Hysan’s 1st half net profit falls on revaluation loss
The developer of Hysan Place says full year earnings will be “steady”
Hysan Development, Hong Kong’s seventh largest developer by market capitalisation, reported a profit decline in the first six months of 2016, after a revaluation of its investment properties.
Net income fell 60.7 per cent to HK$899 million, or HK$0.86 per share, the company said in an exchange statement. Excluding valuation loss from the company’s investment properties, Hysan’s underlying profit rose 1.3 per cent to HK$1.18 billion, beating a Reuters analyst poll of HK$1.15 billion.
The revaluation loss on investment properties reflected “a challenging retail rental outlook”, Hysan’s chairman Irene Yun Lien Lee said in a statement.
The developer said the total turnover from its retail portfolio, including its flagship Hysan Place, Lee Gardens and Lee Theatre in the bustling Causeway Bay shopping district, went up 3.8 per cent to HK$986 million from a year ago, with the retail segment making up 56 per cent of overall turnover.
Hong Kong’s first-quarter retail sales tumbled 12.5 per cent in the biggest quarterly decline in 17 years, as mainland Chinese tourists abandoned the city’s shopping malls, Disney resort and other theme parks. Still, Hysan said it’s planning to spruce up its existing properties to attract visitors.
“Over the next six months, we will open a number of reasonably priced but interesting restaurants within our properties to further enhance the Lee Gardens experience,” Lee said.
Hysan’s full-year results will be “steady”, as the majority of leases that expire in 2016 have already been committed, she said. It plans to pay an interim dividend of 26 HK cents per share, compared with last year’s 25 HK cents per share.
Hysan’s shares have risen 19 per cent in the past six months. The Hong Kong Stock Exchange today suspended trading after typhoon Nida made landfall in the city.
Signs of recovery for Hong Kong’s ailing retail sector, which relies heavily on tourism spending, are still not on the horizon yet, as the city’s luxury retail rents could tumble 20 per cent by next year, according to a forecast by UBS AG.
(Amends headline and first paragraph in published article to reflect Hysan’s underlying profit beat analysts’ estimates.)