TIDMHKLD TIDMJAR TIDMJDS
RNS Number : 9258R
Hongkong Land Hldgs Ltd
11 March 2021
Announcement
11th March 2021
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
2020 PRELIMINARY ANNOUNCEMENT OF RESULTS
Highlights
-- Underlying profit of US$963 million, down 11%
-- Net asset value per share down 7% on lower capital values
-- Dividend level maintained
-- 43% interest retained in the prime West Bund project in Shanghai
-- Balance sheet and funding position remain strong
"The Group continues to operate in a challenging environment and
uncertainty remains about the duration of the pandemic and the
impact it will have on the Group. The Investment Properties
portfolio and the Development Properties business are, however,
expected to remain resilient in 2021."
Ben Keswick
Chairman
Results
Year ended 31st December
2020 2019 Change
US$m US$m %
Underlying profit attributable to
shareholders(*) 963 1,076 -11
(Loss)/profit attributable to shareholders (2,647) 198 n/a
Shareholders' funds 35,709 38,247 -7
Net debt 4,568 3,591 +27
---------------------------------------------- -------- ------ ------
USc USc %
---------------------------------------------- -------- ------ ------
Underlying earnings per share(*) 41.27 46.12 -11
Earnings per share (113.43) 8.48 n/a
Dividends per share 22.00 22.00 -
---------------------------------------------- -------- ------ ------
US$ US$ %
---------------------------------------------- -------- ------ ------
Net asset value per share 15.30 16.39 -7
---------------------------------------------- -------- ------ ------
* 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 27 to the financial statements. Management considers
this to be a key measure which provides additional information
to enhance understanding of the Group's underlying business
performance.
The final dividend of USc16.00 per share will be payable on 12th
May 2021, subject to approval at the Annual General Meeting to be
held on 5th May 2021, to shareholders on the register of members at
the close of business on 26th March 2021.
HONGKONG LAND HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEARED 31ST DECEMBER 2020
OVERVIEW
The Group's performance was negatively impacted by COVID-19,
particularly in relation to the granting of retail rent relief in
the Investment Properties business and a lower contribution from
Development Properties as a result of fewer expected residential
completions. On the Chinese mainland, sentiment in the Group's
markets has recovered to pre-pandemic levels.
The Group responded decisively during the year to the pandemic,
prioritising the health and safety of our people and customers and
taking actions to manage costs and to further strengthen our
financial position. These efforts will continue whilst the
possibility of further waves of the pandemic remains.
The Group also remains focused on addressing changes in customer
behaviours, and the need to adapt and align to new situations
resulting from COVID-19, and is continuing to add to its suite of
digital services and flexible spaces that are available to tenants
and customers.
PERFORMANCE
Underlying profit attributable to shareholders fell 11% to
US$963 million.
Including net losses of US$3,610 million resulting from lower
valuations of the Group's investment properties, the loss
attributable to shareholders was US$2,647 million. This compares to
a profit of US$198 million in 2019, which included net losses of
US$878 million arising from revaluations.
The net asset value per share at 31st December 2020 was
US$15.30, compared with US$16.39 at the end of 2019.
The Directors are recommending a final dividend of USc16.00 per
share, providing a total dividend for the year of USc22.00 per
share, unchanged from last year.
GROUP REVIEW
Investment Properties
In Hong Kong, office leasing activity in Central was largely
subdued as a result of economic uncertainties brought about by the
pandemic. However, as a result of the Group's active lease
management in recent years, the Central office portfolio performed
relatively well amidst the current market downturn. Physical
vacancy at the end of 2020 was 6.3%, whilst vacancy on a committed
basis was 5.9%. Rental reversions were broadly neutral, with
average office rents increasing from HK$118 per sq. ft in 2019 to
HK$120 per sq. ft in 2020.
Retail market sentiment in Hong Kong was severely impacted by
the pandemic and resulting travel restrictions, although there were
modest improvements in the second half of the year. Average retail
rent in 2020 decreased to HK$164 per sq. ft from
HK$222 per sq. ft in 2019, primarily due to the granting of
temporary rent relief, which has been charged to underlying profit
as incurred, and negative base rental reversions. Vacancy was 0.3%
on both a physical and committed basis, unchanged from the prior
year. The portfolio retains its position as the pre-eminent luxury
shopping and fine dining destination in Hong Kong.
The value of the Group's Hong Kong Investment Properties
portfolio decreased by 10% compared to the prior year, due to lower
open market rents.
In Singapore, vacancy in the Group's office portfolio was 2.1%
on a physical and committed basis at the end of 2020, compared with
5.0% at the end of 2019. Rental reversions were positive, with
average rents increasing to S$9.9 per sq. ft in 2020 from S$9.7 per
sq. ft in 2019.
In Beijing, WF CENTRAL experienced a significant decline in
tenant sales and footfall in the first half of the year due to the
pandemic, whilst trading performance in the second half of the year
recovered to pre-pandemic levels buoyed by the strong recovery in
luxury retail spending on the Chinese mainland.
In Shanghai, planning and development of the Group's prime
mixed-use development on the West Bund, secured in February 2020,
is proceeding on schedule with completion expected in multiple
phases to 2027. The project will be jointly developed with a
strategic investor headquartered on the Chinese mainland and a
government-held SPV, with the Group retaining a 43% interest in the
joint venture.
Development Properties
The Group's Development Properties business saw varying levels
of disruption across the region due to the temporary suspension of
sales and development activities, with construction delays
impacting its full year performance.
On the Chinese mainland, sentiment in the Group's core markets
has recovered to pre-pandemic levels. Profit contribution decreased
compared to the prior year due to fewer planned completions
resulting from construction delays and a change in product sales
mix transferred to buyers. The Group's attributable interest in
contracted sales of US$2,135 million was 14% higher than in 2019
due to a change in sales location mix. At 31st December 2020, the
Group had an attributable interest of US$2,584 million in sold but
unrecognised contracted sales, compared with US$1,860 million at
the end of 2019.
The Group participated in a number of land auctions during the
year, although it remained difficult to secure new sites due to a
highly competitive primary land market. The Group did, however,
secure a wholly-owned predominantly residential project in a prime
location in Chongqing during the year. The site has a developable
area of 174,000 sq. m. and will be developed in two phases, with
completion expected in 2025.
In Singapore, recognised profits in 2020 were lower than the
prior year largely due to construction delays caused by the
pandemic. Despite the headwinds, pre-sales at the 1,404-unit Parc
Esta and the 638-unit Leedon Green projects have performed well
under current market conditions, with construction of the two
projects scheduled to complete by 2021 and 2022, respectively. The
Group's attributable interest in contracted sales was US$632
million, compared to US$669 million in the prior year.
