Henderson’s interim profit more than doubles in Hong Kong’s real estate boom
Henderson Land Development’s interim earnings more than doubled, as booming sales in the world’s most expensive real estate market helped meet its full-year sales target within six months, and bolstered its bottom line.
Underlying profit, excluding revaluation gains on investment properties jumped to HK$10.73 billion (US$1.37 billion) in the first six months, from last year’s HK$4.78 billion, according to a statement to Hong Kong’s stock exchange. Net profit, taking into account a revaluation gain of HK$3.15 billion, rose 64 per cent to HK$14.15 billion.
Analysts were expecting net income of between HK$5.3 billion to HK$7.6 billion. Basic earnings per share rose to HK$3.54.
Hong Kong’s residential property prices have surged 13 months in a row, making the city the world’s most expensive urban centre to live in. Record property prices have boosted Henderson’s sales proceeds, allowing the developer to meet its full year sales target in the first half. Sales more than doubled to HK$13.26 billion during the first half, from last year’s HK$6.23 billion, while gross rental rose 3 per cent to HK$3.31 billion.
Henderson’s impressive interim performance was the result of surging home prices, chalked up one price record after another in the past year, said Hong Kong Institute of Investors chairman Ricky Tam.
Henderson said it would pay an interim dividend of HK$0.48, up 14.3 per cent from last year’s HK$0.42.
The developer is seizing on Hong Kong’s blazing property market to put 1,900 apartment units on the market over the next four months, with 300,000 square feet of commercial office space for sale in the second half.
Henderson, controlled by the family of magnate Lee Shau-kee, is the largest owner of farmland in the New Territories, with 44.9 million sq ft of land reserves. It has a land bank of 24.2 million sq feet in Hong Kong, and stakes of between 80 to 100 per cent in 45 urban redevelopment projects representing about 4 million sq ft in gross floor area in the city.
Henderson sold the Newton Inn in North Point, and the soon-to-be-completed Newton Place Hotel for about HK$3.25 billion, incorporating the proceeds in the second-half financial report.