Final Results
Hong Kong Land Hldgs Ld
28 February 2000
HONGKONG LAND HOLDINGS LIMITED
1999 PRELIMINARY ANNOUNCEMENT OF RESULTS
* Asset values begin to recover
* Negative rent reversions impact revenues
* 11 Chater Road due for completion in 2002
* Good progress in letting new properties in Hong Kong and
Singapore
Results
Year ended 31st December
1999 1998 Change
US$m US$m %
_______________________________________________________________
Operating profit 319 179 +78
Profit after taxation and
minority interests 267 126 +112
Profit after taxation and
minority interests excluding asset
impairment reversals/provisions 265 370 -28
_____________________________________________________________
USc USc %
_____________________________________________________________
Earnings per share 10.59 4.98 +113
Earnings per share excluding asset
impairment reversals/provisions 10.48 14.65 -28
Dividends per share 9.00 9.00 -
_____________________________________________________________
US$ US$ %
_____________________________________________________________
Net asset value per share 2.07 2.01 +3
'The Group's strategy continues to focus on maximising the
revenue from its Central portfolio in Hong Kong, developing
investment and trading properties in the region, and growing
its infrastructure portfolio.'
Simon Keswick, Chairman
'Rent reversions were sharply negative in 1999 and this will
continue through 2000, which will be reflected in further
declines in average rents. A shortage of new office supply
over the next two years and the resumption of growth in the
Hong Kong economy encourage a more optimistic view in the
medium term.'
Nicholas Sallnow-Smith, Chief Executive Officer
28th February 2000
The final dividend of USc5.50 per share will be payable on 7th
June 2000, subject to approval at the Annual General Meeting
to be held on 31st May 2000, to shareholders on the register
of members at the close of business on 24th March 2000. The
ex-dividend date will be on 22nd March 2000, and the share
registers will be closed from 27th to 31st March 2000,
inclusive.
HONGKONG LAND HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 1999
OVERVIEW
The total stock of Grade 'A' office space in Hong Kong's
Central business district increased from 17m to 21m square
feet between 1997 and 1999. This expansion coincided with a
recession in Hong Kong's economy, leading to a sharp fall in
both market rentals and capital values. By mid-1999, however,
the great majority of the new space had been let, rents had
stabilised and Hong Kong's economy was beginning to show signs
of recovery. At the end of the year the improved outlook was
reflected in modestly rising commercial property values.
Business conditions have also strengthened in the other
markets in which Hongkong Land operates, where the outlook for
the Group's investments is continuing to improve.
PERFORMANCE
Hongkong Land Holdings Limited today announced that the net
profit for the year ended 31st December 1999 increased by 112%
to US$267 million from US$126 million in 1998. The increase
was due to the movement in provisions against impairment of
asset values, mainly development properties, which reduced
profit in 1998 by US$248 million, while 1999 saw a small net
write back of US$2 million. Excluding these items from both
years, net profit declined by 28% from US$370 million to
US$265 million, largely as a result of negative rent
reversions in the Central portfolio.
Earnings per share rose by 113% to USc10.59. Excluding asset
impairment movements from both years, earnings per share fell
by 28% to USc10.48 compared with recurring earnings per share
in 1998 of USc14.65.
The annual valuation of the Group's investment properties was
carried out at the end of 1999 by independent professional
valuers and produced a net valuation surplus for the year of
US$160 million, which has been credited to reserves.
Shareholders' funds at the year end were US$5,226 million, up
3% from US$5,072 million in 1998. Net asset value per share
rose 3% in 1999, from US$2.01 to US$2.07. Net balance sheet
gearing rose from 9% at the end of 1998 to 12%.
The Directors recommend a final dividend of USc5.50 per share
which, together with the interim dividend of USc3.50 per
share, will make a total annual dividend of USc9.00 per share,
unchanged from that of 1998.
GROUP REVIEW
Turning to the operations, the Chairman, Simon Keswick, said
that the Group's strategy continues to focus on maximising the
revenue from its Central portfolio in Hong Kong, developing
investment and trading properties in the region, and growing
its infrastructure portfolio.