In the rest of Southeast Asia, development activities have
largely resumed, although market sentiment remains subdued in light
of the ongoing impact of COVID-19 and the restrictions imposed to
contain it.
Financing
The Group's financial position remains strong with net debt of
US$4.6 billion on 31st December 2020, up from US$3.6 billion at the
end of 2019, primarily due to the acquisition of the West Bund
site. Net gearing at the end of the year was 13%, compared with 9%
at the end of 2019. As at 31st December 2020, the Group had
committed liquidity of US$4.3 billion, compared to US$3.2 billion
at the end of 2019, with an average tenor of debt of 6.6 years
compared to 6.1 years at the end of 2019.
PEOPLE
Despite the unprecedented challenges brought about by the
pandemic, our employees have shown exemplary commitment and
resilience in safeguarding the wellbeing of our customers. On
behalf of the Board, I would like to take this opportunity to thank
them for their dedication and hard work throughout the year.
John Witt succeeded me as Managing Director on 15th June 2020. I
will continue as Chairman. Mark Greenberg stepped down from the
Board on 31st December 2020. We are grateful for his contribution
to the Group since his appointment as a Director in 2006.
OUTLOOK
The Group continues to operate in a challenging environment and
uncertainty remains about the duration of the pandemic and the
impact it will have on the Group. The Investment Properties
portfolio and the Development Properties business are, however,
expected to remain resilient in 2021.
Ben Keswick
Chairman
CHIEF EXECUTIVE'S REVIEW
Hongkong Land produced a solid performance for the year despite
the challenges caused by the ongoing pandemic, with underlying
earnings modestly lower than the record results achieved in 2019.
Contributions from the Group's Investment Properties portfolio were
moderately impacted by the provision of temporary retail rent
relief and higher average office vacancy. Results from Development
Properties were impacted by a delay in the timing of profit
recognition primarily resulting from pandemic-related construction
delays and lower margins due to changes in the sales mix.
STRATEGY
Hongkong Land is a landlord and a developer in China and
Southeast Asia. The Group operates a portfolio of prime investment
properties which it develops and holds as long-term investments,
and it also develops premium residential and commercial properties
for sale.
The Group's Investment Properties are predominantly commercial
in nature and located in core business districts of key Asian
gateway cities, with a concentration in Hong Kong and Singapore.
Returns principally arise from rental income and long-term capital
appreciation. The Investment Properties segment is the largest
contributor to the Group's earnings given its relative size and
maturity. It accounted for 86% of the Group's gross assets at the
end of 2020 (2019: 87%) and contributed 65% of the Group's
underlying operating profit before corporate expenses in 2020
(2019: 61%).
The Group's Development Properties are primarily premium
residential and mixed-use developments located on the Chinese
mainland and in Singapore, with a growing presence in other
Southeast Asian markets. Returns principally arise from trading
profits in respect of the immediate sale of the residential and
office components, and rental and trading profits for certain
commercial elements of mixed-use sites that are disposed of, or
reclassified to Investment Properties, after rents have stabilised.
Development Properties accounted for 14% of the Group's gross
assets at the end of 2020 (2019: 13%) and 35% of the Group's
underlying operating profit before corporate expenses in 2020
(2019: 39%).
Geographically, China generates the bulk of the Group's
earnings. Hong Kong, which predominantly comprises Investment
Properties, accounted for 54% of the Group's underlying operating
profit before corporate expenses (2019: 51%), whilst the Chinese
mainland, which predominantly comprises Development Properties,
accounted for 28% (2019: 32%).
The Investment Properties portfolios in Hong Kong and Singapore
provide a stable stream of recurring earnings and balance sheet
strength that enables the Group to pursue new opportunities in both
its Investment Properties and Development Properties businesses in
its key markets. During 2020, the Group's share of capital
allocated to new investments totalled US$3.5 billion (2019: US$1.2
billion).
Hong Kong Investment Properties
In Hong Kong, the Group's Central Portfolio consists of 12
interconnected prime commercial buildings forming the heart of the
financial district in Central, providing over 450,000 sq. m. of
Grade A office and luxury retail space . This integrated mixed-use
development is positioned as the pre-eminent office, luxury retail,
restaurant and hotel accommodation in Hong Kong, and continues to
attract both prime office tenants and luxury retailers in addition
to housing the acclaimed Landmark Mandarin Oriental hotel.
Hong Kong's positioning as one of Asia's main financial and
business hubs, combined with the scarcity of supply of
high-quality, well-managed space in Central and the unique
qualities of the Group's portfolio, continue to support low vacancy
and strong rents. Despite the challenging conditions resulting from
the pandemic and global uncertainties, Hong Kong continues to
possess unique advantages as a financial centre that are not easily
replicated. The Group remains confident that Hong Kong will
continue to thrive as the primary gateway for capital flows in and
out of the Chinese mainland and will remain an important finance
and commercial hub for decades to come.
The Group's 54,000 sq. m. retail portfolio is integrated with
its office buildings to create part of its distinctive and
successful mixed-use business model. Tenants include numerous
global luxury brand flagship stores, as well as a number of leading
restaurants. LANDMARK is firmly established as the iconic luxury
shopping and fine dining destination in Hong Kong. Its success
depends on the health of the broader Hong Kong economy as well as
on Hong Kong remaining an attractive destination for affluent
visitors from across the region. The Group is working to ensure
that, despite the current challenging conditions, it remains the
clear market leader in the city in which global luxury brands
continue to be represented.
Other Investment Properties
Outside Hong Kong, the Group has similarly established itself as
a leading provider of prime office and retail space.
In Singapore, Hongkong Land's attributable interests totalling
165,000 sq. m. - principally concentrated in the Marina Bay Area -
include some of the finest Grade A office space in the market. On
the Chinese mainland, the Group's 49,000 sq. m. WF CENTRAL complex
in Beijing is positioned as a premium retail and lifestyle
destination, which includes a Mandarin Oriental hotel that has
established itself as one of the most exclusive hotels in the city.
In Indonesia, the Group has attributable interests of over 100,000
sq. m. of Grade A office space through its 50%-owned joint venture,
Jakarta Land. In Cambodia, the EXCHANGE SQUARE complex comprises
25,000 sq. m. of office and retail space in the heart of Phnom
Penh.
