Henderson Land Development said yesterday its second interim net profit fell 64 per cent as the company failed to take advantage of a rebound in property prices. The third-largest developer in Hong Kong by market value said profit attributable to shareholders fell to HK$5.54 billion from HK$15.47 billion for the financial year to June last year. The company faced a decline in property sales and in the value of its investment portfolio despite the healthier outlook for the city's real estate market. 'The results were below the market's expectation,' said Adrian Ngan Wai-hung, the executive director of CCB International Securities' research department. 'The launch of units in Hong Kong was slower than expected and the company did not catch the wave of the market rebound.' According to Centaline Property Agency, average home prices rose 24.83 per cent from December last year. Earnings per share were HK$2.58, against HK$7.54 in the preceding year. There was a HK$190 million drop in the fair value of Henderson Land's investment properties, against a gain of HK$6.7 billion previously. Underlying profit, excluding investment revaluation items, fell 38 per cent to HK$3.51 billion from HK$5.7 billion. Based on the underlying profit, earnings per share were HK$1.64, down from HK$2.78. This was the company's second unaudited interim results because it changed its financial year-end from June 30 to December 31. The company would treat the 18 months to December as its complete 2009 results, it said in March. Henderson's revenue from property sales in Hong Kong plunged 56 per cent to HK$4.9 billion from a year earlier. Net rental income from offices and complexes, including the International Finance Centre, rose 8 per cent to HK$2.94 billion, it said. Chairman Lee Shau-kee said: 'Low mortgage rates, better affordability from improving economic fundamentals, rising inflation expectations and tight primary housing supply in the pipeline should all lend support to the residential market.' He said new luxury developments, in particular, were expected to enjoy continued strong demand from affluent mainlanders and overseas Chinese interested in acquiring the right of abode in Hong Kong by investing in local properties. The company would launch upmarket developments including 39 Conduit Road at Mid-Levels, Hill Paramount in Sha Tin, a project at Headland Road in Island South and the Beverly Hills Phase 3 in Tai Po in the second half of this year. Subsidiary Henderson Investment posted a net profit of HK$102 million for the 12 months to June, down 100 per cent year on year.