Redevelopment of 11 Chater Road, which lies at the heart of
the Group's Central portfolio of properties, continued
satisfactorily during 1999 and is on schedule for completion
in mid-2002. It also undertook a number of initiatives to
upgrade the fabric of the portfolio and keep it fully
competitive. Importantly, overall occupancy was maintained
above 94% throughout the year. The retail element of the
portfolio showed a good recovery from a very difficult 1998.
The Group's development properties at One Raffles Link,
Singapore and 1063 King's Road, Hong Kong were completed and
are letting well.
Progress on the development of its infrastructure portfolio
was slow, but the Group's investment in Hong Kong's Container
Port has moved forward and construction of the new terminal
will commence shortly.
OUTLOOK
In conclusion, Simon Keswick said, 'In the near term Hongkong
Land's revenue stream will continue to be adversely affected
by negative rent reversions. It is, however, encouraging
that, notwithstanding the recent recession, Hong Kong
continues to develop and expand its role as a regional
financial centre. Hong Kong's financial heart lies in
Central, where the Group continues to focus its investment in
order to maximise the long-term return on its assets.'
CHIEF EXECUTIVE'S REVIEW
STRATEGIC FOCUS
Hongkong Land's principal objectives remain:
- To maximise the long-term returns on the portfolio of
properties it owns in the heart of Hong Kong's Central
business district.
- To pursue profitable property investment opportunities
both in Hong Kong and elsewhere in Asia.
- To expand its portfolio of infrastructure investments.
THE CENTRAL PORTFOLIO
Commercial
Asking rents, after falling for two years as a result of
recession and major new supply stabilised in mid-1999 and are
slowly recovering.
Hongkong Land took steps to minimise the impact of the new
space in Central well in advance of its completion and this
has allowed occupancy levels to be maintained at around 95%
over the last 3 years. Rent reversions were, however, sharply
negative in 1999 and this will continue through 2000, which
will be reflected in further declines in average rents.
A shortage of new office supply over the next two years and
the resumption of growth in the Hong Kong economy encourage a
more optimistic view of asking rents in the medium term.
Hongkong Land continued to invest vigorously in maintaining
and improving its Central portfolio. The redevelopment of the
11 Chater Road site is going ahead on schedule for completion
in mid-2002. The new building will comprise an office tower
above a retail podium totalling some 580,000 square feet
gross.
In addition to this, the telecommunications infrastructure of
the portfolio continues to be upgraded and a major refit of
the mechanical and electrical installations in Edinburgh and
Gloucester Towers will be completed in 2000.
Retail Properties
Trading conditions for Central retailers improved
substantially in 1999 following a very difficult 1998. The
confidence that international brand retailers have in Central
was reflected in the opening of several large new 'flagship'
stores in the portfolio during the year. In general sales
activity has exceeded expectations.
The refurbishments of the retail podium of Prince's Building
and the basement of the Landmark were completed during 1999
and have been well received by both retailers and shoppers.
The refurbished premises have been fully let on satisfactory
terms.
Hongkong Land currently derives some 17% of its Central
portfolio revenues from retail activities and an increase in
this level is anticipated.
E-Commerce
Demand for telecommunications capacity within the Central
portfolio is increasing in line with the growth in e-
commerce/internet activity. The Group continues to invest to
ensure that all of its tenants have access to adequate
capacity.
A comprehensive review of the opportunities for Hongkong Land
created by e-commerce has commenced. This review will seek
the best way to harness, internally, the latest technology so
as to improve the service we offer our tenants while exploring
the commercial opportunities that may be generated.
OTHER PROPERTIES
Commercial
The Group's office and retail development at One Raffles Link,
Singapore was substantially completed during 1999. The office
element of 240,000 square feet net has been over 90% pre-let.
Tenants are fitting out and the building will be operational
from April 2000. The retail element of 70,000 square feet net
mainly comprises an underground mall connecting the basement
of the office building to Singapore's Mass Rapid Transit.
Retailer response to this space, which is still being
completed, has been strong and is commanding good rents. It
is now over 85% committed. Fitting out of the retail units
will begin in April and the mall will be fully operational by
mid-2000.