Our performance in these markets depends on the levels of demand
for, and supply of, prime office and luxury retail space, both of
which are influenced by global and regional macroeconomic
conditions. The Group is committed to maintaining excellence in
product quality and service to retain and attract tenants and
customers and will continue to seek new opportunities to develop
prime investment properties in key Asian gateway cities.
Development Properties
The Group has established a strong and profitable Development
Properties business focused primarily on the premium residential
market segment on the Chinese mainland and in Southeast Asia. On
the Chinese mainland, the Group has a presence in seven key
markets, namely Beijing, Chengdu, Chongqing, Hangzhou, Nanjing,
Shanghai and Wuhan, which are expected to continue benefiting from
the growth of the middle class and long-term urbanisation trends.
Whilst the capital invested in this business is significantly lower
than that invested in Investment Properties, the earnings derived
from Development Properties enhance the Group's diversification,
overall profits and return on capital. The Group's attributable
interest in the developable area of its projects at the end of 2020
totalled 9.1 million sq. m., compared to 9.0 million sq. m. at the
end of 2019. Of this, construction of approximately 43% had been
completed at the end of 2020, compared to 37% at the end of
2019.
Annual returns from Development Properties fluctuate due to the
nature of projects and the Group's accounting policy of recognising
profits for sold properties on completion in a number of markets,
including the Chinese mainland. Demand is also dependent on overall
economic conditions, which can be significantly affected by
government policies and the availability of credit. Ongoing land
acquisitions are necessary to build and maintain a stable income
stream over the longer term.
REVIEW OF INVESTMENT PROPERTIES
Profits from Investment Properties in 2020 were lower than the
prior year due primarily to rent relief granted in support of our
retail tenants across the region and higher average office
vacancy.
Hong Kong
Overall demand in the office market remained subdued in 2020 on
the backdrop of travel restrictions and other pandemic-related
measures, with few new entrants in the market. Physical vacancy in
the Group's Central office portfolio was 6.3% at the year-end, up
from 2.9% at the end of 2019. On a committed basis, vacancy was
5.9%. Vacancy for the overall Central Grade A office market was
7.3% at the end of 2020, compared to 3.6% at the end of 2019.
Rental reversions during the year were broadly neutral, as the
portfolio benefited from a number of leases which were concluded
prior to the onset of the pandemic in Hong Kong. The Group's
average office rent in 2020 was HK$120 per sq. ft, up from last
year's average of HK$118 per sq. ft. Financial institutions, legal
firms and accounting firms occupy 80% of the Group's total leased
office space. The weighted average lease expiry of the office
portfolio at the end of 2020 stood at 4.6 years, broadly unchanged
from the end of 2019.
The Group's retail portfolio in Hong Kong was severely impacted
by weakened sentiment in the luxury retail market as a result of
the pandemic. However, vacancy, on both a physical and committed
basis, remained low at 0.3%, unchanged from the end of 2019.
Average retail rent in 2020 decreased to HK$164 per sq. ft from
HK$222 per sq. ft in 2019, predominantly due to temporary rent
relief provided to tenants. Base rental reversions were negative,
reflecting falling retail rents across Hong Kong.
In June 2020, the Group successfully opened BaseHall, a
first-of-its-kind food hall concept in the basement level of
Jardine House. BaseHall aims to provide our tenants and other
patrons with the best of the city's buzzing culinary scene by
championing Hong Kong's exceptional food culture and incubating
homegrown talents. The BaseHall has eight food outlets and two
bars, all operated by celebrated names in Hong Kong's culinary
landscape chosen for their creative concepts and outstanding
offerings. To accommodate the demand for innovative concepts,
vendors will rotate on a regular basis.
In December 2020, the Group debuted BELOWGROUND on the basement
level of the LANDMARK. BELOWGROUND is a hybrid cultural and retail
destination that serves as a bridge to connect traditional luxury
retail with contemporary culture. By working alongside
world-renowned streetwear brands and creative collaborators,
BELOWGROUND aims to become a thriving cultural ecosystem that
shapes a future in which no boundaries exist between luxury,
fashion, culture and art. This new concept will continually have a
curated roster of various retail concepts and experiences.
The value of the Group's Investment Properties portfolio in Hong
Kong at 31st December 2020, based on independent valuations,
declined by 10% to US$28.4 billion due to lower open market rents,
with no change in capitalisation rates.
Singapore
The Singapore office leasing market remained relatively soft in
2020. Overall vacancy across the entire Grade A central business
district was 6.8% at the end of 2020, compared to 4.2% at the end
of 2019. The Group's office portfolio continued to perform well,
reflecting its high quality and unique positioning. The Group's
average office rent in 2020 was S$9.9 per sq. ft, an increase from
S$9.7 per sq. ft in the previous year, due to positive rental
reversions. Vacancy was low at 2.1%, on both a physical and
committed basis, at the year end, compared to 5.0% at the end of
2019. Financial institutions, legal firms and accounting firms
occupy 77% of the Group's total leased office space. The weighted
average lease expiry of the office portfolio at 2020 year-end stood
at 3.8 years
(2019: 4.4 years).
Following the introduction of the "By the Bay" mobile app in
2019, Bayspace, a plug-and-play flexible workspace, was
successfully launched in late 2020. Bayspace has been designed with
agility in mind and offers mid- to large-sized dedicated suites and
project rooms for tenants looking to expand on short notice in a
prestigious setting.
Chinese Mainland
In Beijing, trading at WF CENTRAL was negatively impacted by the
pandemic in the first half of 2020, with the Group providing
temporary rent relief on a case-by-case basis. Trading performance
improved significantly in the second half of the year due to a
strong recovery in luxury retail spending on the Chinese mainland.
No further rent relief was provided in the last two quarters as
tenant sales exceeded that of the same period last year.
In Shanghai, planning and development of the Group's prime
mixed-use development on the West Bund, secured in February 2020,
is proceeding on schedule. Completion is expected in phases from
2023 to 2027. The project will be jointly developed with a
strategic investor headquartered on the Chinese mainland and a
government-held SPV, with the Group retaining a 43% interest in the
joint venture, as well as ongoing project and asset management
rights.
Other Investment Properties
One Central Macau was impacted by weakened sentiment in the
luxury retail market and pandemic-related travel restrictions,
although there were modest improvements in trading from August 2020
due to the gradual relaxation of border restrictions with the
Chinese mainland. Occupancy was 92%, unchanged from the end of the
prior year. Average retail rent in 2020 decreased to MOP$120 per
sq. ft from MOP$207 per sq. ft in 2019 due to temporary rent
relief.
In Jakarta, the office portfolio remains resilient due to its
high quality and unique positioning, despite the continued surplus
of city-wide office supply and ongoing impact of the pandemic.
