TIDMHKLD TIDMJDS TIDMJAR
RNS Number : 1129F
Hongkong Land Hldgs Ltd
05 March 2020
To: Business Editor 5th March 2020
For immediate release
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
HONGKONG LAND HOLDINGS LIMITED
2019 PRELIMINARY ANNOUNCEMENT OF RESULTS
Highlights
-- Underlying profit up 4% to a record US$1,076 million
-- Net asset value per share stable
-- Large strategic mixed-use site secured in Shanghai
-- Six other new projects acquired including five in the Chinese mainland
"The Group's results in 2020 will be impacted by the COVID-19
outbreak, with the performance of Development Properties in the
Chinese mainland and the Group's retail properties expected to be
most affected. The extent of the impact will be dependent on the
duration and geographic extent of the outbreak. Stable
contributions are expected from the Group's other businesses,
although there are expected to be higher financing costs."
Ben Keswick
Chairman
Results
Year ended 31st December
2019 2018 Change
US$m US$m %
Underlying profit attributable to
shareholders(*) 1,076 1,036 +4
Profit attributable to shareholders 198 2,457 -92
Shareholders' funds 38,247 38,342 -
Net debt 3,591 3,564 +1
---------------------------------------------- -------- ------- -------
USc USc %
---------------------------------------------- -------- ------- -------
Underlying earnings per share(*) 46.12 44.24 +4
Earnings per share 8.48 104.92 -92
Dividends per share 22.00 22.00 -
---------------------------------------------- -------- ------- -------
US$ US$ %
---------------------------------------------- -------- ------- -------
Net asset value per share 16.39 16.43 -
---------------------------------------------- -------- ------- -------
* The Group uses 'underlying profit attributable to shareholders'
in its internal financial reporting to distinguish between
ongoing business performance and non-trading items, as more
fully described in note 28 to the financial statements. Management
considers this to be a key measure which provides additional
information to enhance understanding of the Group's underlying
business performance.
The final dividend of USc16 per share will be payable on 13th
May 2020, subject to approval at the Annual General Meeting to be
held on 6th May 2020, to shareholders on the register of members at
the close of business on 20th March 2020.
HONGKONG LAND HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEARED 31ST DECEMBER 2019
OVERVIEW
Hongkong Land achieved a further year of record underlying
profit in 2019. P rofits from the Group's Investment Properties
businesses remained stable despite the social unrest in Hong Kong,
whilst a higher contribution from the Development Properties
business in the Chinese mainland was partially offset by lower
contributions from other markets. Good progress was made during the
year in acquiring new sites and, since the year end, the Group
acquired a strategic large mixed-use Investment Property site in a
prime location in Shanghai. The performance of the Group's
Development Properties business in the Chinese mainland and the
impact of rent relief on the Group's retail properties,
particularly in Hong Kong, will depend on the length and impact of
the COVID-19 outbreak.
PERFORMANCE
Underlying profit attributable to shareholders rose 4% to
US$1,076 million.
Including net losses of US$878 million resulting primarily from
lower valuations of the Group's investment properties, the profit
attributable to shareholders was US$198 million. This compares to
US$2,457 million in 2018, which included net gains of US$1,421
million arising from revaluations.
The net asset value per share at 31st December 2019 was
US$16.39, compared with US$16.43 at the end of 2018.
The Directors are recommending a final dividend of USc16.00 per
share, providing a total dividend for the year of USc22.00 per
share, unchanged from last year.
GROUP REVIEW
Investment Properties
In Hong Kong, office leasing activities in Central were slower
in 2019 compared to the prior year as a result of uncertainties
caused by the China-US trade negotiations and the social unrest in
Hong Kong, although performance of the Group's Central office
portfolio continues to be resilient. Vacancy at the end of 2019 was
2.9% on both a physical and committed basis. At the end of 2018,
office vacancy was 1.4%. Rental reversions remained positive, with
average office rents increasing from HK$113 per sq. ft in 2018 to
HK$118 per sq. ft in 2019.
The Group's Central retail portfolio remains effectively fully
occupied and delivered a respectable performance over the Christmas
period following several challenging months for the retail market
in the city. Despite positive base rental reversions, however, the
average retail rent in 2019 decreased to HK$222 per sq. ft from
HK$233 per sq. ft in 2018, due to temporary rent relief and a
decline in turnover rent. The portfolio retains its reputation as
Hong Kong's premier shopping destination.
The value of the Group's Hong Kong Investment Properties
portfolio decreased by 2% compared to the prior year, due to lower
open market rents.
In Singapore, vacancy in the Group's office portfolio was 5.0%
at the end of 2019, compared with 2.5% at the end of 2018. On a
committed basis, vacancy was 0.7%. Rental reversions were positive,
with average rents increasing to S$9.7 per sq. ft in 2019 from
S$9.2 per sq. ft in 2018.
In Beijing, WF CENTRAL is performing in line with expectations.
Its hotel component, Mandarin Oriental Wangfujing, which opened in
March 2019 is already positioned as one of the leading luxury
hotels in the market.
Planning of the Group's 49%-owned prime mixed-use retail and
Grade A office development in the central business district of
Bangkok in Thailand continues on schedule. The development is
expected to complete in 2025.
In February 2020, the Group acquired a prime, predominantly
commercial site along the Huangpu River in the Xuhui District of
Shanghai. The Project mainly comprises office and retail space,
with a developable area of 1.1 million sq. m, and will be developed
in multiple phases to 2027.
Development Properties
2019 was a solid year for the Group's Development Properties,
building on a strong year in 2018, with a higher contribution from
the Chinese mainland partially offset by lower contributions from
other markets.
In the Chinese mainland, sentiment in the Group's core markets
remained broadly stable. Higher sales completions led to an
increase in profit contribution, whilst the Group's attributable
interest in contracted sales at US$1,868 million was 18% higher
than 2018 due to a change in sales location mix. At 31st December
2019, the Group had an attributable interest of US$1,860 million in
sold but unrecognised contracted sales, compared with US$1,358
million at the end of 2018.
During the year, the Group acquired five new residential sites
in the Chinese mainland - all in cities where it already has a
presence - with a wholly-owned project in each of Chongqing and
Hangzhou, and joint ventures in each of Chongqing, Shanghai and
Wuhan. The Group's effective interest in these projects equates to
a developable area of 547,000 sq. m.
In Singapore, recognised profits in 2019 were lower than the
prior year, which benefited from the recognition of profits on
completion of the 1,327-unit Sol Acres executive condominium
development. Pre-sales at the 309-unit Margaret Ville and the 1,404
unit Parc Esta projects were within expectations, with construction
of both projects scheduled to complete by 2021. The planning of the
638-unit Leedon Green project (previously known as "Tulip Garden")
continues to progress well, with the project's sales launch having
commenced in January 2020.