In Hong Kong, the Group's 230,000 square feet net office
building at Quarry Bay, 1063 King's Road, was completed on
schedule in July 1999 and has subsequently been fully let to a
range of high quality tenants, many of whom operate in the
internet arena. The rents obtained compare favourably with
those prevailing in the area.
The World Bank was secured as a major tenant at 63 Ly Thai To,
the Group's second office building in central Hanoi. Both
buildings, which comprise some 120,000 square feet net, are
over 90% let in what continues to be a difficult market.
Residential
In Beijing the second and last phase of Maple Place was
completed, and leasing of the 209 luxury residential units has
progressed satisfactorily in a difficult market. This
development, which has established itself as Beijing's premier
residential location, is owned 40% by the Group.
Roxas Triangle Tower, Manila, in which the Group has a 40%
interest in partnership with Ayala, continued to make progress
to completion, now scheduled for late-2000. The Manila
property market remains depressed but there were some
encouraging signs of new activity towards the end of 1999.
In Hong Kong the Group's residential holdings - principally
Stanley Court - were fully occupied at satisfactory rents.
The residential market in Hong Kong remains, at all levels,
sluggish.
In December 1999, Hongkong Land formalised a joint venture
with Grosvenor Estates of London. The objective of this
venture, Grosvenor Land, is to invest in prime residential
real estate in major Asian cities. Once Grosvenor Land
becomes fully operational third-party investors will be
approached and invited to participate in its further growth.
Infrastructure
Asia Container Terminals (ACT), in which the Group has a 28.5%
interest, made further progress towards its involvement in
operations at Hong Kong's container port during 1999.
Financing arrangements for this long-awaited project have been
concluded and construction will commence in May 2000. It is
planned that ACT will take over two deepwater container berths
at Container Terminal 8 in 2004. Throughput at the container
port rose during 1999, and planned infrastructural upgrades
will help to reinforce Hong Kong's importance as a regional
container hub in the long term.
In China both Central China Power (in which the Group has a
25% interest) and China Water Company (40%) made further
progress. The restructurings of the Chinese economy, however,
has meant that this progress has not been as brisk as might be
desired.
The 75 km Tangerang to Merak toll road in Indonesia, in which
Hongkong Land has a 13% interest, benefited from improved
traffic levels and lower interest rates but an increase in
tolls remains elusive.
Connaught Investors
The market value of the Group's 45% holding in Connaught
Investors rose from US$243 million at the beginning of 1999 to
US$465 million at the end of the year.
Nicholas Sallnow-Smith
Chief Executive Officer
28th February 2000
______________________________________________________________
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 1999
______________________________________________________________
1999 1998
US$m US$m
______________________________________________________________
Revenue (note 2) 418.9 527.4
Recoverable and non-recoverable costs (76.9) (78.3)
_______ _______
Net income from properties 342.0 449.1
Other income 0.4 3.4
Administrative and other expenses (25.2) (26.2)
_______ _______
317.2 426.3
Asset impairment reversals/
(provisions) (note 3) 2.2 (247.6)
_______ _______
Operating profit (note 4) 319.4 178.7
Net financing charges (30.9) (17.5)
Share of results of associates and
joint ventures (note 5) 10.2 10.9
_______ _______
Profit before taxation 298.7 172.1
Taxation (note 6) (30.6) (50.3)
_______ _______
Profit after taxation 268.1 121.8
Minority interests (1.0) 4.0
_______ _______
Profit after taxation and minority
interests 267.1 125.8
======= =======
______________________________________________________________
USc Usc
______________________________________________________________
Earnings per share (note 7) 10.59 4.98
Earnings per share excluding asset
Impairment reversals/provisions (note 7) 10.48 14.65
Diluted earnings per share (note 7) 10.59 4.98
Diluted earnings per share excluding asset
Impairment reversals/provisions (note 7) 10.48 14.65
______________________________________________________________
______________________________________________________________
Hongkong Land Holdings Limited
Consolidated Balance Sheet
at 31st December 1999