Occupancy was 72% at the end of 2020, compared to 77% at the end of
2019. On a committed basis, occupancy was 79%. The average net
effective rent was US$15.8 per sq. m. in 2020, compared to US$16.8
per sq. m. in the prior year.
In Phnom Penh, the office component of EXCHANGE SQUARE, located
in the heart of the city's emerging financial
district, was 91% occupied at the end of 2020, unchanged from the prior year.
In Bangkok, planning of the Group's 49%-owned prime commercial
joint-venture development in the central business district, secured
in late 2017, continues to progress. This development has a gross
floor area of 290,000 sq. m. and is expected to complete in
2026.
Performances at the Group's other investment properties were
within expectations under current market conditions.
REVIEW OF DEVELOPMENT PROPERTIES
Earnings from the Group's Development Properties segment were
lower in 2020 than in 2019, primarily due to pandemic-related
construction delays across the region and lower margins on the
Chinese mainland caused by a change in sales mix.
Chinese Mainland
The Group's development properties on the Chinese mainland
comprise 26 projects in seven cities, of which 12 projects are in
Chongqing. As at 31st December 2020, the Group's net investment in
development properties on the Chinese mainland was US$4.8 billion,
compared to US$4.4 billion at the end of 2019.
The Group participated in a number of land auctions during the
year, although it remained difficult to successfully secure new
sites due to a highly competitive primary land market. The Group
did, however, secure a 174,000 sq. m. wholly-owned predominantly
residential project in Chongqing during the year, to further
strengthen its already strong presence in the city. The site is
located immediately adjacent to the Guanyinqiao CBD in a mature
area that is master-planned for urban improvement. The project will
be developed in two phases, with completion expected in 2025.
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 and has
since remained stable. The Group's share of t otal contracted sales
in 2020 was US$2,135 million, 14% higher than the US$1,868 million
achieved in the prior year. The Group's attributable interest in
revenue recognised in 2020, including its share of revenue in joint
ventures and associates, increased by 13% to US$1,518 million from
US$1,348 million in 2019.
At 31st December 2020, the Group's attributable interest in sold
but not yet recognised contracted sales amounted to US$2,584
million, an increase of 39% from US$1,860 million at the end of
2019.
Chongqing, the largest city in western China, remains the most
significant market for the Group, representing some 38% of its
Chinese mainland Development Properties exposure. Including a newly
acquired project during the year, the Group has six wholly-owned
projects in Chongqing - Yorkville South, Yorkville North, River
One, The Pinnacle, Beryl Grove and a yet to be named project
adjacent to Guanyinqiao CBD that was acquired in December 2020 -
and six 50%-owned joint ventures: New Bamboo Grove, Landmark
Riverside, Central Avenue, Harbour Tale, Hillview, and Scholar's
Mansion.
The Group's attributable interest in 2020 revenue from property
sales in Chongqing, including its share of revenue in joint
ventures and associates, decreased by 7% to US$1,000 million, from
US$1,077 million in 2019. The Group's attributable interest in the
developable area of its Chongqing projects at the end of 2020
totalled 4.3 million sq. m., compared to 4.1 million sq. m. at the
end of 2019. Of this, construction of approximately 66% had been
completed at the end of 2020, compared to 58% at the end of
2019.
Shanghai is the second largest market for the Group,
representing some 20% of its Chinese mainland Development
Properties exposure. The Group has four joint venture projects in
Shanghai - Parkville, Galaxy Midtown, Irvine Bay and the trading
component of the West Bund project.
The Group's attributable interest in the developable area of its
Shanghai projects at the end of 2020 totalled 383,000 sq. m.,
compared to 256,000 sq. m. at the end of 2019. Of this,
construction of approximately 31% had been completed at the end of
2020, compared to 46% at the end of 2019.
Nanjing is the third most significant market for the Group,
representing some 19% of its Chinese mainland Development
Properties exposure. The Group has three joint venture projects in
Nanjing - Yue City, JL CENTRAL and River and City.
The Group's attributable interest in the developable area of its
Nanjing projects at the end of 2020 totalled 336,000 sq. m.,
unchanged from the prior year. Construction of approximately 39% of
this had been completed at the end of 2020, compared to nil at the
end of 2019.
In the central business district of Beijing's Chaoyang District,
the Group's 30%-owned Grade A office development of 127,000 sq. m.
of gross floor area remains in the planning phase, with
construction expected to commence in 2022.
Singapore
The wholly-owned 309-unit Margaret Ville residential project,
with a developable area of 22,000 sq. m., was 98% pre-sold at the
2020 year-end, with completion scheduled in 2021.
Construction of the wholly-owned 1,404-unit Parc Esta
residential project, with a developable area of 98,000 sq. m., is
on schedule and is expected to complete in 2021. As at the end of
2020, 92% of units had been pre-sold.
Development of the 50%-owned 638-unit Leedon Green residential
project, with a developable area of 49,000 sq. m., is on schedule
for completion in 2022. At the end of 2020, 11% of the units had
been pre-sold.
The Group's attributable interest in contracted sales was US$632
million in 2020, compared to US$669 million in the prior year. The
Group's attributable interest in revenue recognised in 2020 was
US$522 million, compared to US$516 million in the prior year.
At 31st December 2020, the Group's attributable interest in sold
but not yet recognised contracted sales amounted to US$676 million,
an increase of 18% from US$573 million at the end of 2019.
Other Development Properties
In Indonesia, development of the Group's projects was disrupted
by the pandemic, with market sentiment yet to recover to
pre-pandemic levels. Nava Park, the Group's 49%-owned joint
venture, is a 68-hectare site in the southwest of Jakarta. Upon
completion in 2031, Nava Park will comprise a mix of landed houses,
villas, mid-rise apartments and low-rise commercial components. Of
the 1,010 units that have been launched for sale, 77% had been
pre-sold at the end of 2020.
Asya, a joint venture which includes Astra International, in
which the Group has a 33.5% attributable interest, is a 67-hectare
site located in the east of Jakarta. The project will yield a total
developable area of approximately 896,000 sq. m., comprising landed
houses, villas, apartments and low-rise commercial shophouses. It
will be developed in multiple phases through to 2033. Of the 719
launched units, 43% had been pre-sold at the end of 2020.
Arumaya, the Group's 40%-owned joint venture with Astra
International, is a 299-unit luxury condominium project located in
South Jakarta. The project has a developable area of 24,000 sq. m.,
and is expected to complete in 2022. All of the units had been
launched as at the end of 2020, with 32% of the units reserved or
pre-sold.