The Group's joint venture projects in the rest of Southeast Asia
performed within expectations, including the completion of Two
Roxas Triangle in the Philippines in 2019. During the year, the
Group acquired a 49% interest in a prime residential site in
Bangkok with a developable area of 64,000 sq. m.
Financing
The Group's financial position remains strong with net debt of
US$3.6 billion at 31st December 2019, broadly unchanged from the
end of 2018. Net gearing at the end of the year remained unchanged
at 9%.
Net debt will increase in 2020 as payments are made for land
purchases to which the Group has already committed. The newly
acquired commercial site in Shanghai will be funded by internal
resources and external funding with no recourse to
shareholders.
PEOPLE
On behalf of the Board, I would like to thank all of our staff
for their ongoing dedication and professionalism in providing high
quality services and offerings to our tenants and customers, as
well as for their commitment in driving the Group's success.
Charles Allen-Jones stepped down as a Director on 8th May 2019
and Simon Keswick retired from the Board on 1st January 2020. On
20th January 2020, it was announced that Lord Sassoon will retire
from the Board on 9th April 2020. We would like to record our
gratitude to all of them for their significant contributions to the
Group over many years.
As separately announced on 5th March 2020, with effect from 15th
June 2020 the roles of Chairman and Managing Director, which are
currently held on a combined basis by Ben Keswick, will be
separated. Ben Keswick will remain as Chairman and John Witt will
join the Board and take on the role of Managing Director of the
Company.
OUTLOOK
The Group's results in 2020 will be impacted by the COVID-19
outbreak, with the performance of Development Properties in the
Chinese mainland and the Group's retail properties expected to be
most affected. The extent of the impact will be dependent on the
duration and geographic extent of the outbreak. Stable
contributions are expected from the Group's other businesses,
although there are expected to be higher financing costs.
Ben Keswick
Chairman
CHIEF EXECUTIVE'S REVIEW
Hongkong Land achieved a further year of record underlying
profit in 2019 with stable contributions from Investment Properties
and higher contributions from Development Properties. The Group
continues to invest for future growth whilst maintaining a strong
balance sheet.
The Group's performance to date in 2020 has been affected by the
COVID-19 outbreak, which has resulted in a temporary halt in
development activities in the Chinese mainland and lower turnover
at its retail properties, including the LANDMARK in Hong Kong. It
remains too early to quantify the impact of COVID-19 and the
current social unrest in Hong Kong, although the Group remains
confident in the long-term outlook of the markets in which it
operates.
STRATEGY
Hongkong Land is a landlord and a developer in Greater China and
Southeast Asia. The Group operates a portfolio of prime investment
properties which it develops and holds as long-term investments, as
well as developing premium residential and commercial properties
for sale.
The Group's Investment Properties are predominantly commercial
in nature and located in core business districts of key Asian
gateway cities, with a concentration in Hong Kong and Singapore.
Returns principally arise from rental income and long-term capital
appreciation. The Investment Properties segment is the largest
contributor to the Group's earnings given its relative size and
maturity. It accounted for 87% of the Group's gross assets at the
end of 2019 (2018: 88%) and contributed 61% of the Group's
underlying operating profit before corporate expenses in 2019
(2018: 64%).
The Group's Development Properties are primarily premium
residential and mixed-use developments, located in the Chinese
mainland and Singapore, with a growing presence in other Southeast
Asian markets. Returns principally arise from trading profits in
respect of the immediate sale of the residential and office
components, and rental and trading profits for certain commercial
elements of mixed-use sites that are disposed of, or reclassified
to Investment Properties, after rents have stabilised. Development
Properties accounted for 13% of the Group's gross assets at the end
of 2019 (2018: 12%) and 39% of the Group's underlying operating
profit before corporate expenses in 2019 (2018: 36%).
Geographically, Greater China generates the bulk of the Group's
earnings. Hong Kong, which comprises predominantly Investment
Properties, accounted for 51% of the Group's underlying operating
profit before corporate expenses (2018: 54%), whilst the Chinese
mainland, which comprises predominantly Development Properties,
accounted for 32% (2018: 26%).
The Investment Properties portfolios in Hong Kong and Singapore
provide a stable stream of recurring earnings and balance sheet
strength that enables the Group to pursue new opportunities in both
its Investment Properties and Development Properties businesses in
its key markets. During 2019, the Group's share of capital
allocated to new investments totalled US$1.2 billion (2018: US$2.3
billion). The pace of new investments up to the end of 2020 is
expected to moderate compared to recent years, following the
acquisition of a large predominantly commercial site in Shanghai in
February 2020.
Hong Kong Investment Properties
In Hong Kong, the Group's Central Portfolio consists of 12
interconnected prime commercial buildings forming the heart of the
financial district in Central, providing over 450,000 sq. m. of
Grade A office and luxury retail space . This integrated mixed-use
development is positioned as the pre-eminent office, luxury retail,
restaurant and hotel accommodation in Hong Kong, and continues to
attract both prime office tenants and luxury retailers in addition
to housing the acclaimed Landmark Mandarin Oriental hotel.
Hong Kong's positioning as one of Asia's main financial and
business hubs, combined with the scarcity of supply of high quality
space in Central and the unique qualities of the Group's portfolio,
together continue to support low vacancy and strong rents. Hong
Kong continues to possess unique advantages as a financial centre
that are not easily replicated.
The Group's 54,000 sq. m. retail portfolio is integrated with
its office buildings to create part of the Group's distinctive and
successful mixed-use business model. Its tenants include numerous
global luxury brand flagship stores, as well as a number of leading
restaurants. LANDMARK is firmly established as the iconic luxury
shopping and fine dining destination in Hong Kong. Its success
depends on the health of the broader Hong Kong economy as well as
on Hong Kong remaining an attractive destination for affluent
visitors from the Chinese mainland. The Group will work to ensure
that, despite the challenging conditions, it will remain the clear
market leader in Central in which global luxury brands will
continue to be represented.
Other Investment Properties
Outside Hong Kong, the Group has similarly established itself as
a leading provider of prime office and retail space.
In Singapore, Hongkong Land's attributable interests totalling
165,000 sq. m., principally concentrated in the Marina Bay Area,
include some of the finest Grade A office space in the market. In
the Chinese mainland, the Group's 49,000 sq. m. WF CENTRAL complex
in Beijing is positioned as a premium retail and lifestyle
destination, and includes a recently-opened Mandarin Oriental hotel
that has quickly established itself as one of the most exclusive
hotels in the city. In Indonesia, the Group has attributable
interests of over 100,000 sq. m. of Grade A office space through
its 50%-owned joint venture, Jakarta Land. In Cambodia, the Group's
EXCHANGE SQUARE complex comprises 25,000 sq. m. of office and
retail space in the heart of Phnom Penh.
