Henderson Land interim up 55pc on strong sales

PUBLISHED : Friday, 28 March, 2008, 12:00am
UPDATED : Friday, 28 March, 2008, 12:00am

Henderson Land Development said its six-month underlying profit, excluding gains from investment property revaluations, rose 55 per cent to HK$3.76 billion on higher sales and rental income in Hong Kong.

But analysts expressed reservations on whether it could maintain profit growth, warning that Hong Kong's economy and property sector could be hurt by the subprime crisis in the United States.

They also expressed concern about the potential impact on the company's mainland expansion of Beijing's austerity measures.

Hong Kong's third-largest developer by market value said net profit, including property revaluation gains, rose 142 per cent to HK$9.19 billion for the six months to December.

Earnings per share of HK$4.69 were more than double the HK$2.06 for the same period in 2006.

Directors declared an interim dividend of 40 HK cents a share, unchanged from a year earlier.

The company said the profit contribution from its Hong Kong property projects rose 66 per cent to HK$3.67 billion. The net rental income contribution rose 12 per cent to HK$1.24 billion.

Henderson Land said its development land bank on the mainland totalled 45.2 million sq ft on December 31, potentially providing an aggregate developable gross floor area of 116.3 million sq ft.

Analysts said the mainland's austerity measures could cast a pall over the sector. 'All companies with mainland property developments will be hurt by the macroeconomic measures,' said Prudential Brokerage associate director Kingston Lin King-kam. 'Henderson Land will not be an exception.'

Thomson Financial estimated the firm's full-year underlying profit would drop 1.13 per cent to HK$5.82 billion.

During the period, Henderson Land acquired a 39.06 per cent stake in Hong Kong and China Gas (Towngas) from its subsidiary Henderson Investment for HK$45.98 billion.

That deal helped Henderson Investment post an interim net profit of HK$35.33 billion.

Excluding Henderson Investment's profit from the sale of the Towngas stake, its net profit totalled HK$66 million - a 46 per cent fall from the year-ago period, the company said.

The company declared an interim dividend of 2 HK cents per share against 13 HK cents a year earlier. No special dividend was proposed.


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