- ---------
273.6 (838.9)
------- ---------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2022 2021
US$m US$m
By business
Investment Properties
- operating profit 68.5 70.6
- net financing charges (17.6) (16.3)
- tax (8.7) (8.7)
- net profit 42.2 45.6
Development Properties
- operating profit 196.8 120.8
- net financing charges (4.6) (4.3)
- tax (57.8) (40.4)
- non-controlling interests (1.1) (1.6)
- net profit 133.3 74.5
------ ------
Underlying business performance 175.5 120.1
Change in fair value of investment properties
(net of deferred tax) (21.4) (4.4)
154.1 115.7
------ ------
6. TAX
Six months ended 30th June
2022 2021
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (40.5) (62.9)
Deferred tax
- changes in fair value of investment
properties 6.8 (4.8)
- other temporary differences (15.3) 0.8
------ ------
(49.0) (66.9)
------ ------
Tax relating to components of other comprehensive
income or expense is analysed as follows:
Cash flow hedges (3.0) 1.3
------ ------
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$65.2
million (2021: US$52.7 million) is included in share of results of
associates and joint ventures.
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties; gains and losses arising
from the sale of businesses and investment properties; impairment
of non-depreciable intangible assets; provisions for the closure of
businesses; acquisition-related costs in business combinations; and
other credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying
business performance.
An analysis of non-trading items after interest, tax and
non-controlling interests is set out below:
Six months ended 30th June
20 22 2021
US$m US$m
Change in fair value of investment properties (120.5) (1,248.8)
Deferred tax on change in fair value of investment
properties 6.8 (4.8)
Share of change in fair value of investment
properties of
associates and joint ventures (net of deferred
tax) (21.4) (4.4)
Asset impairment reversal - 0.5
Non-controlling interests 2.3 (1.8)
(132.8) (1,259.3)
------- -----------
8. EARNINGS/(LOSS) PER SHARE
Earnings per share are calculated on profit attributable to
shareholders of US$291.8 million (2021: loss of US$864.9 million)
and on the weighted average number of 2,274.0 million (2021: 2,3 33
. 9 million) shares in issue during the period.
Earnings per share are additionally calculated based on
underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
Six months ended 30th June
2022 2021
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to
shareholders 424.6 18.67 394.4 16.90
Non-trading items (note 7) (132.8) (1,259.3)
Profit/(loss) attributable
to shareholders 291.8 12.83 (864.9) (37.06)
------- ---------
9. DIVIDS
Six months ended 30th June
2022 2021
US$m US$m
Final dividend in respect of 2021 of USc 16
.00
(2020: USc16.00) per share 364.5 373.4
----- -----
An interim dividend in respect of 20 22 of USc 6 .00 (2021:
USc6.00) per share amounting to a total of US$134.6 million (2021:
US$140. 0 million) is declared by the Board and will be accounted
for as an appropriation of revenue reserves in the year ending 31st
December 20 22 .
