TIDMHKLD TIDMJDS TIDMJAR
RNS Number : 4943U
Hongkong Land Hldgs Ltd
29 July 2020
29th July 2020
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-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2020
Highlights
-- Underlying profit down 24% due to retail rent relief and fewer residential completions
-- Resilient performance from the Group's office portfolios
-- Net assets per share down 6% on lower capital values
-- Strategic partnership conditionally agreed for the West Bund project in Shanghai
-- Strong financial position with ample liquidity and an unchanged interim dividend
"While second half underlying profits are expected to benefit
from higher Development Properties completions on the Chinese
mainland than in the first half, uncertainty remains about the
duration of the pandemic and the effect it will have on the Group's
full year results."
Ben Keswick
Chairman
Results
(unaudited)
Six months ended 30th
June
2020 2019 Change
US$m US$m %
Underlying profit attributable to
shareholders(#) 353 466 -24
(Loss)/profit attributable to shareholders (1,828) 411 n/m
Shareholders' funds 35,965 38, 247* -6
Net debt 5,628 3, 591* + 57
USc USc %
Underlying earnings per share(#) 15.12 19.96 -24
Earnings per share (78.31) 17.61 n/m
Interim dividend per share 6.00 6.00 -
US$ US$ %
Net asset value per share 15.41 16. 39* -6
# 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 201 9
The interim dividend of USc6.00 per share will be payable on
14th October 2020 to shareholders on the register of members at the
close of business on 21st August 2020.
HONGKONG LAND HOLDINGS LIMITED
HALF-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2020
OVERVIEW
The Group's underlying profit in the period reflected a lower
contribution from Investment Properties due to the granting of
pandemic-related retail rent relief, and a lower contribution from
Development Properties as a result of fewer residential completions
taking place than in the corresponding period last year. Higher
profits are expected from Development Properties in the second half
of the year due to a greater number of completions on the Chinese
mainland, although some completions originally scheduled for 2020
will be delayed until 2021 as a result of construction delays
caused by the pandemic.
PERFORMANCE
Underlying profit attributable to shareholders during the first
half of the year was US$353 million, compared with US$466 million
in the equivalent period in 2019.
Including net non-cash losses of US$2,180 million arising on the
bi-annual revaluation of the Group's investment properties due to
lower open market rents, there was a loss attributable to
shareholders for the first half of the year of US$1,828 million.
This compares with a profit of US$411 million for the first half of
2019, which included net losses of US$55 million primarily arising
from investment property revaluations.
The net asset value per share at 30th June 2020 was US$15.41,
compared to US$16.39 at 31st December 2019.
The Directors have declared an unchanged interim dividend of
USc6.00 per share.
GROUP REVIEW
Investment Properties
The contribution from the Group's office portfolio in Hong Kong
remained resilient, despite subdued leasing activity. Vacancy was
5.0% at the end of June 2020, compared to 2.9% at the end of 2019,
and on a committed basis it was 4.5%, compared to 2.9% at the end
of 2019. Office rental reversions were mildly positive, with
average office rents of HK$121 per sq. ft in the first half of
2020. This compares to HK$116 per sq. ft and HK$119 per sq. ft in
the first and second halves of 2019, respectively.
The Group's Central retail portfolio was negatively impacted in
the first half by weak consumer sentiment and the various
anti-pandemic measures introduced by the Hong Kong government.
Vacancy of 0.4% on both a physical and committed basis is virtually
unchanged compared to 0.3% at the end of 2019. Base retail rental
reversions were mildly positive in the period, although temporary
rent relief and decreased turnover rent resulted in average retail
rents declining to HK$151 per sq. ft in the first half of 2020,
compared with HK$239 per sq. ft and HK$205 per sq. ft in the first
and second halves of 2019, respectively. Excluding temporary rent
relief, average retail rents in the first half of 2020 were HK$230
per sq. ft.
In Singapore, vacancy across the Group's office portfolio was
1.5% at the end of June 2020, compared with 5.0% at the end of
2019. On a committed basis, vacancy was 1.0%, compared to 0.7% at
the end of 2019. Average office rents increased to S$9.9 per sq. ft
in the first half of 2020, compared with S$9.6 per sq. ft and S$9.7
per sq. ft in the first and second halves of 2019, respectively.
Rental reversions remained positive in the first half of the
year.