Avania, the 50%-owned mixed-use development with Astra
International situated in central Jakarta, will consist of over 650
high-end apartments and a Grade A office tower. The project has a
developable area of 131,000 sq. m. and will be developed in two
phases through to 2026. Sales launch for the first phase of the
project is expected to commence in late 2021.
In the Philippines, development at Mandani Bay, a 40%-owned
20-hectare development in Cebu comprising principally residential
units, continues to progress despite pandemic-related disruptions.
The project will be developed in multiple phases through to 2036.
Of the 4,179 residential and office units launched, 86% had been
pre-sold at the end of 2020.
The Velaris, a 40%-owned joint venture project with Robinsons
Land, is a two-hectare site situated in the Bridgetowne Township in
Pasig City, Manila. The 1,953-unit luxury condominium project has a
developable area of 144,000 sq. m. and will be developed in three
phases through to 2031. Of the 185 units launched, 28% had been
pre-sold at the end of 2020.
In Vietnam, the Marq, a 70%-owned residential development in
District 1 of Ho Chi Minh City, is a 515-unit luxury residential
tower with a total developable area of approximately 57,000 sq. m.
Construction is progressing on schedule, with completion expected
in 2021. Of the 412 units launched, 71% had been pre-sold at the
end of 2020.
In Thailand, market sentiment has remained subdued since the
onset of the pandemic. Construction of the Esse Sukhumvit 36, a
49%-owned 338-unit luxury condominium tower in the Sukhumvit area
of Bangkok, was completed in early 2021. At the end of 2020, 64% of
the project had been sold.
Nonthaburi, the Group's 49%-owned joint venture project, is a
1,217-unit luxury landed housing project located in Western
Bangkok. The project has a total developable area of 434,000 sq. m.
and is expected to be developed in four phases through to 2028.
Lake Legend, the first phase of the project, comprises 57 landed
houses. Of the 23 units launched, 26% had been pre-sold at the end
of 2020.
King Kaew, a luxury residential project in which the Group has a
49% interest, is situated on King Kaew Road close to Suvarnabhumi
International Airport. The project has a developable area of
178,000 sq. m. and will comprise 474 villas. It is expected to
complete in 2029. The sales launch for the first phase of the
project is expected to commence in mid-2021.
Wireless Road, a luxury condominium site in which the Group has
a 49% interest, is situated on Wireless Road in Bangkok's central
business district. The project has a total developable area of
64,000 sq. m., and will consist of over 700 units. Development will
be in one phase, with completion expected in 2024. Sales launch for
the first phase of the project is expected to commence in
mid-2021.
SUSTAINABILITY
Hongkong Land has been a landlord and developer of premium
properties for more than 130 years. We strive to set an example of
good corporate citizenship by having a well-designed sustainability
strategy and governance structure and adopting global best
practices. Our continued growth and progress on sustainability
initiatives are guided and monitored by the Group's Sustainability
Committee, which reports to the Board. We are in a strong position
to continue integrating sustainability initiatives into our
operational and financing activities, investment analysis and risk
assessments.
During the year, the Group entered into a number of
sustainability-linked loans with an aggregate facility amount of
HK$4.4 billion. The facilities index tiered discounts to interest
rates against ESG targets, which incentivise the Group to
demonstrate continuous improvements in greenhouse gas emissions,
electricity consumption, reducing food waste, and solar energy
generation, whilst maintaining green building certifications for
the Group's Central Portfolio.
In November 2020, the Group launched the HK$100 million Hongkong
Land HOME FUND, which was established as a multi-year initiative to
focus on creating initiatives which benefit younger generations and
our aspiration to foster a more inclusive society. In its first
phase of collaborations, the fund worked with three community
organisations in a series of programmes that benefit younger
generations and families facing housing issues in Hong Kong.
In recognition of our continued efforts to adhere to the highest
environmental standards, the Group was awarded the "Sustainability
Achievement of the Year" at the RICS Awards 2020 in Hong Kong in
relation to its management of the Hong Kong Central Portfolio.
Further details on the Group's approach to sustainability and
related policies can be found on the Group's website at
hkland.com/en/sustainability. The Group's sustainability
performance for the financial year ended 31st December 2020 will be
included in a standalone Sustainability Report to be published on
the Group's website in the second quarter of 2021.
THE YEAR AHEAD
The Group continues to operate in a challenging environment and
uncertainty remains about the duration of the pandemic and the
impact it will have on the Group. Depending on overall economic
conditions, the Group's Investment Properties portfolio is expected
to remain resilient, underpinned by its high-quality tenant base.
In the Development Properties business, it is hoped that higher
completions on the Chinese mainland will lead to improved profit
contributions. Higher financing costs are anticipated partly due to
West Bund-related interest costs.
In the coming year, we will continue to uphold the very highest
standards in delivering innovative offerings and world-class
service to both our tenants and customers. These values are
critical to the future success of the Group and remain our priority
in order to protect our leading market positions and maintain
strong shareholder returns over the long term.
