Kerry unit targets HK$10b in sales after hefty profits

PUBLISHED : Friday, 18 March, 2011, 12:00am
UPDATED : Friday, 18 March, 2011, 12:00am

Kerry Properties aims to sell HK$10 billion worth of properties in Hong Kong and in the mainland after it reported a 59 per cent increase in underlying full-year profit.

For the year to December, it said core earnings were HK$3.4 billion, driven by strong property sales in Hong Kong.

Taking into account a HK$2.9 billion revaluation gain on investment properties, net profit was HK$6.31 billion, up 44 per cent from the a year earlier. Turnover for the year to December rose 64 per cent to HK$21.22 billion. A final dividend of 52 HK cents was declared, up 30 per cent from 2009.

Net profit from the Hong Kong property division was HK$3.91 billion, inclusive of a HK$1.95 billion revaluation gain on investment properties. In the period, it launched Island Crest in Sai Ying Pun and Larvotto, a joint venture with Sun Hung Kai Properties in Ap Lei Chau. Its mainland property division recorded underlying profit down 0.6 per cent to HK$641 million last year.

Net earnings from logistics network division rose 33 per cent to HK$797 million, while infrastructure division was HK$82 million, increased 17.14 per cent from 2009.

Louis Wong, chief financial officer, said the developer planned to offer 1.8 million square feet of real estate in the mainland and 750,000 sq ft in Hong Kong this year. It raised contract sales target by 17 per cent to HK$10 billion this year, from HK$8.5 billion in 2009, he said.

Commenting on the mainland property market, president and chief executive Wong Siu-kong said home sales volumes declined significantly after restrictions were imposed on home purchases and required higher down payments.

'Lower prices were seen in selected second-tier cities but have not yet spread to first-tier cities. It will take another three to six months to assess the impact of austerity measures on the market,' he said.

In January, the central government announced measures to curb property demand. It raised down payments to 60 per cent of the price from 50 per cent and increased restrictions on buying second homes.

Mainlanders are barred from buying a third house if they own more than two properties in the city in which they are a resident. And a property tax was launched in Shanghai and Chongqing.

Wong said the developer would release housing projects in Hangzhou, Chengdu and Changsha which mainly cater to end-users.

In Hong Kong, executive director Steven Ho Shut-kan said Kerry was interested in three residential sites in Hung Hom released for auction and tendering on Wednesday.

He believed home prices were unlikely to fall significantly, pointing out Kerry's plan to release its residential project, Lions Rise in Wong Tai Sin, at an asking price of HK$10,000 per sq ft in the second quarter.

Kerry Properties shares fell 1.44 per cent to HK$37.55.

Kerry Properties is part of the Kerry Group, the controlling shareholder of the SCMP Group, which publishes the South China Morning Post.

Healthy accounts

This is the net profit, in HK dollars, for the year to December, a 44 per cent increase, for Kerry Properties: $6.3b