Hong Kong to face more economic headwinds, says developer
Sino Land reports 75.44 per cent rise in underlying profit
Hong Kong may face more economic headwinds, the chairman of leading property developer Sino Land, Robert Ng Chee Siong, said on Wednesday.
His warning about the city’s outlook came as the company announced a 75.44 per cent rise in its underlying profit, excluding revaluation items, to HK$3 billion for six months to the end of December thanks to strong property sales.
The city had experienced a decline in retail sales and visitor arrivals last year after more than a decade of growth, Ng said.
“Management is mindful of the upcoming uncertainties as the business environment in Hong Kong may turn more difficult,” he said.
Ng said the Hong Kong property market was continuing to consolidate as a result of economic and property-related policies. Both sales volume and value showed modest year-on-year falls last year.
However, the company, in a net cash position, was well-positioned to respond to challenges ahead, he said.
During the second half of last year, net profit was HK$3.88 billion, up 4 per cent from the same period in 2014. Earnings per share were 63.7 HK cents, against 2014’s 62 HK cents.
At the end of last year, the company had cash and bank deposits of HK$23.89 billion. After netting off total borrowings of HK$4.52 billion, the company had net cash of HK$19.37 billion at the end of 2015.
Sino Land had a total land bank of 32.9 million square feet at the end of last year in Hong Kong, mainland China, Singapore and Sydney, with properties under development of 19.5 million sq ft, investment properties and hotels of 11.8 million sq ft and properties held for sale of 1.6 million sq ft.
BNP Paribas property analyst Ricky Ng said he was optimsitic about the company and the sector’s outlook. The balance sheets of major developers remained strong, he said in a report released on Tuesday, adding that he believed developers were in no rush to sell inventory to deleverage despite a slow property market.
Directors declared an interim dividend of 13 HK cents a share, against 12 HK cents a share in 2014.
Parent company Tsim Sha Tsui Properties said its net profit for the six months amounted to HK$1.98 billion, up 5 per cent year on year from HK$1.88 billion.
Hotel unit Sino Hotels (Holdings) said its net profit for the second half of last year fell 24.5 per cent to HK$85.1 million.