In Beijing, footfall and tenant sales in WF CENTRAL declined
significantly due to the pandemic, and the Group as a result
provided rent relief in the period to support its retail
tenants.
In Shanghai, planning of the Group's prime mixed-use site along
the Huangpu River in the Xuhui District is underway, with
completion expected in multiple phases through to 2027. Since
securing the site and subject to relevant approvals by the
authorities, the Group has conditionally finalised agreements with
two strategic partners to jointly develop the site, receiving a
prepayment of US$2.3 billion in the first half with a further
amount received in July of US$320 million. The land premium and
related costs of US$4.5 billion were paid in the first half. Upon
completion of the transaction, which is expected by early 2021, the
project will be accounted for as a joint venture, with the Group
remaining as the largest shareholder.
In Bangkok, the planning of the Group's 49%-owned prime retail
and Grade A office development in the central business district
continues. The development is expected to complete in 2026.
Development Properties
On the Chinese mainland, as anticipated the profit contribution
from Development Properties in the first half of 2020 decreased
compared to the first half of 2019 due to fewer sales completions.
The Group's attributable interest in contracted sales in the first
half of 2020 was US$591 million, compared to US$643 million and
US$1,225 million in the first and second halves of 2019,
respectively. Market sentiment in the Group's core markets started
to recover in the second quarter following the temporary closure of
all sales galleries and the suspension of construction activities
for some two months in the first quarter as a result of the impact
of the pandemic. At 30th June 2020, the Group had US$2,183 million
in sold but unrecognised contracted sales, compared with US$1,860
million at the end of 2019.
The profit contribution from the Singapore business in the first
half of 2020 was lower than in the first half of 2019, as sales
galleries and construction activities were suspended for some two
months as a result of the pandemic. The 309-unit Margaret Ville is
92% pre-sold, whilst pre-sales at the 1,404-unit Parc Esta and the
638-unit Leedon Green projects have performed well under current
market conditions. The Group's attributable interest in contracted
sales was US$301 million in the first half of 2020, compared to
US$255 million and US$414 million in the first and second halves of
2019, respectively.
In the rest of Southeast Asia, construction activities at the
Group's projects have largely been suspended or curtailed since
April and market sentiment remains subdued.
Financing
The Group's financial position remains strong. Net debt
increased to US$5.6 billion at 30th June 2020 from US$3.6 billion
at the end of 2019, primarily due to land payments for the recently
acquired site in Shanghai. Net gearing was 16% compared with 9% at
the end of 2019. As at 30th June 2020, the Group had committed
liquidity of US$2.7 billion, compared to US$3.2 billion at the end
of 2019.
PEOPLE
On behalf of the Board, I would like to thank our staff for
their ongoing commitment, diligence and hard work in responding to
the unprecedented challenges brought about by the pandemic.
I stepped down as Managing Director on 15th June 2020, and was
succeeded by John Witt, who rejoins the Board. I will continue as
Chairman.
We are pleased to welcome Prijono Sugiarto to the Board as a
Non-executive Director with effect from 29th July 2020.
OUTLOOK
While second half underlying profits are expected to benefit
from higher Development Properties completions on the Chinese
mainland than in the first half, uncertainty remains about the
duration of the pandemic and the effect it will have on the Group's
full year results.