Our performance in these markets depends on the levels of demand
for, and supply of, prime office and luxury retail space, both of
which are influenced by global and regional macro-economic
conditions. The Group is committed to maintaining excellence in
product quality and service to retain and attract tenants and
customers, and will continue to seek new opportunities to develop
prime investment properties in key Asian gateway cities.
Development Properties
The Group has established a strong and profitable Development
Properties business focusing primarily on the premium residential
market segment in the Chinese mainland and Southeast Asia. While
the capital invested in this business is significantly lower than
in Investment Properties, the earnings derived from Development
Properties enhances the Group's overall profits and returns on
capital. The Group's attributable interest in the developable area
of its projects at the end of 2019 totalled 9.0 million sq. m.,
compared to 9.3 million sq. m. at the end of 2018. Of this,
construction of approximately 37% had been completed at the end of
2019, compared to 36% at the end of 2018.
Annual returns from Development Properties fluctuate due to the
nature of the projects and the Group's accounting policy of
recognising profits on sold properties on completion in a number of
markets including the Chinese mainland. Demand is also dependent on
overall economic conditions, which can be significantly affected by
government policies and the availability of credit. Ongoing land
acquisitions are necessary to build and maintain a stable income
stream over the longer term.
REVIEW OF INVESTMENT PROPERTIES
Profits from Investment Properties in 2019 were broadly
unchanged from 2018, as positive base rental reversions in Hong
Kong and Singapore were offset by temporary retail rent relief in
Hong Kong.
Hong Kong
Demand in the Hong Kong office leasing market slowed during the
year as a result of uncertainties caused by the ongoing China-US
trade negotiations and the social unrest experienced in Hong Kong.
At the end of 2019, vacancy at the Group's Central office portfolio
was 2.9% on both a physical and committed basis. At the end of
2018, office vacancy was 1.4%. Vacancy for the overall Central
Grade A market was 3.6% at the end of 2019, compared to 1.8% at the
end of 2018. The Group's average office rent in 2019 was HK$118 per
sq. ft, an increase from last year's average of HK$113 per sq. ft.
Financial institutions, legal firms and accounting firms occupy 79%
of the Group's total leased office space. The weighted average
lease expiry of the office portfolio at the end of 2019 stood at
4.7 years (2018: 4.0 years), reflecting efforts made over recent
years to extend the leases of major tenants.
The Group's retail portfolio in Hong Kong was negatively
impacted in the second half of the year by weakened sentiment in
the luxury retail market as a result of the social unrest, although
it remained effectively fully occupied at 31st December 2019.
Despite positive base rental reversions, the average retail rent in
2019 decreased to HK$222 per sq. ft from HK$233 per sq. ft in 2018
due to temporary rent relief provided to tenants and lower turnover
rent. Excluding temporary rent relief this figure was HK$236 per
sq. ft.
In October 2019, the Group successfully launched CENTRICITY, a
suite of market leading digital and physical services exclusively
available to the Group's tenants in Hong Kong. The core elements
include a mobile app which provides tenants with access to
promotions, events and concierge services, a flexible event space
which can accommodate up to 200 guests, and a restaurant providing
both on-the-go meals and formal dining service. In addition, the
Group also launched a new 5,000 sq. ft. salon which provides its
BESPOKE loyalty programme members with personalised experience and
services.
The value of the Group's Investment Properties portfolio in Hong
Kong at 31st December 2019, based on independent valuations,
declined by 2% to US$31.5 billion, due to slightly lower open
market rents, with no change in capitalisation rates.
Singapore
The Singapore office leasing market continued to improve in
2019. Overall vacancy across the entire Grade A central business
district was 4.2% as at the end of 2019, compared to 7.2% at the
end of 2018. The Group's office portfolio continued to perform
well, reflecting its high quality and unique positioning. The
Group's average office rent in 2019 was S$9.7 per sq. ft, an
increase from S$9.2 per sq. ft in the previous year, due to
positive rental reversions. Vacancy was higher at 5.0% at the year
end, compared to 2.5% at the end of 2018, although this will
decline as committed space is taken up in 2020: vacancy on a
committed basis is 0.7%. Financial institutions, legal firms and
accounting firms occupy 78% of the Group's total leased office
space. The weighted average lease expiry of the office portfolio at
2019 year end stood at 4.4 years (2018: 3.9 years).
Chinese Mainland
In Beijing, the retail component of WF CENTRAL performed within
expectations. The 73-room Mandarin Oriental Wangfujing opened in
March 2019 and has received overwhelmingly positive reviews.
In February 2020, the Group acquired a large strategic
predominantly commercial mixed-use site in a prime location in the
Xuhui District of Shanghai, with a developable area of 1.1 million
sq. m. Construction is expected to commence in 2020, with
completion in multiple phases between 2023 to 2027.
Other Investment Properties
At One Central Macau, retail occupancy was 92%, unchanged from
the prior year. Tenant sales declined by 9% due to softening
sentiment in the luxury retail market. Rental reversions were
negative during the year, with average rent declining from MOP213
per sq. ft in 2018 to MOP207 per sq. ft in 2019.
In Jakarta, the office portfolio remains resilient despite the
continued surplus of city-wide office supply. Occupancy was 77% at
the end of 2019, compared to 70% at the end of 2018, as efforts
continue to lease the newest office tower, WTC3, which was 89%
committed as at the end of 2019. The average gross rent was US$25.3
per sq. m. in 2019, compared to US$25.7 per sq. m. in the prior
year.
In Phnom Penh, EXCHANGE SQUARE, the Group's 25,000 sq. m. prime
mixed-use complex in the heart of the city's emerging financial
district, continues to be taken up by tenants, and was 91% occupied
at the end of 2019, compared to 85% at the end of 2018.
In Bangkok, planning of the Group's 49%-owned prime commercial
joint-venture development in the central business district, secured
in late 2017, continues in line with schedule. This development has
a developable area of 440,000 sq. m. and is expected to complete in
2025.
Performances at the Group's other investment properties were
within expectations.
REVIEW OF DEVELOPMENT PROPERTIES
Earnings from the Group's Development Properties segment were
higher in 2019 compared to 2018, due to increased contributions
from the Chinese mainland, which were partially offset by lower
contributions from other markets.
Chinese Mainland
The Group's development properties in the Chinese mainland
comprise 25 projects in seven cities, of which 11 projects are in
Chongqing. As at 31st December 2019, the Group's net investment in
development properties in the Chinese mainland was US$4.1 billion,
compared to US$3.4 billion at the end of 2018.
During the year, the Group acquired two wholly-owned residential
projects in Chongqing and Hangzhou. The Group also secured three
joint venture residential projects, one in each of Chongqing,
Shanghai and Wuhan. The Group already has a presence in all of
these cities.
