Kerry Properties lifts interim income 59pc

The company says it will keep active in development and sales in spite of market uncertainties, adding it has no timeline for logistics unit spin-off

PUBLISHED : Thursday, 22 August, 2013, 12:00am
UPDATED : Thursday, 22 August, 2013, 3:05am

Kerry Properties said its net profit rose 59 per cent in the first half of 2013 versus the same period a year ago, but gave investors no guidance on the progress of the potential spin-off of the firm's logistics business.

Net profits for the period ended June 30 were HK$5.38 billion, against HK$3.39 billion in the same period in 2012 on total turnover of HK$17.25 billion, compared with HK$17.96 billion previously.

Stripping out property revaluation gains, the company posted a fall of 21 per cent in net profits to HK$2.3 billion, against HK$2.92 billion previously. Gains from its major new Hong Kong residential project, Bayview, will be booked in the second half of the year.

Kerry said it faced a complex and uncertain international economic environment, as well as continued controls over property markets on the mainland and in Hong Kong. "The group will proceed with the active development and sales launches of high-quality projects, in order to increase sales revenue to expedite cash inflow and further lower its debt ratio," it said in a statement.

Kerry's gearing ratio was 36.3 per cent on June 30, against 22.4 per cent on December 31 last year.

Kerry revealed last month that it intended spinning off its logistics arm via a Hong Kong listing. Kerry Logistics Network operates the largest distribution network in greater China and Southeast Asia.

No timeline for the sale had yet been fixed, Louis Wong Chi-kong, the chief financial officer of Kerry Properties, said yesterday at a news conference after the release of the interim results.

BNP Paribas property analyst Patrick Wong Chi-leung told the South China Morning Post he expected the sale of the logistics business to provide one-off gains, improve cash-flow and lower the group's gearing.

Commenting on the development potential of Qianhai, Hengqin and Nansha - the three key areas supported by the central government to boost Guangdong's development - newly appointed Kerry Properties chairman Wong Siu-kong saw Qianhai as the most attractive due to its proximity to Hong Kong.

Kerry announced that Wong, previously chief executive of Kerry Properties, had replaced Kuok Khoon Chen as chairman of the company, effective yesterday.

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