Hong Kong company reporting season

Hong Kong developer Sino Land reports flat earnings growth

Property sales revenue fell 50.48 per cent as the city’s housing market slowed

PUBLISHED : Wednesday, 24 August, 2016, 7:06pm
UPDATED : Wednesday, 24 August, 2016, 10:14pm

Hong Kong developer Sino Land reported 0.9 per cent growth in underlying earnings for the full year ended June 30 reflecting a modest slippage in the completion of property projects.

Underlying earnings, excluding fair-value changes on investment properties, amounted to HK$5.35 billion, against HK$5.3 billion in the preceding year.

The result is in line with the forecast range of between HK$5.23 billion and HK$5.42 billion made by Macquarie and Bocom International Securities, citing the modest slippage in profit booked from various projects such as Cluny Park in Mid-Levels West.

Sino Land, chaired by Singaporean Robert Ng Chee Siong, said its net profit, which includes property valuation gains, fell 24.34 per cent to HK$7.09 billion. The revaluation gains fell to HK$1.74 billion, compared with HK$4.07 billion in the preceding year.

Total revenue from property sales for the full year, including property sales of associates and joint ventures, fell 50.48 per cent to HK$11.44 billion, against 2015’s HK$23.1 billion. Analysts expect property sales will continue to fall next year amid the slowdown of the city’s property market.

“The Hong Kong property market continues to consolidate as a result of economic and property-related policies. Both sales volume and value showed a decrease during the financial year

when compared to a year ago,” said Ng.

The Hong Kong property market continues to consolidate as a result of economic and property-related policies
Robert Ng Chee Siong, Sino Land chairman

“With a good financial position, the company is well-positioned to respond to challenges ahead,” he added.

As of June 30, 2016, the company had cash and bank deposits of HK$27.44 billion. Excluding total borrowings of HK$4.4 billion, the company had net cash of HK$23 billion.

DBS said in a research report earlier this month that with its strong cash flow Sino Land is well poised to make sizeable value-accretive acquisitions when opportunities knock.

Its projects, Commune Modern in Fanling, The Spectra in Yuen Long, The Mediterranean in

Sai Kung and Botanica Bay in Cheung Sha, will support Sino Land’s near-term development earnings.

Directors declared a final dividend of 38 HK cents per share. Together with the interim dividend of 13 HK cents per share, the total dividend for the year is 51 HK cents per share, up from 50 HK cents a year ago .

Net rental income increased 2.8 per cent to HK$3.34 billion.

The company has a total land bank of 32.3 million square feet as of June in Hong Kong, China, Singapore and Sydney. Shares of Sino Land fell 0.43 per cent to HK$13.8 on Wednesday, but the stock has risen 28.38 per cent in the past 12 months.

Separately, its holding company Tsim Sha Tsui Properties posted a net profit of HK$3.62 billion, down 23.7 per cent from that of the preceding year.

Its hotel unit Sino Hotels reported a net profit of HK$165.5 million, down 19.11 per cent from 2015.