Ben Keswick
Chairman
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
(unaudited)
Six months ended 30th June Year ended 31st December
2020 2019 2019
Underlying Non- Underlying Non- Underlying Non-
business trading business trading business trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
2, 319
Revenue (note 2) 820.2 - 820.2 803.9 - 803.9 2,319.7 - . 7
Net operating costs (note (1, 114
3) (389.4) - (389.4) (334.0) 32. 5 (301.5) (1,149.3) 34.4 . 9 )
Change in fair value of
investment properties - (2,062.9) (2,062.9) - (74.4) (74.4) - (854.2) (854.2)
Operating (loss)/profit
(note 4) 430.8 (2,062.9) (1,632.1) 469.9 (41.9) 428.0 1,170.4 (819.8) 350.6
Net financing charges
( 100.0 ( 100.0
* financing charges (99.5) - (99.5) ) - ) (204.8) - (204.8)
* financing income 36.3 - 36.3 40.6 - 40.6 83.4 - 83.4
(63.2) - (63.2) (59.4) - (59.4) (121.4) - (121.4)
Share of results of
associates
and
joint ventures (note 5) 45.2 (134.5) (89.3) 127.2 (9.9) 117.3 272.7 (32.6) 240.1
----------- --------- --------- ----------- ------- ------- ------------ -------- -------
Profit/(loss) before tax 412.8 (2,197.4) (1,784.6) 537.7 (51.8) 485.9 1,321.7 (852.4) 469.3
Tax (note 6) (61.7) 12.3 (49.4) (72.2) (2.4) (74.6) (246.6) (20.5) (267.1)
----------- --------- --------- ----------- ------- ------- ------------ -------- -------
Profit/(loss) after tax 351.1 (2,185.1) (1,834.0) 465.5 (54.2) 411.3 1,075.1 (872.9) 202.2
----------- --------- --------- ----------- ------- ------- ------------ -------- -------
Attributable to:
Shareholders of the
Company
(note 7 and 8) 352.8 (2,180.4) (1,827.6) 465.9 (55.0) 410.9 1,076.4 (878.4) 198.0
Non-controlling interests (1.7) (4.7) (6.4) (0.4) 0.8 0.4 (1.3) 5.5 4.2
----------- --------- --------- ----------- ------- ------- ------------ -------- -------
351.1 (2,185.1) (1,834.0) 465.5 (54.2) 411.3 1,075.1 (872.9) 202.2
----------- --------- --------- ----------- ------- ------- ------------ -------- -------
USc USc USc USc USc USc
Earnings per share (note
8) 15.12 (78.31) 19.96 17.61 46.12 8.48
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
(unaudited) Year ended
Six months ended 31st
30th June December
2020 2019 2019
US$m US$m US$m
(1, 8
(Loss)/p rofit for the period 34.0) 411.3 202.2
Other comprehensive ( expense)/income
Items that will not be reclassified
to
profit or loss:
Remeasurements of defined benefit
plans - - 2.2
Tax on items that will not
be reclassified - - (0.4)
- - 1.8
Items that may be reclassified
subsequently to profit or loss:
--------- ----- --------
Net exchange translation differences
- net gain arising during the
period 42.4 88.6 166.3
Cash flow hedges
* net gain arising during the period 3.7 13.8 25.7
- transfer to profit and loss (0.8) (1.5) (0.6)
2.9 12.3 25.1
Tax relating to items that
may be
reclassified (0.5) (2.0) (4.1)
Share of other comprehensive
(expense)/income of associates
and
joint ventures (127.4) 22.7 29.5
(82.6) 121.6 216.8
Other comprehensive (expense)/income
for the period, net of tax (82.6) 121.6 218.6
--------- ----- --------
Total comprehensive (expense)/income
for the period (1,916.6) 532.9 420.8
--------- ----- --------
Attributable to:
Shareholders of the Company (1,908.8) 532.6 418.0
Non-controlling interests (7.8) 0.3 2.8
--------- ----- --------
(1,916.6) 532.9 420.8
----------------------------------------- --------- ----- --------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2020 2019 2019
US$m US$m US$m
Net operating assets
Fixed assets 121.9 131.3 127.6
Right-of-use assets 11.2 13.9 12.4
Investment properties (note 10) 35,835.7 33,815.4 33,191.2
Associates and joint ventures
(note 11) 6,839.9 7,152.5 7,226.1
Other investments - 114.5 -
Non-current debtors 60.9 39.9 48.1
Deferred tax assets 16.0 18.6 26.9
Pension assets 0.1 - 0.1
Non-current assets 42,885.7 41,286.1 40,632.4
Properties for sale 1,975.9 2,065.8 2,042.0
Current debtors 847.9 985.0 1,141.3
Current tax assets 31.7 25.9 19.5
Bank balances 927.6 1,153.9 1,424.0
--------- --------- ---------
Current assets 3,783.1 4,230.6 4,626.8
--------- --------- ---------
(3,7 40
Current creditors . 9 ) (1,640.0) (1,460.8)
Current borrowings (note 12) (362.8) (705.4) (715.3)