Market sentiment in the Group's key markets remained stable. The
Group's share of t otal contracted sales in 2019 was US$1,868
million, 18% higher than the US$1,578 million achieved in the prior
year. The Group's attributable interest in revenue recognised in
2019, including its share of revenue in joint ventures and
associates, increased by 12% to US$1,348 million from US$1,207
million in 2018, due to the timing of completions.
At 31st December 2019, the Group's attributable interest in sold
but not yet recognised contracted sales amounted to US$1,860
million, an increase of 37% from US$1,358 million at the end of
2018.
Chongqing, the largest city in western China, remains the most
significant market for the Group, representing some 40% of its
Chinese mainland Development Properties exposure. Including newly
acquired projects during the year, the Group has five wholly-owned
projects in Chongqing - Yorkville South, Yorkville North, River One
(formerly "Bamboo Grove Riverside"), The Pinnacle, and a yet to be
named project in the Central Park area which was acquired in
September 2019 - and six 50%-owned joint ventures: New Bamboo
Grove, Landmark Riverside, Central Avenue, Harbour Tale (formerly
"Lijia Landscape"), Hillview, and a yet to be named project in the
University Town area which was acquired in September 2019.
The newly acquired 100%-owned site in the Central Park area has
a total developable area of 133,000 sq. m. and will be developed in
one phase, whilst the newly acquired 50%-owned site located in
University Town has a total developable area of 318,000 sq. m. and
will be developed over two phases. Both projects are primarily
residential and are expected to complete in 2022.
The Group's attributable interest in 2019 revenue from property
sales in Chongqing, including its share of revenue in joint
ventures and associates, increased by 6% to US$1,077 million, from
US$1,015 million in 2018, due to the timing of completions. The
Group's attributable interest in the developable area of its
Chongqing projects at the end of 2019 totalled 4.1 million sq. m.,
compared to 4.5 million sq. m. at the end of 2018. Of this,
construction of approximately 58% had been completed at the end of
2019, compared to 57% at the end of 2018.
In Hangzhou, the Group's newly acquired 100% primarily
residential site in the Canal New City area of Gongshu District,
with a developable area of 73,000 sq. m., will be developed in one
phase with completion expected in 2022.
In Wuhan, the Group will develop a predominantly residential
site located in the Houguan Lake area. The 66%-owned project has a
developable area of 226,000 sq. m., and will be developed in one
phase with completion expected in 2022.
In Shanghai, the Group will develop a primarily residential site
located in the Huacao area of Minhang District. The 50%-owned
project has a developable area of 64,000 sq. m. and will be
developed in one phase with completion expected in 2022.
In the central business district of Beijing's Chaoyang District,
the Group's 30%-owned Grade A office development of 127,000 sq. m.
remains in the planning phase, with construction expected to
commence in 2021.
Singapore
The Group completed one residential project during 2019, the
wholly-owned 710-unit Lake Grande residential project, which was
fully sold.
The wholly-owned 309-unit Margaret Ville residential project,
with a developable area of 22,000 sq. m., was 81% pre-sold at the
2019 year-end, with completion scheduled in 2021. Construction of
the wholly-owned 1,404-unit Parc Esta residential project, with a
developable area of 98,000 sq. m., is on schedule and is expected
to complete in 2021. As at the end of 2019, 59% of units had been
pre-sold.
The sales launch of the 50%-owned 638-unit Leedon Green
(formerly "Tulip Garden") residential project, with a developable
area of 49,000 sq. m., commenced in January 2020. This joint
venture project will be developed in one phase, with completion
scheduled in 2022.
Other Development Properties
In Indonesia, construction of the Group's residential projects
is progressing well. Nava Park, the Group's 49%-owned joint
venture, is a 68 hectare site in the southwest of Jakarta. Upon
completion in 2031, Nava Park will comprise a mix of landed houses,
villas, mid-rise apartments and low-rise commercial components. Of
the 889 units which have been launched for sale, 82% has been
pre-sold as at the end of 2019.
Asya, a joint venture which includes Astra International, in
which the Group has a 33.5% attributable interest, is a 68 hectare
site located in the east of Jakarta. The project will yield a total
developable area of approximately 874,000 sq. m., comprising landed
houses, villas, apartments and low-rise commercial shophouses. It
will be developed in multiple phases through to 2031. Of the 513
launched units, 44% has been pre-sold as at the end of 2019.
Arumaya, the Group's 40%-owned joint venture with Astra
International, is a 262-unit luxury condominium project located in
South Jakarta. The project has a developable area of 24,000 sq. m.,
and is expected to complete in 2022. All of the units have been
launched as at the end of 2019, with 29% of the units reserved.
Avania (formerly "Gatot Subroto"), the 50%-owned mixed-use
development with Astra International situated in central Jakarta,
will consist of over 650 high-end apartments and a Grade A office
tower. The project has a developable area of 126,000 sq. m. and
will be developed in two phases through to 2025. The sales launch
is expected to commence shortly.
In the Philippines, the 40%-owned Two Roxas Triangle is a
182-unit luxury condominium tower located in Manila's central
Makati area. The development was completed in the first half of
2019 and has been fully sold.
Construction is progressing well at Mandani Bay, a 40%-owned
20-hectare development in Cebu comprising principally residential
units with some office and retail components. The project will be
developed in multiple phases through to 2035. Of the 4,067
residential units which have been launched, 80% were pre-sold at
the end of 2019.
Bridgetowne, a 40%-owned joint venture project with Robinsons
Land, is a two hectare site situated in the Bridgetowne Township in
Pasig City, Manila. The 1,992-unit luxury condominium project has a
developable area of 146,000 sq. m. and will be developed in three
phases through to 2028.
In Vietnam, the Marq, a 70%-owned residential development in
District 1 of Ho Chi Minh City, is a 515-unit luxury residential
tower with a total developable area of approximately 57,000 sq. m.
Construction is progressing on schedule, with completion expected
in 2021. All the units have been launched and 45% have been sold as
at the end of 2019. In October 2019, the Group's proposed
investment in a residential development in District 2 of Ho Chi
Minh City, Thu Thiem River Park, was terminated as certain
conditions precedent were not fulfilled.
In Thailand, the Esse Sukhumvit 36, a 49%-owned 338-unit luxury
condominium tower in the Sukhumvit area of Bangkok, is currently
62% pre-sold. Construction is scheduled to complete in 2020.
Nonthaburi, the Group's 49%-owned joint venture project, is a
1,217-unit luxury landed housing project located in Western
Bangkok. The project has a total developable area of 433,000 sq.
m., and is expected to be developed in four phases through to
2028.
King Kaew, a luxury residential project in which the Group has a
49% interest, is situated on King Kaew Road close to Suvarnabhumi
International Airport. The project has a developable area of
169,000 sq. m. and will comprise 472 villas. It is expected to
complete in 2029.
