Henderson boss stays hopeful as profit falls
Chairman Lee Shau-kee counts on sales at major projects and a rise in rental income in the second half after underlying earnings drop 4pc
Henderson Land Development yesterday posted a 4 per cent decline in first-half underlying profit, but chairman Lee Shau-kee is optimistic about the second half.
Excluding property revaluation gains, profit for the six months to June dropped to HK$3.45 billion from HK$3.59 billion last year. Underlying earnings per share amounted to HK$1.30.
If they are completed as planned within this year, profit arising from these sales will be accounted for this year
Including the fair-value changes in investment properties, earnings edged up to HK$7.76 billion from HK$7.73 billion.
The company declared an interim dividend of 32 HK cents per share, unchanged from last year.
Lee, who said earlier this month that he would reach a deal in three months with the Housing Society to donate his own farmland in Yuen Long to provide low-cost homes for sale, was optimistic about the outlook for Henderson Land.
At the end of June, attributable sales revenue of the company's major developments, The Reach in Yuen Long and Green Code in Fanling, amounted to HK$5.56 billion.
"If they are completed as planned within this year, profit arising from these sales will be accounted for this year," Lee said in the results announcement.
He also said the group's rental income was poised to increase this year.
For the six months, attributable pre-tax net rental income jumped 12 per cent to HK$2.24 billion.
On the mainland, Henderson Land's attributable sales and pre-sales totalled HK$4 billion worth, an increase of 144 per cent from last year. Pre-tax net rental income grew 24 per cent to HK$509 million.
In Hong Kong, the company is expected to benefit from the government's plan to develop the North East New Territories New Development Areas.
Adrian Ngan, executive director of property equities research at Citic Securities, said Henderson Land's outlook would depend on the strength of property sales in Hong Kong during the second half.
Four projects involving 1,084 units, which include Double Cove (Phase 2) in Ma On Shan, would be available for sale in the second half, the company said.
Meanwhile, Henderson Land's subsidiary, Henderson Investment, posted a net profit of HK$7 million in the first half, down 70 per cent from last year. Earnings per share were 0.2 HK cent, compared with 0.8 HK cent previously.
Henderson Investment said the profit slump came about as payment of the toll fee for Hangzhou Qianjiang Third Bridge to a joint-venture company of the group was provisionally suspended from March 20 last year.