10. INVESTMENT PROPERTIES
Year ended
31st
Six months ended 30th June December
2022 2021 2021
US$m US$m US$m
At beginning of period 28,600.2 30,083.3 30,083.3
Exchange differences (232.7) (45.9) (155.7)
Additions 31.1 26.1 56.4
Disposal of subsidiaries - - (8.3)
Decrease in fair value (120.5) (1,248.8) (1,375.5)
----------
At end of period 28,278.1 28,814.7 28,600.2
-------- --------- ----------
11. ASSOCIATES AND JOINT VENTURES
At 31st
At 30th June December
2022 2021 2021
US$m US$m US$m
By business
Investment Properties 4,870.3 4,907.3 5,025.9
Development Properties 4,703.7 4,083.3 4,489.4
----------
9,574.0 8,990.6 9,515.3
------- ------- ----------
12. BORROWINGS
At 30th June At 31st December
2022 2021 2021
US$m US$m US$m
Current
Bank overdrafts 4.5 3.4 3.4
Bank loans 117.8 62.4 86.0
Current portion of long-term
borrowings
* bank loans 179.9 218.9 155.5
* medium term notes 64.4 621.8 620.4
366.6 906.5 865.3
Long-term
Bank loans 2,630.5 2,339.5 1,882.2
Medium term notes
- due 2022 - 65.0 -
- due 2023 178.2 179.9 179.2
- due 2024 397.8 411.0 406.8
- due 2025 643.5 645.4 644.5
- due 2026 38.3 38.6 38.6
- due 2027 184.9 186.7 186.0
- due 2028 181.4 183.2 182.5
- due 2029 120.5 121.8 121.2
- due 2030 697.3 697.9 697.7
- due 2031 568.4 25.5 568.6
- due 2032 139.2 140.6 140.0
- due 2033 88.6 89.5 89.1
- due 203 4 76.6 77.4 77.1
- due 203 5 252.1 254.6 253.6
- due 2038 105.8 109.5 109.0
- due 203 9 106.8 110.5 109.9
- due 2040 31.7 32.1 31.9
3,811.1 3,369.2 3,835.7
6,441.6 5,708.7 5,717.9
------- ------- ----------------
6,808.2 6,615.2 6,583.2
------- ------- ----------------
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities,
together with carrying amounts at 30th June 2022 and 31st December
2021 are as follows:
Other
Financial financial
Fair value of assets liabilities Total
hedging at amortised at amortised carrying Fair
instruments costs costs amount value
US$m US$m US$m US$m US$m
30th June 2022
Financial assets measured
at fair value
Derivative financial instruments 23.1 - - 23.1 23.1
------ --------------
Financial assets not measured
at fair
value
Debtors - 253.9 - 253.9 253.9
Bank balances - 746.7 - 746.7 746.7
------ ------------- -------------- --------- ---------
- 1,000.6 - 1,000.6 1,000.6
------ ------------- -------------- --------- ---------
Financial liabilities measured
at fair
value
Derivative financial instruments (0.1) - - (0.1) (0.1)
------ --------------
Financial liabilities not
measured at
fair value
Borrowings - - (6,808.2) (6,808.2) (6,603.0)
Trade and other payable
excluding
non-financial liabilities - - (787.5) (787.5) (787.5)
------ ------------- -------------- --------- ---------
- - (7,595.7) (7,595.7) (7,390.5)
------ ------------- -------------- --------- ---------
31st December 2021
Financial assets measured
at fair value
Derivative financial instruments 22.4 - - 22.4 22.4
------ ---------
Financial assets not measured
at fair
value
Debtors - 247.2 - 247.2 247.2
Bank balances - 1,479.5 - 1,479.5 1,479.5
------ ------- --------- --------- -----------
- 1,726.7 - 1,726.7 1,726.7
------ ------- --------- --------- -----------
Financial liabilities measured
at fair
value
Derivative financial instruments (17.6) - - (17.6) (17.6)
------ ------- --------- --------- -----------
Financial liabilities not
measured at
fair value
Borrowings - - (6,583.2) (6,583.2) (6,810.0)
Trade and other payable
excluding
non-financial liabilities - - (948.2) (948.2) (948.2)
------ ------- --------- --------- -----------
- - (7,531.4) (7,531.4) (7,758.2)
------ ------- --------- --------- -----------
Fair value estimation
(a) Financial instruments that are measured at fair value based
on observable current market transactions
At 31st
At 30th December
June 2022 2021
US$m US$m
Assets
Derivative designated at fair
value
- through other comprehensive
income 22.1 9.9
- through profit and loss 1.0 12.5
----------- ---------
23.1 22.4
----------- ---------
Liabilities
Derivative designated at fair
value
- through other comprehensive
income (0.1) (17.6)
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 20 22 and the year ended 31st December
2021.
(b) Financial instruments that are not measured at fair
value
The fair values of current debtors, bank balances, current
creditors, current borrowings and current lease liabilities 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. The fair values of non-current
lease liabilities are estimated using the expected future payments
discounted at market interest rates.
14. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2022 and 31st December
2021 amounted to US$1,049.8 million and US$1,183.5 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.
15. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Limited
('JSL') and the ultimate parent company of the Group is Jardine
Matheson Holdings Limited ('JMH'). Both JMH and JSL 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 during the six months ended 30th
June 2022 are described below:
Management fee
The management fee payable by the Group, under an agreement
entered into in 1995, to Jardine Matheson Limited ('JML') was
US$2.1 million (2021: 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 amounted to US$8.4 million (2021:
US$9.5 million).
The Group provided project management services and property
management services to Jardine Matheson group members amounting to
US$1.3 million (2021: US$1.1 million).
Jardine Matheson group members provided property maintenance and
other services to the Group in aggregate amounting to US$26.2
million (2021: US$22.8 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group amounting to US$1.0 million (2021: US$1.2
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.
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
-- Commercial Risk
-- Financial and Treasury Risk
-- Regulatory and Political Risk
-- Key Contracts Risk
-- Pandemic, Terrorism and Natural Disasters Risk
-- Cybersecurity Risk
-- People Risk
-- Investment, Strategic Transactions and Partnerships Risk
-- Environmental and Climate Risk
For greater detail, please refer to pages 98 to 101 of the
Company's Annual Report for 2021, 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
Craig Beattie
Directors
Dividend Information for Shareholders
The interim dividend of USc6.00 per share will be payable on
12th October 2022 to shareholders on the register of members at the
close of business on 19th August 2022. The shares will be quoted
ex-dividend on 18th August 2022, and the share registers will be
closed from 22nd to 26th August 2022, inclusive.
Shareholders will receive their cash dividends in United States
Dollars, except when elections are made for alternate currencies in
the following circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register will have
the option to elect for their dividends to be paid in Sterling.
These shareholders may make new currency elections for the 2022
interim dividend by notifying the United Kingdom transfer agent in
writing by 23rd September 2022. The Sterling equivalent of
dividends declared in United States Dollars will be calculated by
reference to a rate prevailing on 28th September 2022.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in Sterling only as
calculated above.
Shareholders on the Singapore branch register who hold their
shares through T he Central Depository (Pte) Limited ('CDP')
Shareholders who are on CDP's Direct Crediting Service
('DCS')
Those shareholders who are on CDP's DCS will receive their cash
dividends in Singapore Dollars unless they opt out of CDP Currency
Conversion Service, through CDP, to receive United States
Dollars.
Shareholders who are not on CDP's DCS
Those shareholders who are not on CDP's DCS 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 19th August 2022, must submit the relevant documents to
M & C Services Private Limited, the Singapore branch registrar,
by no later than 5.00 p.m. (local time) on 18th August 2022.
About Hongkong Land Group
Hongkong Land is a major listed 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 more than 850,000 sq. m. of prime
office and luxury retail property in key Asian cities, principally
Hong Kong, Singapore, Beijing and Jakarta. Its properties attract
the world's foremost companies and luxury brands.
The Group's Central Hong Kong 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, four retail centres on the Chinese mainland, including a
luxury retail centre at Wangfujing in Beijing, and a 50% interest
in a leading office complex in Central Jakarta. The Group also has
a number of high-quality residential, commercial and mixed-use
projects under development in cities across China and Southeast
Asia, including a 43% interest in a 1.1 million sq. m. mixed-use
project in West Bund, Shanghai. Its subsidiary, MCL Land, is a
well-established residential developer in Singapore.
Hongkong Land Holdings Limited is incorporated in Bermuda and
has a primary 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
Mark Lam (852) 2842 8211
Gary Leung (852) 2842 8601
Brunswick Group Limited
Nan Dong (852) 9768 8379
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-Year
Results announcement for the six months ended 30th June 2022 to
shareholders. This Half-Year Results announcement will be made
available on the Company's website, www.hkland.com, together with
other Group announcements.
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END
IR DZGZNKRNGZZG
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