During the year, the Group secured a 49% interest in a luxury
condominium site on Wireless Road in Bangkok's central business
district. The project has a total developable area of 64,000 sq.
m., and will consist of over 700 units. Development will be in one
phase with completion expected in 2023.
THE YEAR AHEAD
The Group's Investment Properties portfolio will remain the
largest contributor to the Group's earnings. The performance of the
Group's office portfolio is expected to be resilient, while its
retail portfolio will be impacted by rent relief to its tenants. In
the Development Properties business, contributions from the Chinese
mainland are expected to be lower due to delays in sales
completions as a result of the COVID-19 outbreak, while
contributions from Southeast Asia are expected to be broadly
stable. Higher financing costs are anticipated in 2020 due to land
acquisitions.
The Group will continue to deliver world class services and
offerings to our office and retail tenants, and best-in-class
housing to our residential customers, ensuring the highest
standards are upheld. These values are critical to the long-term
success of the Group.
Robert Wong
Chief Executive
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2019
2019 2018
Underlying Non- Underlying Non-
business trading business trading
performance items Total performance items Total
US$m US$m US$m US$m US$m US$m
Revenue (note 2) 2,319.7 - 2,319.7 2,665.4 - 2,665.4
Net operating costs
(note 3) (1,149.3) 34.4 (1,114.9) (1,576.1) 20.1 (1,556.0)
Change in fair value
of
investment properties
(note 7) - (854.2) (854.2) - 1,222.4 1,222.4
Operating profit (note
4) 1,170.4 (819.8) 350.6 1,089.3 1,242.5 2,331.8
Net financing charges
- financing charges (204.8) - (204.8) (170.7) - (170.7)
- financing income 83.4 - 83.4 56.4 - 56.4
(121.4) - (121.4) (114.3) - (114.3)
Share of results of
associates
and joint ventures
(note 5)
- before change in
fair value
of investment properties 272.7 - 272.7 265.1 - 265.1
* change in fair value of
investment properties - (32.6) (32.6) - 188.6 188.6
272.7 (32.6) 240.1 265.1 188.6 453.7
--------- --------- ---------- --------- -------- -----------
Profit before tax 1,321.7 (852.4) 469.3 1,240.1 1,431.1 2,671.2
Tax (note 6) (246.6) (20.5) (267.1) (206.3) (7.8) (214.1)
--------- --------- ---------- --------- -------- -----------
Profit after tax 1,075.1 (872.9) 202.2 1,033.8 1,423.3 2,457.1
--------- --------- ---------- --------- -------- -----------
Attributable to:
Shareholders of the
Company 1,076.4 (878.4) 198.0 1,036.1 1,421.0 2,457.1
Non-controlling interests (1.3) 5.5 4.2 (2.3) 2.3 -
--------- --------- ---------- --------- -------- -----------
1,075.1 (872.9) 202.2 1,033.8 1,423.3 2,457.1
--------- --------- ---------- --------- -------- -----------
USc USc USc USc
Earnings per share
(basic and diluted)
(note 8) 46.12 8.48 44.24 104.92
Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2019
2019 2018
US$m US$m
Profit for the year 202.2 2,457.1
Other comprehensive income/( expense)
Items that will not be reclassified
to profit
or loss:
Remeasurements of defined benefit
plans 2.2 (2.6)
Tax on items that will not be
reclassified (0.4) 0.4
1.8 (2.2)
Items that may be reclassified
subsequently
to profit or loss:
Net exchange translation differences
- net gain/(loss) arising during
the year 166.3 (197.7)
- transfer to profit and loss - 0.3
166.3 (197.4)
Cash flow hedges
- net gain/(loss) arising during
the year 25.7 (2.8)
- transfer to profit and loss (0.6) (2.6)
25.1 (5.4)
Tax relating to items that may
be
reclassified (4.1) 0.9
Share of other comprehensive income/
(expense ) of associates and
joint ventures 29.5 (156.7)
216.8 (358.6)
Other comprehensive income/(expense)
for
the year, net of tax 218.6 (360.8)
----- -------
Total comprehensive income for
the year 420.8 2,096.3
----- -------
Attributable to:
Shareholders of the Company 418.0 2,100.4
Non-controlling interests 2.8 (4.1)
----- -------
420.8 2,096.3
----- -------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
at 31st December 2019
At 31st December
2019 2018
US$m US$m
Net operating assets
F ixed assets 127.6 133.7
Right-of-use assets 12.4 -
Investment properties (note
10) 33,191.2 33,712.1
Associates and joint ventures 7,226.1 6,694.7
Other investments - 122.8
Non-current debtors 48.1 24.0
Deferred tax assets 26.9 13.9
Pension assets 0.1 -
Non-current assets 40,632.4 40,701.2
Properties for sale 2,042.0 1,983.0
Current debtors 1,141.3 892.2
Current tax assets 19.5 11.4
Bank balances 1,424.0 1,375.2
---------- ----------------
Current assets 4,626.8 4,261.8
---------- ----------------
Current creditors (1,460.8) (1,337.3)
Current borrowings (note 11) (715.3) (793.8)
Current tax liabilities (261.0) (119.4)
---------- ----------------
Current liabilities (2,437.1) (2,250.5)
---------- ----------------
Net current assets 2,189.7 2,011.3
Long-term borrowings (note
11) (4,299.9) (4,145.2)
Deferred tax liabilities (210.9) (167.4)
Pension liabilities (1.5) (3.3)
Non-current creditors (20.0) (27.1)
---------- ----------------
38,289.8 38,369.5
---------- ----------------
Total equity
Share capital 233.4 233.4
Share premium 257.3 257.3
Revenue and other reserves 37,756.1 37,850.8
---------- ----------------
Shareholders' funds 38,246.8 38,341.5
Non-controlling interests 43.0 28.0
---------- ----------------
38,289.8 38,369.5
---------- ----------------
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
for the year ended 31st December 2019
Attributable to Attributable
shareholders to non-
Share Share Revenue Hedging Exchange of the controlling Total
capital premium reserves reserves reserves Company interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
2019
At 1st January 233.4 257.3 38,352.7 (8.8) (493.1) 38,341.5 28.0 38,369.5
Total
comprehensive
income - - 199.8 17.1 201.1 418.0 2.8 420.8
Dividends paid
by the Company - - (513.4) - - (513.4) - (513.4)
Dividends paid
to
non-controlling
shareholders - - - - - - (0.9) (0.9)
Unclaimed
dividends
forfeited - - 0.7 - - 0.7 - 0.7
Ac quisition of
a subsidiary - - - - - - 13.1 13.1
At 31st December 233.4 257.3 38,039.8 8.3 (292.0) 38,246.8 43.0 38,289.8
-------- -------- --------- --------- --------- -------- ------------ --------
2018
At 1st January 235.3 386.9 36,367.0 (7.7) (139.7) 36,841.8 34.7 36,876.5
Total
comprehensive
income - - 2,454.9 (1.1) (353.4) 2,100.4 (4.1) 2,096.3
Dividends paid
by the Company - - (469.8) - - (469.8) - (469.8)
Dividends paid
to
non-controlling
shareholders - - - - - - (2.6) (2.6)
Unclaimed
dividends
forfeited - - 0.6 - - 0.6 - 0.6
Share repurchase (1.9) (129.6) - - - (131.5) - (131.5)
At 31st December 233.4 257.3 38,352.7 (8.8) (493.1) 38,341.5 28.0 38,369.5
-------- -------- --------- --------- --------- -------- ------------ --------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2019
2019 2018
US$m US$m
Operating activities
Operating profit 350.6 2,331.8
Depreciation and amortisation 13.6 4.2
Change in fair value of investment properties 854.2 (1,222.4)