Robert Wong
Chief Executive
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2020
2020 2019
Underlying Non- Underlying Non-
business trading business trading
performance items Total performance items Total
US$m US$m US$m US$m US$m US$m
Revenue (note 2) 2,094.2 - 2,094.2 2,319.7 - 2,319.7
Net operating costs
(note 3) (1,135.2) 1.0 (1,134.2) (1,149.3) 34.4 (1,114.9)
Change in fair value
of
investment properties
(note 7) - (3,443.4) (3,443.4) - (854.2) (854.2)
Operating (loss)/profit
(note 4) 959.0 (3,442.4) (2,483.4) 1,170.4 (819.8) 350.6
Net financing charges
- financing charges (194.9) - (194.9) (204.8) - (204.8)
- financing income 79.0 - 79.0 83.4 - 83.4
(115.9) - (115.9) (121.4) - (121.4)
Share of results of
associates
and joint ventures
(note 5)
- before change in
fair value
of investment properties 267.5 - 267.5 272.7 - 272.7
* change in fair value of
investment properties - (175.4) (175.4) - (32.6) (32.6)
267.5 (175.4) 92.1 272.7 (32.6) 240.1
--------- --------- --------- ----------- ------- ---------
(Loss)/profit before
tax 1,110.6 (3,617.8) (2,507.2) 1,321.7 (852.4) 469.3
Tax (note 6) (149.5) 4.9 (144.6) (246.6) (20.5) (267.1)
--------- --------- --------- ----------- ------- ---------
( Loss)/ profit after
tax 961.1 (3,612.9) (2,651.8) 1,075.1 (872.9) 202.2
--------- --------- --------- ----------- ------- ---------
Attributable to:
Shareholders of the
Company 963.3 (3,610.7) (2,647.4) 1,076.4 (878.4) 198.0
Non-controlling interests (2.2) (2.2) (4.4) (1.3) 5.5 4.2
--------- --------- --------- ----------- ------- ---------
961.1 (3,612.9) (2,651.8) 1,075.1 (872.9) 202.2
--------- --------- --------- ----------- ------- ---------
USc USc USc USc
Earnings per share
(basic and diluted)
(note 8) 41.27 (113.43) 46.12 8.48
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2020
2020 2019
US$m US$m
(Loss)/profit for the year (2,651.8) 202.2
Other comprehensive income/( expense)
Items that will not be reclassified
to profit
or loss:
Remeasurements of defined benefit
plans 1.7 2.2
Tax on items that will not be
reclassified (0.3) (0.4)
1.4 1.8
Items that may be reclassified
subsequently
to profit or loss:
Net exchange translation differences
- net gain arising during the
year 400.9 166.3
Cash flow hedges
- net (loss)/gain arising during
the year (20.8) 25.7
- transfer to profit and loss (0.4) (0.6)
(21.2) 25.1
Tax relating to items that may
be
reclassified 3.5 (4.1)
Share of other comprehensive income
of associates and joint ventures 242.4 29.5
625.6 216.8
Other comprehensive income for
the
year, net of tax 627.0 218.6
--------- -----
Total comprehensive (expense)/income
for
the year (2,024.8) 420.8
--------- -----
Attributable to:
Shareholders of the Company (2,025.1) 418.0
Non-controlling interests 0.3 2.8
--------- -----
(2,024.8) 420.8
--------- -----
Hongkong Land Holdings Limited
Consolidated Balance Sheet
at 31st December 2020
2020 2019
US$m US$m
Net operating assets
F ixed assets 125.2 127.6
Right-of-use assets 12.4 12.4
Investment properties (note
10) 30,083.3 33,191.2
Associates and joint ventures 8,921.2 7,226.1
Non-current debtors 42.0 48.1
Deferred tax assets 35.5 26.9
Pension assets 0.7 0.1
Non-current assets 39,220.3 40,632.4
Properties for sale 1,948.8 2,042.0
Current debtors 1,081.7 1,141.3
Current tax assets 14.4 19.5
Bank balances 1,996.6 1,424.0
----------- ---------
Current assets 5,041.5 4,626.8
Current creditors (1,572.0) (1,460.8)
Current borrowings (note 11) (689.5) (715.3)
Current tax liabilities (153.0) (261.0)
Current liabilities (2,414.5) (2,437.1)
Net current assets 2,627.0 2,189.7
Long-term borrowings (note
11) (5,875.4) (4,299.9)
Deferred tax liabilities (195.8) (210.9)
Pension liabilities (1.3) (1.5)
Non-current creditors (36.3) (20.0)
----------- ---------
35,738.5 38,289.8
----------- ---------
Total equity
Share capital 233.4 233.4
Share premium 257.3 257.3
Revenue and other reserves 35,218.4 37,756.1
----------- ---------
Shareholders' funds 35,709.1 38,246.8
Non-controlling interests 29.4 43.0
----------- ---------
35,738.5 38,289.8
----------- ---------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
for the year ended 31st December 2020
Attributable to Attributable
shareholders to non-
Share Share Revenue Hedging Exchange of the controlling Total
capital premium reserves reserves reserves Company interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
2020
At 1st January 233.4 257.3 38,039.8 8.3 (292.0) 38,246.8 43.0 38,289.8
Total comprehensive
(expense)/income - - (2,646.0) (29.9) 650.8 (2,025.1) 0.3 (2,024.8)
Dividends paid by the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid to non-controlling
shareholders - - - - - - (0.9) (0.9)
Unclaimed dividends forfeited - - 0.8 - - 0.8 - 0.8
Disposal of a subsidiary - - - - - - (13.0) (13.0)
At 31st December 233.4 257.3 34,881.2 (21.6) 358.8 35,709.1 29.4 35,738.5
------- ------- --------- -------- -------- ------------ ----------- -----------
2019
At 1st January 233.4 257.3 38,352.7 (8.8) (493.1) 38,341.5 28.0 38,369.5
Total comprehensive income - - 199.8 17.1 201.1 418.0 2.8 420.8
Dividends paid by the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid to non-controlling
shareholders - - - - - - (0.9) (0.9)
Unclaimed dividends forfeited - - 0.7 - - 0.7 - 0.7
Ac quisition of a subsidiary - - - - - - 13.1 13.1
At 31st December 233.4 257.3 38,039.8 8.3 (292.0) 38,246.8 43.0 38,289.8
------- ------- --------- -------- -------- ------------ ----------- -----------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2020
2020 2019
US$m US$m
Operating activities
Operating (loss)/profit (2,483.4) 350.6
Depreciation and amortisation 15.3 13.6
Change in fair value of investment properties 3,443.4 854.2
Gain on disposal of subsidiaries/other
investments (7.2) (34.4)
Decrease/(increase) in properties for
sale 164.2 (1.1)
Decrease/(increase) in debtors 19.1 (186.7)
Increase in creditors 162.5 26.7
Interest received 42.3 50.3
Interest and other financing charges paid (220.1) (195.2)
Tax paid (267.9) (115.5)
Dividends from associates and joint ventures 112.9 419.6
Cash flows from operating activities 981.1 1,182.1
Investing activities
Major renovations expenditure (129.1) (116.4)
Developments capital expenditure (note
12a) (4,499.1) (27.3)
Repayments from/(investments in and advances
to)
associates and joint ventures 599.0 (646.0)
Acquisition of a subsidiary - (25.8)
Proceeds received for disposal of subsidiaries
(note 12b) 4,619.0 -
Deposits refunded for disposal of subsidiaries
(note 12b) (2,005.7) -
Proceeds on disposal of other investments - 157.5
Cash flows from investing activities (1,415.9) (658.0)
Financing activities
Drawdown of borrowings 3,726.9 1,334.5
Repayment of borrowings (2,268.8) (1,309.2)
Principal elements of lease payments (4.6) (5.1)
Dividends paid by the Company (509.6) (510.1)
Dividends paid to non-controlling shareholders (0.9) (0.9)
Cash flows from financing activities 943.0 (490.8)
--------- ---------
Net cash inflow 508.2 33.3
Cash and cash equivalents at 1st January 1,418.0 1,368.9
Effect of exchange rate changes 64.2 15.8
--------- ---------
Cash and cash equivalents at 31st December 1,990.4 1,418.0
--------- ---------
Hongkong Land Holdings Limited
Notes
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial information contained in this announcement has
been based on the audited results for the year ended 31st December
2020 which have been prepared in conformity with International
Financial Reporting Standards, including International Accounting
Standards and Interpretations adopted by the International
Accounting Standards Board.