______________________________________________________________
1999 1998
US$m US$m
______________________________________________________________
Net operating assets
Tangible assets (note 8)
Investment properties 4,848.8 4,668.8
Development properties 697.6 610.8
Others 16.1 16.6
_______ _______
5,562.5 5,296.2
Associates and joint ventures 397.1 374.9
Other investments 12.9 12.9
Deferred tax assets 2.4 2.7
Pension assets 9.3 9.6
_______ _______
Non-current assets 5,984.2 5,696.3
Current assets (note 9) 1,449.0 1,473.4
Current liabilities (note 10) (522.0) (446.3)
Net current assets 927.0 1,027.1
Term loans (note 11) (1,674.0) (1,644.0)
Deferred tax liabilities (11.3) (8.5)
_______ _______
5,225.9 5,070.9
======= =======
Capital employed
Share capital 259.2 259.2
Revenue and other reserves
Property revaluation reserve 3,654.3 3,525.2
Exchange fluctuation reserve (44.2) (26.7)
Revenue reserves 1,434.0 1,391.7
5,044.1 4,890.2
Own shares held (77.7) (77.7)
_______ _______
Shareholders' funds 5,225.6 5,071.7
Minority interests 0.3 (0.8)
_______ _______
5,225.9 5,070.9
======= =======
______________________________________________________________
US$ US$
______________________________________________________________
Net asset value per share 2.07 2.01
______________________________________________________________
______________________________________________________________
Hongkong Land Holdings Limited
Consolidated Statement of Changes in Shareholders' Funds
for the year ended 31st December 1999
______________________________________________________________
1999 1998
US$m US$m
______________________________________________________________
At 1st January
- as previously reported 4,924.8 8,831.9
- effect of adopting IAS 10
(revised 1999) 138.8 215.7
- effect of adopting IAS 19
(revised 1998) 8.1 7.9
_______ _______
- as restated 5,071.7 9,055.5
Net revaluation surplus/(deficit) 162.5 (3,470.4)
Provision against a development property (29.5) (316.4)
Share of reserve movements of associates
and joint ventures (0.7) (3.2)
Provision against a short-term leasehold
investment property (5.6) -
Deferred tax on provision against a short-
term leasehold investment property 1.0 -
Net exchange translation differences (13.8) 3.0
Net gains/(losses) not recognised in the
Consolidated profit and loss account 113.9 (3,787.0)
Profit after taxation and minority
interests 267.1 125.8
Dividends (note 12) (227.1) (303.0)
Repurchase of ordinary shares - (19.6)
_______ _______
At 31st December 5,225.6 5,071.7
======= =======
______________________________________________________________
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 1999
______________________________________________________________
1999 1998
US$m US$m
______________________________________________________________
Cash flows from operating activities
Operating profit 319.4 178.7
Depreciation 5.7 5.6
Asset impairment (reversals)/provisions (2.2) 247.6
Disposal of unlisted investments - (2.8)
Increase in stock and store (0.1) -
Increase in debtors and prepayments (10.9) (4.9)
Increase/(decrease) in creditors and
accruals 2.0 (14.1)
Interest received 73.0 90.6
Interest and other financing charges paid (101.8) (105.5)
Tax paid (32.1) (49.2)
Dividends received 0.3 1.3
253.3 347.3
Cash flows from investing activities
Developments capital expenditure (133.8) (101.0)
Major renovations expenditure (12.5) (12.3)
Investments in and loans to joint
ventures (13.3) (31.4)
Purchase of other investments - (4.2)
Disposal of other investments 0.4 260.8
(159.2) 111.9
Cash flows from financing activities
Drawdown of secured bank loans 151.1 50.4
Repayment of unsecured bank loans (49.7) -
Drawdown of unsecured bank loans - 10.4
Repurchase of ordinary shares - (20.2)
Repurchase of 4% convertible bonds (27.2) (12.0)
Dividends paid by the Company (226.1) (301.2)
(151.9) (272.6)
_______ _______
Net (decrease)/increase in cash and
cash equivalents (57.8) 186.6
Cash and cash equivalents at 1st January 1,410.9 1,224.3
_______ _______
Cash and cash equivalents at
31st December 1,353.1 1,410.9
======= =======
______________________________________________________________
USc USc
______________________________________________________________
Cash flow per share (note 13) 9.54 13.27
______________________________________________________________
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 1999 which have been prepared under the historical
cost convention as modified by the revaluation of certain
non-current assets, and comply with International Accounting
Standards.