Current tax liabilities (158.1) (119.9) (261.0)
--------- --------- ---------
Current liabilities (4,261.8) (2,465.3) (2,437.1)
--------- --------- ---------
Net current ( liabilities)/ assets (478.7) 1,765.3 2,189.7
Long-term borrowings (note 12) (6,192.9) (4,329.0) (4,299.9)
Deferred tax liabilities (202.1) (176.8) (210.9)
Pension liabilities (2.2) (3.9) (1.5)
Non-current creditors (23.5) (12.7) (20.0)
--------- --------- ---------
35,986.3 38,529.0 38,289.8
--------- --------- ---------
Total equity
Share capital 233.4 233.4 233.4
Share premium 257.3 2 5 7.3 257.3
Revenue and other reserves 35,473.9 38,010.0 37,756.1
--------- --------- ---------
Shareholders' funds 35,964.6 38,500.7 38,246.8
Non-controlling interests 21.7 28.3 43.0
--------- --------- ---------
35,986.3 38,529.0 38,289.8
--------- --------- ---------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
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 2020
(unaudited)
At 1st January
2020 233.4 257.3 38,039.8 8.3 (292.0) 38,246.8 43.0 38,289.8
Total
comprehensive
income - - (1,827.6) (8.4) (72.8) (1,908.8) (7.8) (1,916.6)
Dividends paid by
the Company
(note
9) - - (373.4) - - (373.4) (0.5) (373.9)
Disposal of a
subsidiary - - - - - - (13.0) (13.0)
------- ------- --------- -------- -------- ------------ ------------ ---------
At 30th June 2020 233.4 257.3 35,838.8 (0.1) (364.8) 35,964.6 21.7 35,986.3
------- ------- --------- -------- -------- ------------ ------------ ---------
Six months ended
30th June 2019
(unaudited)
At 1st January
2019 233.4 257.3 38,352.7 (8.8) (493.1) 38,341.5 28.0 38,369.5
Total
comprehensive
income - - 410.9 9.5 112.2 532.6 0.3 532.9
Dividends paid by
the Company
(note
9) - - (3 7 3.4) - - (373.4) - (373.4)
------- ------- --------- -------- -------- ------------ ------------ ---------
At 30th June 2019 233.4 257.3 38,390.2 0.7 (380.9) 38,500.7 28.3 38,529.0
------- ------- --------- -------- -------- ------------ ------------ ---------
Year ended 31st
December 2019
At 1st January
2019 233.4 257.3 38,352.7 (8.8) (493.1) 38,341.5 28.0 38,369.5
Total
comprehensive
income - - 199.8 17.1 201.1 418.0 2.8 420.8
Dividends paid by
the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid to
non-controlling
shareholders - - - - - - (0.9) (0.9)
Unclaimed
dividends
forfeited - - 0.7 - - 0.7 - 0.7
A cquisition of a
subsidiary - - - - - - 13.1 13.1
At 31st December
2019 233.4 257.3 38,039.8 8.3 (292.0) 38,246.8 43.0 38,289.8
------- ------- --------- -------- -------- ------------ ------------ ---------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
(unaudited)
Six months ended Year ended
30th June 31st December
2020 2019 2019
US$m US$m US$m
Operating activities
Operating (loss)/profit (1,632.1) 428.0 350.6
Depreciation and amortisation 7.4 6.5 13.6
Change in fair value of
investment
properties 2,062.9 74.4 854.2
Gain on disposal of a
subsidiary (6.2) - -
Gain on disposal/change in
fair value
of other
investments - (32.5) (34.4)
I ncrease in properties
for sale (51.4) (98.6) (1.1)
Decrease/(increase) in
debtors 206.2 (52.0) (186.7)
1 29 .
Increase in creditors 9 216.1 26.7
Interest received 20.1 24.8 50.3
Interest and other
financing charges
paid (113.4) (95.8) (195.2)
Tax paid (153.7) (87.2) (115.5)
Dividends from
associates and joint
ventures 36.3 54.1 419.6
Cash flows from
operating activities 506.0 437.8 1,182.1
Investing activities
Major renovations
expenditure (59.1) (49.8) (116.4)
Developments capital
expenditure
(note 14) (4,488.0) (16.5) (27.3)
Repayment
from/(investments in
and
advances to)
associates and joint
ventures 96.7 (328.4) (646.0)
Disposal/(acquisition)
of a subsidiary 47.7 - (25.8)
Proceeds on disposal of
other investments - 38.8 157.5
Advance received on
conditional
disposal of
a subsidiary (note 14) 2,252.0 - -
Cash flows from
investing activities (2,150.7) (355.9) (658 .0)
Financing activities
Drawdown of borrowings 2,481.7 626.0 1,334.5
(57 0
Repayment of borrowings (925.6) . 6 ) (1,309.2)
P rincipal elements of
lease payments (2.1) (2.2) (5.1)
Dividends paid by the
Company (367.1) (369.2) (510.1)
Dividends paid to
non-controlling
shareholders (0.1) - (0.9)
Cash flows from financing (316.
activities 1,186.8 0 ) (490.8)
(234.
