HNA’s Hong Kong-listed subsidiary reports net profit plunged 96pc in 2017
HNA Group’s Hong Kong-listed unit reported its net profit plunged 96 per cent in 2017, citing headwinds that include a sharp increase in interest expenses coupled with falling income from property development and its foundation piling business.
Hong Kong International Construction Investment Management (HKICIM), in which HNA Group is a majority shareholder, said turnover edged up 8.6 per cent to HK$3.29 billion (US$419.5 million) last year, according to the company’s filing to the Hong Kong stock exchange. HKICIM said its 2017 profit was HK$6 million, compared to HK$134 million in 2016.
In February, HNA Group pledged 40.98 per cent of the shares of HKICIM to PAG Holdings as security for a loan. Before the move, HNA held 74 per cent in HKICIM.
The move comes amid fundraising efforts by the group to pay down debt, including the sale of two plots of land in Hong Kong to Henderson Land Development last month.
But HKICIM’s finance cost doubled to HK$18.5 million last year from HK$9.06 million in 2016, the company said.
Still, HKICIM announced it will pay a final dividend of 10 HK cents in 2017, the same as in 2016.
The company said it sold the residential site, New Kowloon Inland No 6564, at Kai Tak area to Wheelock & Co for HK$6.35 billion in March. The deal is expected to be completed on or before May 16.
The company said it has received HK$1.36 billion from HKICIM Fund II and HKICIM Fund III which sold the New Kowloon Inland Lot No 6565 and the adjacent site, Lot No 6562, to Henderson Land Development for HK$16 billion in February.
HKICIM has 12.07 per cent in Fund II and 16.57 per cent in Fund II.
The company is still holding the site, named New Kowloon Inland Lot 6563, which it won for HK$5.53 billion in January 2017.
HKICIM said its net debt amounted to HK$3.8 billion with a net debt to equity ratio of 31 per cent as at December, 2017.