Henderson Land sees core profit gain 11.7pc

PUBLISHED : Tuesday, 18 September, 2007, 12:00am
UPDATED : Tuesday, 18 September, 2007, 12:00am

Lower revaluation cuts bottom line by 27.5pc

Henderson Land Development said its full-year profit excluding property revaluation rose 11.7 per cent to HK$5.88 billion for the year to June, boosted by increased home sales and steady rental growth from investment properties such as the International Finance Centre.

The developer controlled by Lee Shau-kee said its bottom line dropped 27.5 per cent year on year to HK$9.82 billion.

Gains from investment property revaluation were just HK$1.98 billion, against HK$7.3 billion a year earlier.

Turnover was HK$8.36 billion, a rise of 23.37 per cent.

'Substantial growth in gross domestic product, rising wages, improved employment prospects and favourable bank mortgage terms have all resulted in a buoyant property market,' said Mr Lee, the company's chairman.

During the year, the company also booked HK$938 million in one-off gains made by the revaluation of assets acquired from subsidiary Henderson Investment and its share of gains from the disposal of 10 piped city gas projects by associate, Hong Kong and China Gas (Towngas).

In March, Henderson Land stripped out assets - including a 31.36 per cent stake in Hong Kong Ferry (Holdings) and 44.21 per cent of Miramar Hotel and Investment - from 67.94 per cent-owned Henderson Investment for HK$12.11 billion.

Excluding non-recurrent income, profit for the year was HK$4.95 billion, in line with expectations.

'It is more or less the same as my forecast,' said Manfred Ho, director of BNP Paribas' research department, who had predicted HK$5.1 billion from recurrent income.

Profit from property development for the year was HK$1.56 billion, 15.55 per cent higher than the previous year.

The number of homes sold per month in Hong Kong had exceeded 11,000 for the past six months, the first time in 10 years, property agents said.

Henderson saw profit from property leasing of HK$1.59 billion, up 16 per cent from the previous year.

Mr Ho at BNP Paribas said the company's growth would depend largely on whether it met its mainland development targets.

He said a significant contribution from the mainland would be realised in 2010.

For the three years to June 30, next year, the developable floor area to be completed in the mainland is expected to be 4.4 million sq ft. This will increase to 12.6 million sq ft in 2010, the developer said.

In the first eight months of this year, the company acquired 36.69 million sq ft of additional land bank in the mainland, 154 per cent more than the previous year.

The company said 50 million sq ft of developable floor area was under negotiation, which could bring Henderson's mainland land bank to 150 million sq ft by 2007.

In Hong Kong, its land bank stood at 21.1 million sq ft of gross floor area at year end, including 9 million sq ft of investment properties.

Mr Lee expected residential property prices in the city to rise steadily.

The company offered a final dividend of 70 HK cents a share, bringing the full-year total to HK$1.10, up 5 per cent from the previous year.

Meanwhile, Henderson Investment said net profit, including revaluation gains, was HK$5.39 billion, up 47 per cent. Net profit rose 127.1 per cent to HK$4.69 billion from the year before. A final dividend of 15 HK cents a share was proposed.