Rare gains from residential projects offset low rents to help deliver first-half rise
A rare residential development profit helped Hongkong Land Holdings turn in a 24 per cent rise in underlying earnings to US$104 million for the first half of this year.
The group's first residential profit in 20 years saw it make US$14 million from sales of the Central Park 570-unit phase one project in Beijing and eight Stanley Court houses in Hong Kong.
Chief executive Nicholas Sallnow-Smith said the residential development contribution outweighed the 6 per cent fall in property rental income, which totalled US$144.6 million.
The result was also helped by an US$8.3 million decrease in net finance charges to $24.8 million due lower interest rates. An interim dividend of two US cents a share will be paid.
The underlying profit, excluding property revaluations, beat analysts' expectations. Taking into account revaluations, Hongkong Land posted a first-half profit of US$783 million, compared with a $773 million loss for the first half of last year. The value of the group's investment properties increased by $810.1 million to $6.32 billion during the six months, compared with a $951.8 million decrease previously.
Group chairman Simon Keswick said positive global economic prospects meant rents in Hong Kong should continue to firm, lifting values of its investment property portfolio.