In 1999, the Group implemented IAS 1 (revised 1997),
Presentation of Financial Statements; IAS 14 (revised 1997),
Segment Reporting; IAS 17 (revised 1997), Leases; IAS 19
(revised 1998), Employee Benefits and IAS 35, Discontinuing
Operations. The provisions of IAS 10 (revised 1999), Events
After the Balance Sheet Date; IAS 16 (revised 1998),
Property, Plant and Equipment; IAS 22 (revised 1998),
Business Combinations; IAS 28 (revised 1998), Accounting for
Investments in Associates; IAS 31 (revised 1998), Financial
Reporting of Interests in Joint Ventures; IAS 36, Impairment
of Assets; IAS 37, Provisions, Contingent Liabilities and
Contingent Assets and IAS 38, Intangible Assets are applied
in advance of their effective dates.
With the exception of IAS 10 (revised 1999) and IAS 19
(revised 1998), there are no changes in accounting policy
that affect profit or Shareholders' funds resulting from the
adoption of the above standards as the Group was already
following the recognition and measurement principles in
those standards.
In accordance with IAS 10 (revised 1999) on Events After the
Balance Sheet Date, dividends proposed or declared after the
balance sheet date are not recognised as a liability at the
balance sheet date. In previous years, dividends proposed
or declared after the balance sheet date were recognised as
a liability at the balance sheet date. The effect of this
change has been to increase the Shareholders' funds at 1st
January 1998 and 1999 by US$215.7 million and US$138.8
million respectively.
In accordance with IAS 19 (revised 1998) on Employee
Benefits, pension costs are assessed using the projected
unit credit method. Under this method, the costs of
providing pensions are charged to the consolidated profit
and loss account so as to spread the regular cost over the
service lives of employees in accordance with an annual
independent professional actuarial valuation. The plan
assets are measured at fair value and the pension
obligations are measured as the present value of the
estimated future cash flows by reference to market yields
on high quality corporate bonds which have terms to
maturity approximating the terms of the related liability.
Actuarial gains and losses to the extent of the amount in
excess of 10% of the greater of the present value of the
plan obligations and the fair value of plan assets are
recognised in the consolidated profit and loss account over
the expected average remaining service lives of the
participating employees. In previous years, pension costs
were assessed using the attained age normal method and
pension obligations were discounted at the expected rate of
return on plan assets. The effect of this change has been
to increase the profit after taxation and minority
interests for the year ended 31st December 1998 by
US$0.2 million. Shareholders' funds at 1st January 1998
and 1999 have been increased by US$7.9 million and US$8.1
million respectively.
There have been no other changes to the Group's accounting
policies described in the 1998 Financial Statements.
2. REVENUE
1999 1998
US$m US$m
_______ _______
By business
Property
Rental income 364.8 469.8
Service and management charges 53.3 55.5
Income from property trading 0.8 2.1
_______ _______
418.9 527.4
======= =======
By geographical area
Hong Kong 415.8 525.0
Southeast Asia 3.1 2.4
_______ _______
418.9 527.4
======= =======
3. ASSET IMPAIRMENT REVERSALS/(PROVISIONS)
1999 1998
US$m US$m
_______ _______
Provision against development properties - (190.0)
Other asset impairment reversals and
provisions 2.2 (57.6)
_______ _______
2.2 (247.6)
________ _________
By business
Property 2.2 (236.5)
Infrastructure - (11.1)
_______ _______
2.2 (247.6)
======= =======
Asset impairment reversals after taxation and minority
interests amounted to US$2.6 million (1998: provisions of
US$244.0 million).
