HIGHLIGHTS OF 2019 INTERIM RESULTS

For the six months ended 30 June

2019

2018

unaudited

unaudited

Note

HK$ million

HK$ million

Change

Property sales

1

4,885

-53%

-

Revenue

10,323

-

Pre-tax profit contribution

1,2

1,107

3,994

-72%

Property leasing

1

4,589

+3%

-

Gross rental income

4,454

-

Pre-tax net rental income

1

3,585

3,534

+1%

Profit attributable to equity shareholders

-

Underlying profit

3

6,702

13,859

-52%

-

Reported profit

7,515

15,030

-50%

HK$

HK$

Earnings per share

3,4

1.38

-52%

-

Based on underlying profit

2.86

(restated)

-

Based on reported profit

4

1.55

3.10

(restated)

-50%

Interim dividend per share

0.50

0.50

No change

At 30 June

At 31 December

2019

2018

unaudited

audited

HK$

HK$

Change

Net asset value per share

4

65.00

64.69

(restated)

+0.5%

Net debt to shareholders' equity

24.2%

22.4%

+1.8

percentage

points

Million

Million

Properties in Hong Kong

square feet

square feet

Land bank (attributable floor area)

5

14.5

-

Properties under development

14.4

-

Unsold units from major launched projects

0.8

1.0

Sub-total:

15.3

15.4

-

Completed properties (including

hotels)

9.4

for rental

Total:

9.3

24.7

24.7

New Territories land (attributable land area)

45.9

45.6

Properties in Mainland China

Land bank (attributable floor area)

32.6

-

Properties held for/under development

32.0

-

Completed stock for sale

0.8

0.4

-

Completed properties for rental

6.4

6.4

39.8

38.8

CHAIRMAN'S STATEMENT HIGHLIGHTS

For the six months ended 30 June 2019, the Group's reported profit attributable to equity shareholders decreased by 50% period-on-period to HK$7,515 million. Excluding the fair value change of investment properties and investment properties under development, the Group's underlying profit (Note 3) attributable to equity shareholders decreased by 52% period-on-period to HK$6,702 million. The decrease in profit was mainly due to the fact that an aggregate underlying profit contribution of about HK$8,389 million was recognized in the same period of last year from the disposal of the equity interests in the entire development project at Kwun Chui Road, Tuen Mun, as well as the office tower at King Wah Road, North Point. As regards the property sales to be accounted for in this financial year, the relevant properties are mostly scheduled for completion and delivery to buyers in the second half of 2019 and the corresponding profit contributions will be reflected in the final results of this financial year.

During the period under review, the Group continued to replenish its development land bank in Hong Kong through diversified means and encouraging progress was achieved: (1) Two residential sites in Kai Tak Development Area were secured jointly with other developers, adding an aggregate gross floor area of over 0.3 million square feet in attributable terms to its land bank; and (2) The Group acquired further New Territories land lots of about 0.3 million square feet, increasing its land reserves in the New Territories to approximately 45.9 million square feet, which represents the largest holding among all property developers in Hong Kong. Turning to mainland China, a development project was secured in Beijing and Hefei respectively, adding an aggregate gross floor area of about 1.1 million square feet in attributable terms to the Group's land bank.

The following three major income pillars of the Group have been progressing well:

As regards "property sales", three development projects are in the pipeline for sale launch in the second half of this year. Together with unsold stocks, a total of about 1,400 residential units and 250,000 square feet of industrial/office space in Hong Kong will be available for sale in the second half of 2019. As at the end of June 2019, cumulative proceeds from the sales of Hong Kong properties, but not yet accounted for, amounted to approximately HK$21,521 million in attributable terms. In addition, the Group entered into an agreement in July 2019 to sell its equity interest in the company holding Wo Shang Wai project for a consideration of HK$4,705 million (subject to adjustments). The profit arising from the sale may be accounted for in or before January 2020 upon completion of the transaction. Turning to mainland China, the Group will continue to look for investment opportunities in the first-tier cities, as well as the major second-tier cities and the Greater Bay Area. In addition, the Group will strengthen co-operation with local property developers.

As regards "rental business", the successive completion or opening of various developments in the second half of 2019 (including "H Zentre" at Middle Road, the office redevelopment project at Electric Road and the "Citygate Outlets" extension in Tung Chung, all in Hong Kong, as well as "Lumina Guangzhou" Phase I in Haizhu Square of mainland China) will expand the Group's rental portfolio to 9.4 million and 8.2 million square feet in attributable gross floor area, respectively, in Hong Kong and on the mainland at the end of 2019. Together with other landmark projects in the pipeline, including the office development at Murray Road in Hong Kong as well as "Lumina Shanghai" in Xu Hui Riverside Area of mainland China, the Group's rental portfolio will grow further with a more optimal composition.

The "associates", namely, Hong Kong and China Gas, Miramar and Hong Kong Ferry, serve as another steady recurrent income stream to the Group. Hong Kong and China Gas, in particular, has 260 projects on the mainland, spread across 26 provinces, autonomous regions and municipalities. With a total of over 30 million piped-gas customers in Hong Kong and mainland China, as well as its expanding scope of businesses, its contributions to the Group are promising.

With the above three major business pillars (namely, "property sales", "rental business" and "associates"), strong balance sheet and seasoned management team, the Group is well-placed to tackle challenges ahead. Barring unforeseen circumstances, operational performance of the Group is expected to be stable for the current financial year.

Lee Ka Kit

Lee Ka Shing

Chairman

Chairman

Hong Kong, 21 August 2019

Note 1: This amount includes the Group's attributable share of contributions from subsidiaries, associates and joint ventures ("JVs").

Note 2: If the fair value change of the related properties is excluded, the pre-tax underlying profit contribution for the year ended 30 June 2019 should be HK$1,107 million (2018: HK$4,113 million).

Note 3: Excluding the Group's attributable share of fair value change (net of tax) of the investment properties held by subsidiaries, associates and JVs.

Note 4: The earnings per share were calculated based on the weighted average number of shares as adjusted for the effect of the bonus issues under Hong Kong Accounting Standard 33, "Earnings Per Share". The net asset value per share at 30 June 2019 was calculated based on the number of issued shares outstanding at 30 June 2019, whilst the net asset value per share at 31 December 2018 was calculated based on the number of issued shares outstanding at 31 December 2018 and as adjusted for the bonus issue effected in 2019.

Note 5: Including the total attributable developable area of about 4.4 million square feet from the projects in Fanling North and Wo Shang Wai, which are subject to finalisation of land premium. After the end of the reporting period, an agreement was entered into in relation to the disposal of Wo Shang Wai project. This transaction is pending for completion.

The information in this advertisement does not constitute a statutory results announcement. The results announcement is available on the Company's website at www.hld.comand on Hong Kong Exchanges and Clearing Limited's HKEXnews at www.hkexnews.hk.

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Henderson Land Development Company Ltd. published this content on 21 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 August 2019 10:22:03 UTC