Gain on disposal/change in fair value
of other
investments (34.4) (20.1)
(Increase)/decrease in properties for
sale (1.1) 105.9
Increase in debtors (186.7) (250.0)
Increase/(decrease) in creditors 26.7 (185.2)
Interest received 50.3 44.8
Interest and other financing charges paid (195.2) (171.7)
Tax paid (115.5) (172.1)
Dividends from associates and joint ventures 419.6 139.2
Cash flows from operating activities 1,182.1 604.4
Investing activities
Major renovations expenditure (116.4) (93.0)
Developments capital expenditure (27.3) (57.4)
Investments in and advances to associates
and joint
ventures (646.0) (978.4)
Acquisition of a subsidiary (25.8) -
Refund of deposit for a joint venture - 72.9
Proceeds on disposal of other investments 157.5 -
Cash flows from investing activities (658.0) (1,055.9)
Financing activities
Drawdown of borrowings 1,334.5 2,721.5
Repayment of borrowings (1,309.2) (1,883.9)
Principal elements of lease payments (5.1) -
Dividends paid by the Company (510.1) (466.6)
Dividends paid to non-controlling shareholders (0.9) (2.5)
Share repurchase - (131.5)
Cash flows from financing activities (490.8) 237.0
--------- ---------
Net cash outflow 33.3 (214.5)
Cash and cash equivalents at 1st January 1,368.9 1,616.6
Effect of exchange rate changes 15.8 (33.2)
--------- ---------
Cash and cash equivalents at 31st December 1,418.0 1,368.9
--------- ---------
Hongkong Land Holdings Limited
Notes
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial information contained in this announcement has
been based on the audited results for the year ended 31st December
2019 which have been prepared in conformity with International
Financial Reporting Standards, including International Accounting
Standards and Interpretations adopted by the International
Accounting Standards Board.
T he Group has adopted IFRS 16 'Leases' from 1st January
2019:
IFRS 16 'Leases'
The standard replaces IAS 17 'Leases' and related
interpretations, and introduces a comprehensive model for the
identification of lease arrangements and accounting treatments for
both lessors and lessees. The distinction between operating and
finance leases is removed for lessee accounting, and is replaced by
a model where a lease liability and a corresponding right-of-use
asset have to be recognised on the balance sheet for almost all
leases by the lessees. The Group's recognised right-of-use assets
primarily relate to property leases, which are entered into for use
as offices. There are also right-of-use assets relate to motor
vehicles and equipment. Prior to 2019, payments made under
operating leases were charged to profit and loss on a straight-line
basis over the period of the lease. From 1st January 2019, each
lease payment is allocated between settlement of the lease
liability and finance cost. The finance cost is charged to profit
and loss over the lease period. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the
lease term on a straight-line basis.
In addition, leasehold land which represents payments to third
parties to acquire interests in property, previously included in
fixed assets, is now presented under right-of-use assets. Leasehold
land is amortised over the useful life of the lease, which includes
the renewal period if the lease is likely to be renewed by the
Group without significant cost.
The accounting for lessors does not change significantly.
IFRS 16 affects primarily the accounting for the Group's
operating leases. It does not have a significant effect on the
Group's profit and financial position.
There are no other amendments or interpretations, which are
effective in 2019 and relevant to the Group's operations, that have
a significant effect on the Group's accounting policies.
The Group has elected to early adopt the 'Interest Rate
Benchmark Reform: Amendments to IFRS 9, IAS 39 and IFRS 7'
(effective 1st January 2020) in relation to hedge accounting for
the Group's annual reporting period commencing 1st January 2019. In
accordance with the transition provisions, the amendments have been
adopted retrospectively with respect to hedging relationships that
existed at the start of the reporting period or were designated
thereafter. The amendments provide temporary relief from applying
specific hedge accounting requirements to hedging relationships
which are directly affected by the uncertainty arising from the
reforms and replacement of the existing benchmark interest rates
such as LIBOR and other inter-bank offered rates ('IBOR reform').
The forthcoming IBOR reforms may take effect at different times and
may have a different impact on hedged items (the fixed and floating
rate borrowings) and the hedging instruments (the interest rate
swaps and cross currency swaps used to hedge the borrowings). The
reliefs have the effect that IBOR reform should not generally cause
hedge accounting to terminate. The reliefs under the amendments
will end when the uncertainty arising from IBOR reform is no longer
present; or the hedging relationship is discontinued.
The outstanding interest rate swaps and cross currency swaps of
an aggregate notional principal and contract amount of US$1,631.2
million are impacted by the IBOR reform. 92% of these will mature
after 2021. Early adoption of these amendments has no impact on the
Group's consolidated financial statements for 2019.
Apart from the above, the Group has not early adopted any
standard, interpretation or amendments that has been issued but not
yet effective.
2. REVENUE
2019 2018
US$m US$m
Rental income 998.8 982.7
Service income 152.6 149.6
Sales of properties
- recognised at a point in time 652.6 1,318.6
- recognised over time 515.7 214.5
1,168.3 1,533.1
2,319.7 2,665.4
------- -------
Total variable rents included in rental income amounted to
US$16.2 million (2018: US$15.5 million).
3. NET OPERATING COSTS
2019 2018
US$m US$m
Cost of sales (989.6) (1,429.4)
Other income 25.9 27.6
Administrative expenses (185.6) (174.3)
Gain on disposal/change in fair value
of other
investments 34.4 20.1
(1,114.9) (1,556.0)
--------- ---------
4. OPERATING PROFIT
2019 2018
US$m US$m
By business
Investment Properties 918.6 902.9
Development Properties 334.8 257.9
Corporate (83.0) (71.5)
------- -------
1,170.4 1,089.3
Change in fair value of investment properties (854.2) 1,222.4
Gain on disposal/change in fair value
of other
investments 34.4 20.1
350.6 2,331.8
------- -------
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
2019 2018
US$m US$m
By business
Investment Properties
- operating profit 145.0 141.0
- net financing charges (49.4) (45.5)
- tax (17.3) (17.7)
- net profit 78.3 77.8
Development Properties
- operating profit 340.5 323.9
- net financing income (17.2) 8.2
- tax (106.3) (127.8)
- non-controlling interests (22.6) (17.0)
- net profit 194.4 187.3
------- -------
Underlying business performance 272.7 265.1
Change in fair value of investment properties
(net of tax) (32.6) 188.6
240.1 453.7
------- -------
Results are shown after tax and non-controlling interests in the
associates and joint ventures.