Net cash (outflow)/inflow (457.9) 1 ) 33.3
Cash and cash equivalents
at beginning
of
period 1,418.0 1,368.9 1,368.9
Effect of exchange rate
changes (35.1) 14.2 15.8
Cash and cash equivalents
at end
of period 925.0 1,149.0 1,418.0
------------------ ------- --------------
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.
The Group had early adopted the 'Interest Rate Benchmark Reform:
Amendments to IFRS 9, IAS 39 and IFRS 7' (effective 1st January
2020) for the Group's annual reporting period commencing 1st
January 2019.
There are no changes to the accounting policies as described in
the 2019 annual financial statements. Amendments which are
effective in 2020 and relevant to the Group's operations do not
have a significant effect on the Group's accounting policies. The
Group has not early adopted any other standard or amendments that
have been issued but not yet effective.
2. REVENUE
Six months ended 30th June
2020 2019
US$m US$m
Rental income 466.5 509.6
Service income 67.6 75.3
Sales of properties
----- -----
- recognised at a point in time 102.0 33.6
- recognised over time 184.1 185.4
286.1 219.0
----- -----
820.2 803.9
----- -----
By business
Investment Properties 530.3 581.2
Development Properties 289.9 222.7
----- -----
820.2 803.9
----- -----
3. NET OPERATING COSTS
Six months ended 30th June
2020 2019
US$m US$m
Cost of sales (321.8) (256.7)
Other income 6.7 11.6
Gain on disposal of a subsidiary 6.2 -
Administrative expenses (80.5) (88.9)
Change in fair value of other investments - 32.5
-------
(389.4) (301.5)
------- -------
4. OPERATING (LOSS)/ PROFIT
Six months ended 30th June
2020 2019
US$m US$m
By business
Investment Properties 432.2 482.6
Development Properties 35.9 27.5
Corporate (37.3) (40.2)
--------- ------
Underlying business performance 430.8 469.9
Change in fair value of investment properties (2,062.9) (74.4)
Change in fair value of other investments - 32.5
--------- ------
(1,632.1) 428.0
--------- ------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Six months ended 30th June
2020 2019
US$m US$m
By business
Investment Properties
- operating profit 60.7 72.0
- net financing charges (20.2) (25.9)
- tax (7.6) (8.5)
- net profit 32.9 37.6
Development Properties
- operating profit 41.4 166.0
- net financing charges (6.2) (7.7)
- tax (19.7) (61.1)
- non-controlling interests (3.2) (7.6)
- net profit 12.3 89.6
------- ------
Underlying business performance 45.2 127.2
Change in fair value of investment properties
(net of deferred tax) (134.5) (9.9)
(89.3) 117.3
------- ------
6. TAX
Six months ended 30th June
2020 2019
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (40.8) (72.5)
Deferred tax
- changes in fair value of investment
properties 12.3 (2.4)
- other temporary differences (20.9) 0.3
------ ------
(49.4) (74.6)
------ ------
Tax relating to components of other comprehensive
income is analysed as follows:
Cash flow hedges (0.5) (2.0)
------ ------
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$18.8
million (201 9 : US$ 68 . 6 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 and equity investments
which are measured at fair value through profit and loss; gains and
losses arising from the sale of businesses, investments and
investment properties; impairment of non-depreciable intangible
assets and other investments; 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 20 201 9
US$m US$m
Change in fair value of investment properties (2,062.9) (74.4)
Deferred tax on change in fair value of investment
properties 12.3 (2.4)
Share of change in fair value of investment
properties of
associates and joint ventures (net of deferred
tax) (134.5) (9.9)
Change in fair value of other investments - 32.5
Non-controlling interests 4.7 (0.8)
(2,180.4) (55.0)
--------- -------
8. EARNINGS PER SHARE
Earnings per share are calculated on loss attributable to
shareholders of US$1,827.6 million (201 9 : profit US$ 410 . 9
million) and on the weighted average number of 2,333.9 million (201
9 : 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
2020 2019
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to shareholders 352.8 15.12 465.9 19.96
Non-trading items (note 7) (2,180.4) (55.0)
(Loss)/profit attributable
to shareholders (1,827.6) (78.31) 410.9 17.61
----------- -------
9. DIVIDS
Six months ended 30th June
2020 2019
US$m US$m
Final dividend in respect of 2019 of USc 16
.00
(2018: USc16.00) per share 373.4 373.4
----- -----
An interim dividend in respect of 20 20 of USc 6 .00 (2019:
USc6.00) per share amounting to a total of US$140.0 million (2019:
US$140. 0 million) is declared by the Board and will be accounted
for as an appropriation of revenue reserves in the year ending 31st
December 20 20 .
