Hong Kong’s Henderson Land reports lower first-half profit, says global headwinds, Covid-19 curbs make for sombre outlook
- Lower underlying profit mainly because of the absence of a one-off gain developer recognised last year
- Firm hopes that Hong Kong will soon resume quarantine-free travel, which will bode well for economy, property market, chairmen say
The lower underlying profit was mainly because of the absence of a one-off gain it recognised last year from Miramar Hotel and Investment Company becoming a Henderson Land subsidiary in 2020, according to a filing with the Hong Kong stock exchange.
Amid the coronavirus pandemic, Russia’s invasion of Ukraine, geopolitical tensions between China and the US, and interest rate increases caused by widespread inflation in various major economies, “there is increasing fear that a worldwide recession is imminent”, Lee Ka Kit and Lee Ka Shing, Lee Shau-kee’s sons and Henderson Land’s chairmen, said in a statement on Tuesday.
In the first half of this year, the developer’s contracted sales in Hong Kong and mainland Chinese amounted to about HK$27.9 billion, of which HK$12.2 billion will be recognised in the second half upon completion of development and handover to buyers.
Henderson Land is one of the most prolific buyers of land in Hong Kong. It currently owns 25 million sq ft in the city and is looking to acquire more projects in various districts.
Henderson Land said it planned to invest HK$63 billion in the site and will develop three blocks on the property. Two of these will be office buildings and the one closest to the harbourfront will be multifunctional.
Meanwhile, Henderson Investment, which runs department stores in Hong Kong, said Covid-19 restrictions severely impacted operations with profit falling by 20 per cent to HK$24 million. The unit declared a dividend of HK$0.01 per share. Its shares declined by about 1.5 per cent on Tuesday.