Sino Land

Sino Land posts stronger gains

Underlying profit at the property giant beats analysts' estimate with a near 21pc increase in the fiscal year, buoyed by rental income

PUBLISHED : Thursday, 30 August, 2012, 12:00am
UPDATED : Thursday, 30 August, 2012, 3:17am

Blue-chip property developer Sino Land says its underlying profit, which excludes property revaluation gains, rose 20.6 per cent to HK$5.31 billion in the fiscal year ended June 30 from a year earlier.

However, net profit attributable to shareholders fell 6 per cent to HK$9.91 billion from HK$10.54 billion last year because of a decrease in the amount of gains from revaluations of investment properties.

The result is slightly better than a forecast by analysts, who prefer to look at underlying profit to gauge the performance of the city's property companies because regular revaluations of investment properties distort the bottom line.

Contributions from property sales, including those of associates recognised by the company, totalled HK$3.02 billion, down from HK$3.24 billion in the previous year.

But net rental income increased 13.6 per cent to HK$2.54 billion. The increase was mainly due to higher rental rates on renewals as well as improved occupancy in the existing rental portfolio.

Turnover rose 41.2 per cent to HK$8.4 billion from HK$5.94 billion in the previous year.

Directors declared a final dividend of 36 HK cents a share. Together with the interim dividend of 10 HK cents a share, the total payout for the year is 46 HK cents a share, compared with 40.91 HK cents a year ago.

Looking ahead, Sino Land expects to complete seven projects with an attributable gross floor area of 1.3 million square feet in fiscal 2013. Those projects include its 45 per cent owned The Coronation in southwestern Kowloon, 35 per cent owned Providence Bay in Pak Shek Kok, Tai Po, and Park Summit in Mong Kok, which is a joint-venture project.

Almost all the 740 residential flats in The Coronation have been sold, as well as 98 per cent of Park Summit flats and 46 per cent of Providence Bay flats.

Nomura Hong Kong predicted in a research report this week that Sino Land's underlying profit for the year to June 2013 would be HK$5.94 billion, up about 12 per cent from the year just ended.

As at June 30, the company's gearing was 4.4 per cent. Its land bank stood at 40.7 million sq ft of attributable gross floor area.

Shares of Sino Land slipped 0.15 per cent yesterday to HK$13.34 each in a weaker overall market.

Meanwhile, parent company Tsim Sha Tsui Properties said its underlying net profit attributable to shareholders, excluding property revaluation gains, was HK$2.69 billion, up 18.2 per cent from a year earlier.

Net profit was down 8.7 per cent to HK$5 billion.

Sino Hotels said its net profit attributable to shareholders, of HK$235 million for the year ended June, represented an increase of 28.2 per cent from HK$183.3 million in the previous year.