10. INVESTMENT PROPERTIES
Year ended
31st
Six months ended 30th June December
2020 2019 2019
US$m US$m US$m
At beginning of period 33,191.2 33,712.1 33,712.1
Exchange differences 154.3 77.0 190.6
Additions 4,553.1 100.7 142.7
Decrease in fair value (2,062.9) (74.4) (854.2)
----------
At end of period 35,835.7 33,815.4 33,191.2
--------- -------- ----------
11. ASSOCIATES AND JOINT VENTURES
At 31st
At 30th June December
2020 2019 2019
US$m US$m US$m
By business
Investment Properties 3,540.0 3,944.4 3,753.7
Development Properties 3,299.9 3,208.1 3,472.4
----------
6,839.9 7,152.5 7,226.1
------- ------- ----------
12. BORROWINGS
At 30th June At 31st December
2020 2019 2019
US$m US$m US$m
Current
Bank overdrafts 2.6 4.9 6.0
Bank loans 317.3 286.4 383.8
Current portion of long-term
borrowings
* bank loans 42.9 8.4 21.4
* medium term notes - 405.7 304.1
362.8 705.4 715.3
Long-term
Bank loans 2,401.8 1,494.7 1,281.5
Medium term notes
- due 2021 66.7 66.1 65.5
- due 2022 623.9 614.5 614.7
- due 2023 180.1 178.4 179.2
- due 2024 416.1 407.1 406.7
- due 2025 647.0 648.0 647.5
- due 2026 38.8 38.4 38.6
- due 2027 186.8 185.2 186.0
- due 2028 183.5 181.9 182.6
- due 2029 121.9 50.6 121.3
- due 2030 697.6 102.4 102.8
- due 2031 25.5 25.3 25.4
- due 2032 140.7 30.2 30.3
- due 2033 89.6 88.8 89.2
- due 203 4 77.5 76 . 9 77.2
- due 203 5 51.1 - -
- due 2038 105.6 108.6 109.2
- due 203 9 106.6 - 110.2
- due 2040 32.1 31.9 32.0
3,791.1 2,834.3 3,018.4
6,192.9 4,329.0 4,299.9
------- ------- ----------------
6,555.7 5,034.4 5,015.2
------- ------- ----------------
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities,
together with carrying amounts at 30th June 2020 and 31st December
2019 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$m
30th June 2020
Financial assets measured
at fair value
Derivative financial instruments 50.6 - - 50.6 50.6
----- --------------
Financial assets not measured
at fair
value
Debtors - 197.9 - 197.9 197.9
Bank balances - 927.6 - 927.6 927.6
----- ------------- --------- ---------
- 1,125.5 - 1,125.5 1,125.5
----- ------------- -------------- --------- ---------
Financial liabilities measured
at fair
value
Derivative financial instruments (5.0) - - (5.0) (5.0)
----- ------------- -------------- --------- ---------
Financial liabilities not
measured at
fair value
Borrowings - - (6,555.7) (6,555.7) (6,820.8)
Trade and other payable
excluding
non-financial liabilities - - (673.8) (673.8) (673.8)
- - (7,229.5) (7,229.5) (7,494.6)
----- ------------- -------------- --------- ---------
31st December 2019
Financial assets measured
at fair value
Derivative financial instruments 30.5 - - 30.5 30.5
----- ----------
Financial assets not measured
at fair
value
Debtors - 345.8 - 345.8 345.8
Bank balances - 1,424.0 - 1,424.0 1,424.0
----- ------- ---------- ----------
- 1,769.8 - 1,769.8 1,769.8
----- ------- ---------- ---------- ----------
Financial liabilities measured
at fair
value
Derivative financial instruments (4.7) - - (4.7) (4.7)
----- ------- ---------- ---------- ----------
Financial liabilities not
measured at
fair value
Borrowings - - (5,015.2) (5,015.2) (5,174.4)
Trade and other payable
excluding
non-financial liabilities - - (900.9) (900.9) (900.9)
- - (5,916.1) (5,916.1) (6,075.3)
----- ------- ---------- ---------- ----------
Fair value estimation
(a) Financial instruments that are measured at fair value
Financial instruments carried at fair value at 30th June 20 20
and 31st December 201 9 a re analysed as follows:
At 31st
At 30th December
June 2020 2019
US$m US$m
Assets
Derivative financial instruments
at fair value
- through other comprehensive
income 22.7 19.7
- through profit and loss 27.9 10.8
----------- ---------
50.6 30.5
----------- ---------
Liabilities
Derivative financial instruments
at fair value
- through other comprehensive
income (5.0) (1.8)
- through profit and loss - (2.9)
----------- ---------
(5.0) (4.7)
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 20 and the year ended 31st December 201 9
.
(b) Financial instruments that are not measured at fair
value