The Group has elected to early adopt the 'Interest Rate
Benchmark Reform - Phase 1: Amendments to IFRS 9, IAS 39 and IFRS
7' (effective 1st January 2020) in relation to hedge accounting for
the Group's annual reporting period commencing 1st January
2019.
Apart from the above, 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 standard, interpretation or
amendment that has been issued but not yet effective.
2. REVENUE
2020 2019
US$m US$m
Rental income 937.6 998.8
Service income 147.5 152.6
Sales of properties
- recognised at a point in time 484.3 652.6
- recognised over time 524.8 515.7
1,009.1 1,168.3
2,094.2 2,319.7
------- -------
Total variable rents included in rental income amounted to
US$19.9 million (2019: US$16.2 million).
3. NET OPERATING COSTS
2020 2019
US$m US$m
Cost of sales (982.6) (989.6)
Other income 31.2 25.9
Administrative expenses (190.0) (185.6)
Gain on disposal of subsidiaries/other
investments 7.2 34.4
(1,134.2) (1,114.9)
--------- ---------
4. OPERATING (LOSS)/PROFIT
2020 2019
US$m US$m
By business
Investment Properties 834.9 918.6
Development Properties 198.3 334.8
Corporate (74.2) (83.0)
--------- -------
959.0 1,170.4
Change in fair value of investment properties (3,443.4) (854.2)
Gain on disposal of subsidiaries/other
investments 1.0 34.4
(2,483.4) 350.6
--------- -------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
2020 2019
US$m US$m
By business
Investment Properties
- operating profit 127.8 145.0
- net financing charges (36.1) (49.4)
- tax (16.5) (17.3)
- net profit 75.2 78.3
Development Properties
- operating profit 325.9 340.5
- net financing charges (8.1) (17.2)
- tax (121.7) (106.3)
- non-controlling interests (3.8) (22.6)
- net profit 192.3 194.4
------- -------
Underlying business performance 267.5 272.7
Change in fair value of investment properties
(net of tax) (175.4) (32.6)
92.1 240.1
------- -------
6. TAX
2020 2019
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (164.5) (247.8)
Deferred tax 19.9 (19.3)
(144.6) (267.1)
------- -------
Tax relating to components of other comprehensive income is
analysed as follows:
2020 2019
US$m US$m
Remeasurements of defined benefit plans (0.3) (0.4)
Cash flow hedges 3.5 (4.1)
----- -----
3.2 (4.5)
----- -----
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$125.9
million (2019: US$136.2 million) is included in share of results of
associates and joint ventures.
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties; gains and losses arising
from the sale of businesses and investment properties; impairment
of non-depreciable intangible assets; provisions for the closure of
businesses; acquisition-related costs in business combinations; and
other credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying
business performance.
An analysis of non-trading items after interest, tax and
non-controlling interests is set out below:
2020 2019
US$m US$m
Change in fair value of investment properties (3,443.4) (854.2)
Tax on change in fair value of investment
properties 4.9 (20.5)
Gain on disposal of subsidiaries/other
investments 1.0 34.4
Share of change in fair value of investment
properties in
associates and joint ventures (net of tax) (175.4) (32.6)
Non-controlling interests 2.2 (5.5)
(3,610.7) (878.4)
--------- -------
8. EARNINGS PER SHARE
Earnings per share are calculated on loss attributable to
shareholders of US$2,647.4 million (2019: profit of US$198.0
million) and on the weighted average number of 2,333.9 million
(2019: 2,333.9 million) shares in issue during the year.
Earnings per share are additionally calculated based on
underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
2020 2019
--------------------- -------------------
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to
shareholders 963.3 41.27 1,076.4 46.12
Non-trading items (note 7) (3,610.7) (878.4)
--------- -------
(Loss)/profit attributable
to
shareholders (2,647.4) (113.43) 198.0 8.48
--------- -------
9. DIVIDS
2020 2019
US$m US$m
Final dividend in respect of 2019 of USc16.00
(2018: USc16.00) per share 373.4 373.4
Interim dividend in respect of 2020 of
USc6.00
(2019: USc6.00) per share 140.0 140.0
513.4 513.4
----- -----
A final dividend in respect of 2020 of USc16.00 (2019: USc16.00)
per share amounting to a total of US$373.4 million (2019: US$373.4
million) is proposed by the Board. The dividend proposed will not
be accounted for until it has been approved at the 2021 Annual
General Meeting. The amount will be accounted for as an
appropriation of revenue reserves in the year ending 31st December
2021.
10. INVESTMENT PROPERTIES
2020 2019
US$m US$m
At 1st January 33,191.2 33,712.1
Exchange differences 635.8 190.6
Additions 4,621.3 142.7
Disposal of subsidiaries (4,921.6) -
Decrease in fair value (3,443.4) (854.2)
At 31st December 30,083.3 33,191.2
--------- --------
11. BORROWINGS
2020 2019
US$m US$m
Current
Bank overdrafts 6.2 6.0
Bank loans 100.3 383.8
Current portion of long-term borrowings
- bank loans 516.8 21.4
- medium term notes 66.2 304.1
689.5 715.3
Long-term
Bank loans 1,939.1 1,281.5
Medium term notes
------- -------
- due 2021 - 65.5
- due 2022 622.7 614.7
- due 2023 180.1 179.2
- due 2024 414.3 406.7
- due 2025 646.2 647.5
- due 2026 38.8 38.6
- due 2027 186.8 186.0
- due 2028 183.5 182.6
- due 2029 121.9 121.3
- due 2030 697.9 102.8
- due 2031 25.5 25.4
- due 2032 140.8 30.3
- due 2033 89.6 89.2
- due 2034 77.5 77.2
- due 2035 254.9 -
- due 2038 111.3 109.2
- due 20 39 112.4 110.2
- due 2040 32.1 32.0
3,936.3 3,018.4
5,875.4 4,299.9
6,564.9 5,015.2
------- -------
12. NOTES TO CONSOLIDATED CASH FLOW STATEMENT
a) Development capital expenditure in 2020 included US$4,484.5
million for a prime mixed used site in the Xuhui District of
Shanghai, Chinese mainland.
b) Net cash inflow for disposal of subsidiaries in 202 0 was
US$2,613.3 million, being proceeds received of US$4,619.0 million
less deposits refunded of US$2,005.7 million. This net cash inflow
included US$2,566.2 million for 57 % interest in a prime mixed used
project in the Xuhui District of Shanghai, Chinese mainland.
13. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 31st December 2020 amounted to
US$828.8 million (2019: US$1,144.7 million).
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 financial statements.
14. 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 are described below:
Management fee
The management fee payable by the Group, under an agreement
entered into in 1995, to Jardine Matheson Limited ('JML') in 2020
was US$4.8 million (2019: US$5.4 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 in 2020 amounted to US$19.3 million
(2019: US$24.1 million).
The Group provided project management services and property
management services to Jardine Matheson group members in 2020
amounting to US$3.7 million (2019: US$3.0 million).
Jardine Matheson group members provided property maintenance and
other services to the Group in 2020 in aggregate amounting to
US$63.1 million (2019: US$61.4 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group in 2020 amounting to US$1.6 million (2019:
US$2.1 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint
ventures are included in associates and joint ventures, 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 process by which the Group identifies and
manages risk will be set out in more detail in the Corporate
Governance section of the Company's 2020 Annual Report (the
'Report'). The following are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the
Disclosure Guidance and Transparency Rules issued by the Financial
Conduct Authority in the United Kingdom and are in addition to the
matters referred to in the Chairman's Statement, Chief Executive's
Review and other parts of the Report.
Economic Risk
The Group is exposed to the risk of negative developments in
global and regional economies, and financial and property markets,
either directly or through the impact such developments might have
on the Group's joint venture partners, associates, bankers,
suppliers, customers or tenants. These developments could include
recession, inflation, deflation and currency fluctuations,
restrictions in the availability of credit, increases in financing
and construction costs and business failures, and reductions in
office and retail rents, office and retail occupancy, and sales
prices of, and demand for, residential and mixed-use
developments.
Such developments might increase costs of sales and operating
costs, reduce revenues, increase net financing charges, or result
in reduced valuations of the Group's investment properties or in
the Group being unable to meet its strategic objectives.
Commercial Risk and Financial Risk
Risks are an integral part of normal commercial activities, and
where practicable steps are taken to mitigate them. Risks can be
more pronounced when businesses are operating in volatile
markets.
The Group makes significant investment decisions in respect of
commercial and residential development projects and these are
subject to market risks. This is especially the case where projects
are longer-term in nature and take more time to deliver
returns.
The Group operates in regions which are highly competitive, and
failure to compete effectively, whether in terms of price, tender
terms, product specification or levels of service can have an
adverse effect on earnings or market share, as can construction
risks in relation to new developments. Significant competitive
pressure may also lead to reduced margins.
It is essential for the products and services provided by the
Group's businesses to meet appropriate quality and safety standards
and there is an associated risk if they do not, including the risk
of damage to brand equity or reputation, which might adversely
impact the ability to achieve acceptable revenues and profit
margins.
The potential impact of disruption to IT systems or
infrastructure, whether as a result of cyber-crime or other
factors, could be significant. There is also an increasing risk to
our businesses from adverse social media commentary, which could
influence customer and other stakeholder behaviours and impact
operations or profitability, or lead to reputational damage.
The steps taken by the Group to manage its exposure to financial
risk will be set out in the Financial Review and in a note to the
Financial Statements in the Report.
Regulatory and Political Risk
The Group is subject to a number of regulatory regimes in the
territories in which it operates. Changes in such regimes, in
relation to matters such as foreign ownership of assets and
businesses, exchange controls, planning controls, tax rules,
climate-related regulation and employment legislation, could have
the potential to impact the operations and profitability of the
Group.
Changes in the political environment, including political or
social unrest, in the territories where the Group operates could
adversely affect the Group.
Pandemic, Natural Disasters, Climate Change and Terrorism
The Group could be impacted by a global or regional pandemic
which seriously affects economic activity or the ability of
businesses to operate smoothly. In addition, many of the
territories in which the Group operates can experience from time to
time natural disasters such as earthquakes and typhoons.
Ongoing changes to the physical climate in which the Group
operates may have an impact on our businesses. Rising sea levels
could, in the future, affect the value of any coastal assets that
the Group owns or develops.
The Group's operations are vulnerable to the effects of
terrorism, either directly through the impact of an act of
terrorism or indirectly through the effect on the Group's
businesses of generally reduced economic activity in response to
the threat of, or an actual act of, terrorism.
Cybersecurity Risk
The Group's businesses are ever more reliant on technology in
their operations and face increasing numbers of cyberattacks from
groups targeting both individuals and businesses. The privacy and
security of customer, tenant and corporate information is at risk
of being compromised through a breach of our or our suppliers' IT
systems or the unauthorised or inadvertent release of information,
resulting in brand damage, impaired competitiveness or regulatory
action. Cyberattacks may also adversely affect our ability to
manage our business operations or operate information technology
and business systems, resulting in business interruption, lost
revenues, repair or other costs.
Hongkong Land Holdings Limited
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
(a) the consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations
adopted by the International Accounting Standards Board; and
(b) the sections of the Company's 2020 Annual Report, including
the Chairman's Statement, Chief Executive's Review and the
Principal Risks and Uncertainties, which constitute the management
report, include a fair review of all information required to be
disclosed by the Disclosure Guidance and Transparency Rules 4.1.8
to 4.1.11 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 final dividend of USc16.00 per share will be payable on 12th
May 2021, subject to approval at the Annual General Meeting to be
held on 5th May 2021, to shareholders on the register of members at
the close of business on 26th March 2021. The shares will be quoted
ex-dividend on 25th March 2021, and the share registers will be
closed from 29th March to 2nd April 2021, 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
final dividend by notifying the United Kingdom transfer agent in
writing by 28th April 2021. The Sterling equivalent of dividends
declared in United States Dollars will be calculated by reference
to a rate prevailing on 3rd May 2021.
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 26th March 2021, 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 25th March 2021.
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 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
Mark Lam (852) 2842 8211
Brunswick Group Limited
Andrea Ngai (852) 3512 5093
Full text of the Preliminary Announcement of Results and the
Preliminary Financial Statements for the year ended 31st December
2020 can be accessed through the Internet at 'www.hkland.com'.
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END
FR EAXDFFDDFEEA
(END) Dow Jones Newswires
March 11, 2021 04:16 ET (09:16 GMT)
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