6. TAX
2019 2018
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (247.8) (177.0)
Deferred tax (19.3) (37.1)
(267.1) (214.1)
------- -------
Tax relating to components of other comprehensive income is
analysed as follows:
2019 2018
US$m US$m
Remeasurements of defined benefit plans (0.4) 0.4
Cash flow hedges (4.1) 0.9
----- -----
(4.5) 1.3
----- -----
Tax on profits has been calculated at the rates of taxation
prevailing in the territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$136.2
million (2018: US$214.0 million) is included in share of results of
associates and joint ventures.
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties and equity investments
which are measured at fair value through profit and loss; gains and
losses arising from the sale of businesses, investments and
investment properties; impairment of non-depreciable intangible
assets and other investments; provisions for the closure of
businesses; acquisition-related costs in business combinations; and
other credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying
business performance.
An analysis of non-trading items after interest, tax and
non-controlling interests is set out below:
2019 2018
US$m US$m
Change in fair value of investment properties (854.2) 1,222.4
Tax on change in fair value of investment
properties (20.5) (7.8)
Gain on disposal/change in fair value
of other
investments 34.4 20.1
Share of change in fair value of investment
properties of
associates and joint ventures (net of
tax) (32.6) 188.6
Non-controlling interests (5.5) (2.3)
(878.4) 1,421.0
------- -------
8. EARNINGS PER SHARE
Earnings per share are calculated on profit attributable to
shareholders of US$198.0 million (2018: US$2,457.1 million) and on
the weighted average number of 2,333.9 million (2018: 2,341.8
million) shares in issue during the year.
Earnings per share are additionally calculated based on
underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
2019 2018
------------------- -------------------
Earnings Earnings
per share per share
US$m USc US$m USc
Underlying profit attributable
to
shareholders 1,076.4 46.12 1,036.1 44.24
Non-trading items (note 7) (878.4) 1,421.0
------- -------
Profit attributable to shareholders 198.0 8.48 2,457.1 104.92
------- -------
9. DIVIDS
2019 2018
US$m US$m
Final dividend in respect of 2018 of USc16.00
(2017: USc14.00) per share 373.4 329.4
Interim dividend in respect of 2019 of
USc6.00
(2018: USc6.00) per share 140.0 140.4
513.4 469.8
----- -----
A final dividend in respect of 2019 of USc16.00 (2018: USc16.00)
per share amounting to a total of US$373.4 million (2018: US$373.4
million) is proposed by the Board. The dividend proposed will not
be accounted for until it has been approved at the 2020 Annual
General Meeting. The amount will be accounted for as an
appropriation of revenue reserves in the year ending 31st December
2020.
10. INVESTMENT PROPERTIES
2019 2018
US$m US$m
At 1st January 33,712.1 32,481.0
Exchange differences 190.6 (109.3)
Additions 142.7 118.0
(Decrease)/increase in fair value (854.2) 1,222.4
At 31st December 33,191.2 33,712.1
-------- --------
11. BORROWINGS
2019 2018
US$m US$m
Current
Bank overdrafts 6.0 6.3
Bank loans 383.8 154.8
Current portion of long-term borrowings
- bank loans 21.4 530.6
- notes 304.1 102.1
715.3 793.8
Long-term
Bank loans 1,281.5 1,106.4
Notes
------- -------
- due 2020 - 302.1
- due 2021 65.5 65.3
- due 2022 614.7 604.7
- due 2023 179.2 178.0
- due 2024 406.7 399.6
- due 2025 647.5 648.7
- due 2026 38.6 38.3
- due 2027 186.0 184.7
- due 2028 182.6 181.4
- due 2029 121.3 50.5
- due 2030 102.8 102.2
- due 2031 25.4 25.2
- due 2032 30.3 30.1
- due 2033 89.2 88.6
- due 2034 77.2 -
- due 2038 109.2 107.6
- due 20 39 110.2 -
- due 2040 32.0 31.8
3,018.4 3,038.8
4,299.9 4,145.2
5,015.2 4,939.0
------- -------
12. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Total capital commitments at 31st December 2019 amounted to
US$1,144.7 million (2018: US$1,394.5 million).
Various Group companies are involved in litigation arising in
the ordinary course of their respective businesses. Having reviewed
outstanding claims and taking into account legal advice received,
the Directors are of the opinion that adequate provisions have been
made in the financial statements.
13. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Holdings
Limited and the ultimate holding company is Jardine Matheson
Holdings Limited ('JMH'). Both companies are incorporated in
Bermuda.
In the normal course of business, the Group has entered into a
variety of transactions with the subsidiaries, associates and joint
ventures of JMH ('Jardine Matheson group members'). The more
significant of these transactions are described below:
Management fee
The management fee payable by the Group, under an agreement
entered into in 1995, to Jardine Matheson Limited ('JML') in 2019
was US$5.4 million (2018: US$5.2 million), being 0.5% per annum of
the Group's underlying profit in consideration for management
consultancy services provided by JML, a wholly-owned subsidiary of
JMH.
Property and other services
The Group rented properties to Jardine Matheson group members.
Gross rents on such properties in 2019 amounted to US$24.1 million
(2018: US$24.9 million).
The Group provided project management services and property
management services to Jardine Matheson group members in 2019
amounting to US$3.0 million (2018: Nil).
Jardine Matheson group members provided property maintenance and
other services to the Group in 2019 in aggregate amounting to
US$61.4 million (2018: US$55.8 million).
Hotel management services
Jardine Matheson group members provided hotel management
services to the Group in 2019 amounting to US$2.1 million (2018:
US$3.6 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint
ventures are included in debtors and creditors as appropriate. The
amounts are not material.
14. POST BALANCE SHEET EVENT
On 20th February 2020, the Group secured a prime, predominantly
commercial site along the Huangpu River South Extension area in the
Xuhui District of Shanghai from the government via auction for a
consideration of RMB31.1 billion (equivalent to approximately
US$4.4 billion). The project mainly comprises office and retail
space with a developable area of 1.1 million sq. m., and will be
developed in multiple phases to 2027.