The fair values of current debtors, bank balances, current
creditors and current borrowings 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.
14. NOTES TO CONSOLIDATED CASH FLOW STATEMENT
In February 2020, the Group acquired a mixed-use site along the
Huangpu River in the Xuhui District in Shanghai ('the West Bund
project') for a cost of US$4.5 billion. Subject to relevant
approvals by the authorities, the Group has conditionally finalised
agreements with two partners to jointly develop the West Bund
project, receiving an advance of US$2.3 billion in the first half
of 2020 and a further advance of US$0.3 billion in July 2020.
15. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 30th June 2020 and 31st December
2019 amounted to US$3,798.7 million (including US$2,641.9 million
development capital expenditure of the West Bund project) and
US$1,144.7 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.
16. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Holdings
Limited and the ultimate holding company is Jardine Matheson
Holdings Limited ('JMH'). Both companies 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 2020 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$1.8 million (2019: US$ 2.3 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$10.3 million (2019:
US$12.3 million).
The Group provided project management services and property
management services to Jardine Matheson group members amounted to
US$1.3 million (2019: Nil).
Jardine Matheson group members provided property maintenance and
other services to the Group in aggregate amounted to US$25.1
million (2019: US$23.9 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group amounted to US$0.4 million (2019: US$1.3
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. The
amounts are not material.
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 and Financial Risk
-- Commercial Risk
-- Regulatory and Political Risk
-- Pandemic, Natural Disasters, Climate Change and Terrorism
For greater detail, please refer to page 85 of the Company's
Annual Report for 20 19 , 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
Simon Dixon
Directors
Dividend Information for Shareholders
The interim dividend of USc6.00 per share will be payable on
14th October 2020 to shareholders on the register of members at the
close of business on 21st August 2020. The shares will be quoted
ex-dividend on 20th August 2020, and the share registers will be
closed from 24th to 28th August 2020, 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 2020
interim dividend by notifying the United Kingdom transfer agent in
writing by 25th September 2020. The Sterling equivalent of
dividends declared in United States Dollars will be calculated by
reference to a rate prevailing on 30th September 2020.
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')
For those shareholders who are on CDP's DCS, they 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
For those shareholders who are not on CDP's DCS, they 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 21st August 2020, 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 20th August 2020.
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
in 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, 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 Greater China
and Southeast Asia. In Singapore, its subsidiary, MCL Land, is a
well-established residential developer.
Hongkong Land Holdings Limited is incorporated in Bermuda and
has a standard 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
Robert Wong (852) 2842 8428
Simon Dixon (852) 2842 8101
Brunswick Group Limited
David Ashton (852) 3512 5063
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-Yearly
Results announcement to shareholders. The Half-Yearly Results
announcement will remain available on the Company's website,
www.hkland.com, together with other Group announcements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BKLFLBDLZBBQ
(END) Dow Jones Newswires
July 29, 2020 07:14 ET (11:14 GMT)
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