Kerry Properties

Kerry Properties profits from strong Hong Kong sales

Property group gains from robust interest in Lions Rise project and better showing from logistics arm, putting it on track for full-year target

PUBLISHED : Friday, 24 August, 2012, 12:00am
UPDATED : Friday, 24 August, 2012, 2:47am

Kerry Properties, a developer of upmarket real estate in Hong Kong and on the mainland, posted 10 per cent year-on-year growth in net profit to about HK$3.39 billion for the six months to June 30.

Before taking into account an increase in fair value of investment properties, Kerry said profit attributable to shareholders rose 5 per cent to HK$2.92 billion in the first half. Turnover was HK$17.96 billion, an increase of 93 per cent from a year ago.

The company said the growth was mainly driven by strong sales from its Lions Rise development in Wong Tai Sin, as well as an improved contribution from its logistics division.

"Early this year, we had targeted to achieve HK$10 billion in property sales, with 70 per cent from Hong Kong and 30 per cent from the mainland," chief executive Wong Siu-kong said yesterday. "We believe the [full-year] target will be achieved." For the full year, the company estimates property sales will reach 3 million square feet of floor area, with 2.5 million sq ft in mainland cities and the remainder in Hong Kong.

The company said property sales in the first-half totalled HK$5.6 billion, of which HK$4.1 billion came from Hong Kong and HK$1.5 billion from its mainland division. Its Hong Kong property division posted net profit of HK$2.37 billion, up 8.15 per cent from HK$2.19 billion in the first half of last year.

In its mainland division, net profit amounted to HK$578 million, taking into account an increase in fair value of investment properties of HK$471 million. That compares with first-half net profit last year of HK$492 million, which included fair-value gains of HK$306 million.

At the end of June, the group held a completed investment portfolio of residential, commercial and office properties in various mainland cities, including Shanghai, Tianjin and Hangzhou.

The aggregate gross floor area was 5.29 million square feet, compared with 4.46 million sq ft at the end of last year.

Wong said the company would expand on the mainland cautiously, in the wake of policy and economic risk factors there.

"We will not speed up expansion at this stage," he said.

Earnings per share were HK$2.35, up 10 per cent from HK$2.14 a share at the same time last year.

Kerry directors declared an interim dividend of 40 HK cents a share.

The company said it was in sound financial health, with HK$13.25 billion in cash and bank balances.

Kerry Properties also had HK$8.66 billion available in undrawn bank loan and overdraft facilities.

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