The Group is considering a range of funding options without
recourse to shareholders, including internal resources and external
funding (including, but not limited to, pre-sales, cooperation with
strategic partners, and debt, subject to any applicable regulatory
approvals). The Group has sufficient liquidity to fund the land
cost and does not intend to seek funding from shareholders.
Hongkong Land Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The process by which the Group identifies and
manages risk will be set out in more detail in the Corporate
Governance section of the Company's 2019 Annual Report (the
'Report'). The following are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the
Disclosure Guidance and Transparency Rules issued by the Financial
Conduct Authority in the United Kingdom and are in addition to the
matters referred to in the Chairman's Statement, Chief Executive's
Review and other parts of the Report.
Economic Risk and Financial Risk
The Group is exposed to the risk of negative developments in
global and regional economies, and financial and property markets,
either directly or through the impact such developments might have
on the Group's joint venture partners, associates, bankers,
suppliers or tenants. These developments could include recession,
inflation, deflation and currency fluctuations, restrictions in the
availability of credit, increases in financing and construction
costs and business failures, and reductions in office and retail
rents, office and retail occupancy, and sales prices of, and demand
for, residential and mixed-use developments.
Such developments might increase costs of sales and operating
costs, reduce revenues, increase net financing charges, or result
in reduced valuations of the Group's investment properties or in
the Group being unable to meet its strategic objectives.
The steps taken by the Group to manage its exposure to financial
risk will be set out in the Financial Review and in a note to the
Financial Statements in the Report.
Commercial Risk
Risks are an integral part of normal commercial activities, and
where practicable steps are taken to mitigate them. Risks can be
more pronounced when businesses are operating in volatile
markets.
The Group makes significant investment decisions in respect of
commercial and residential development projects and these are
subject to market risks. This is especially the case where projects
are longer-term in nature and take more time to deliver
returns.
The Group operates in regions which are highly competitive, and
failure to compete effectively, whether in terms of price, tender
terms, product specification or levels of service can have an
adverse effect on earnings or market share, as can construction
risks in relation to new developments. Significant competitive
pressure may also lead to reduced margins.
It is essential for the products and services provided by the
Group's businesses to meet appropriate quality and safety standards
and there is an associated risk if they do not, including the risk
of damage to brand equity or reputation, which might adversely
impact the ability to achieve acceptable revenues and profit
margins.
The potential impact of disruption to IT systems or
infrastructure, whether as a result of cyber-crime or other
factors, could be significant.
Regulatory and Political Risk
The Group is subject to a number of regulatory regimes in the
territories in which it operates. Changes in such regimes, in
relation to matters such as foreign ownership of assets and
businesses, exchange controls, planning controls, tax rules,
climate-related regulation and employment legislation, could have
the potential to impact the operations and profitability of the
Group.
Changes in the political environment, including political or
social unrest, in the territories where the Group operates could
adversely affect the Group.
Pandemic, Natural Disasters, Climate Change and Terrorism
The Group could be impacted by a global or regional pandemic
which seriously affects economic activity or the ability of
businesses to operate smoothly. In addition, many of the
territories in which the Group operates can experience from time to
time natural disasters such as earthquakes and typhoons.
Ongoing changes to the physical climate in which the Group
operates may have an impact on our businesses. Rising sea levels
could, in the future, affect the value of any coastal assets that
the Group owns or develops.
The Group's operations are vulnerable to the effects of
terrorism, either directly through the impact of an act of
terrorism or indirectly through the effect on the Group's
businesses of generally reduced economic activity in response to
the threat of, or an actual act of, terrorism.
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
(a) the consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations
adopted by the International Accounting Standards Board; and
(b) the sections of the Company's 2019 Annual Report, including
the Chairman's Statement, Chief Executive's Review and the
Principal Risks and Uncertainties, which constitute the management
report, include a fair review of all information required to be
disclosed by the Disclosure Guidance and Transparency Rules 4.1.8
to 4.1.11 issued by the Financial Conduct Authority in the United
Kingdom.
For and on behalf of the Board
Robert Wong
Simon Dixon
Directors
The final dividend of USc16.00 per share will be payable
on 13th May 2020, subject to approval at the Annual General
Meeting to be held on 6th May 2020, to shareholders on the
register of members at the close of business on 20th March
2020. The shares will be quoted ex-dividend on 19th March
2020, and the share registers will be closed from 23rd to
27th March 2020, inclusive.
Shareholders will receive their cash dividends in United States
Dollars, unless they are registered on the Jersey branch register,
in which case they will have the option to elect for their
dividends to be paid in Sterling. These shareholders may make
new currency elections for the 2019 final dividend by notifying
the United Kingdom transfer agent in writing by 24th April
2020. The Sterling equivalent of dividends declared in United
States Dollars will be calculated by reference to a rate prevailing
on 29th April 2020.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in Sterling only
as calculated above. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore
will receive their cash dividends in United States Dollars
unless they elect, through CDP, to receive Singapore Dollars.
Shareholders on the Singapore branch register who wish to
deposit their shares into the CDP system by the dividend record
date, being 20th March 2020, must submit the relevant documents
to M & C Services Private Limited, the Singapore branch registrar,
by no later than 5.00 p.m. (local time) on 19th March 2020.
Hongkong Land Group
Hongkong Land is a major listed property investment, management
and development group. Founded in 1889, Hongkong Land's business is
built on excellence, integrity and partnership.
The Group owns and manages more than 850,000 sq. m. of prime
office and luxury retail property in key Asian cities, principally
in Hong Kong, Singapore, Beijing and Jakarta . Its properties
attract the world's foremost companies and luxury brands.
The Group's Central Hong Kong portfolio represents some 450,000
sq. m. of prime property. It has a further 165,000 sq. m. of
prestigious office space in Singapore mainly held through joint
ventures, a luxury retail centre at Wangfujing in Beijing, and a
50% interest in a leading office complex in Central Jakarta. The
Group also has a number of high quality residential, commercial and
mixed-use projects under development in cities across Greater China
and Southeast Asia. In Singapore, its subsidiary, MCL Land, is a
well-established residential developer.
Hongkong Land Holdings Limited is incorporated in Bermuda and
has a standard listing on the London Stock Exchange, with secondary
listings in Bermuda and Singapore. The Group's assets and
investments are managed from Hong Kong by Hongkong Land Limited.
Hongkong Land is a member of the Jardine Matheson Group.
- end -
For further information, please contact:
Hongkong Land Limited
Robert Wong (852) 2842 8428
Simon Dixon (852) 2842 8101
Brunswick Group Limited
Kate Holgate (852) 3512 504 7
Full text of the Preliminary Announcement of Results and the
Preliminary Financial Statements for the year ended 31st December
2019 can be accessed through the Internet at 'www.hkland.com'.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR KKPBDABKKANK
(END) Dow Jones Newswires
March 05, 2020 04:53 ET (09:53 GMT)
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