4. OPERATING PROFIT
1999 1998
US$m US$m
_______ _______
Segment results by business
Property 334.6 201.1
Infrastructure (1.4) (12.6)
_______ _______
333.2 188.5
Other income from infrastructure 0.4 -
Unallocated other income - 3.4
Unallocated administrative and other
expenses (14.2) (13.2)
_______ _______
319.4 178.7
======= =======
5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
1999 1998
US$m US$m
_______ _______
Connaught Investors 6.5 9.6
Joint ventures 3.7 1.9
Goodwill -
(0.6)
_______ _______
10.2 10.9
======= =======
By business
Property 1.0 0.5
Infrastructure 2.7 0.8
Connaught Investors 6.5 9.6
_______ _______
10.2 10.9
======= =======
6. TAXATION
1999 1998
US$m US$m
_______ _______
Current tax
Company and subsidiaries
Hong Kong 26.0 46.2
Southeast Asia 0.1 0.1
_______ _______
26.1 46.3
Associates and joint ventures
Hong Kong 0.1 0.1
Mainland China 0.3 0.1
Connaught Investors 0.1 0.1
0.5 0.3
_______ _______
26.6 46.6
Deferred tax
Hong Kong subsidiaries
Reversal of temporary differences 4.0 2.0
Utilisation of tax losses - 1.6
Change in tax rate - 0.1
4.0 3.7
_______ _______
30.6 50.3
======= =======
1999 1998
US$m US$m
_______ _______
Reconciliation of taxation and profit
Tax at the applicable tax rate 37.4 1.7
Asset impairment reversals/provisions not
Taxable or deductible in determining
taxable profit (0.6) 51.4
Expenses not deductible in determining
taxable profit 0.4 0.5
Other income not subject to tax (2.7) (3.8)
Losses not recognised 2.0 0.4
Tax rebates for previous year (5.6) -
Overprovision for prior years (0.3) -
Change in tax rate - 0.1
_______ _______
30.6 50.3
======= =======
Taxation on profits is provided at the rates of taxation
prevailing in the territories in which the Group operates.
The applicable tax rate represents the weighted average of the
rates of taxation prevailing in the territories in which the
Group operates.
7. EARNINGS PER SHARE
1999 1998
US$m US$m
_______ _______
Profit after taxation and minority
Interests for calculation of earnings
per share 267.1 125.8
Asset impairment reversals/provisions
(see note 3) (2.6) 244.0
_______ _______
Adjusted earnings for calculation of
earnings per share excluding asset
impairment reversals/provisions 264.5 369.8
======= =======
1999 1998
Millions Millions
of Shares of Shares
_________ _________
Weighted average number in issue 2,592.4 2,594.4
Own shares held (69.6) (69.6)
_______ _______
Number used to compute earnings
per share and earnings per share
excluding asset impairment
reversals/provisions 2,522.8 2,524.8
======= =======
The convertible bonds were anti-dilutive and therefore ignored
in calculating diluted earnings per share. As a result,
earnings per share and diluted earnings per share were the
same.
8. TANGIBLE ASSETS AND CAPITAL COMMITMENTS
1999 1998
US$m US$m
_______ _______
Tangible assets
At 1st January 5,296.2 9,161.6
Exchange translation differences (17.1) 4.5
Additions 164.4 114.5
Depreciation (5.7) (5.6)
Net revaluation surplus/(deficit
and provision) 124.7 (3,978.8)
_______ _______
At 31st December 5,562.5 5,296.2
======= =======
Capital commitments 622.7 768.5
======= =======
9. CURRENT ASSETS
1999 1998
US$m US$m
_______ _______
Property held for sale 41.1 36.2
Debtors, prepayments and others 34.6 24.0
Bank balances and other liquid funds 1,373.3 1,413.2
_______ _______
1,449.0 1,473.4
======= =======
Bank balances and other liquid funds include liquid
investments of US$106.3 million (1998: US$124.4 million).
Bank balances included an amount of US$134.6 million (1998:
US$134.8 million) subject to collateralised arrangements.
10. CURRENT LIABILITIES
1999 1998
US$m US$m
_______ _______
Creditors and other accruals 201.5 177.5
Unsecured bank loans 73.2 123.3
Bank overdrafts 20.2 2.3
Current portion of term loans
(see note 11) 213.5 123.5
Taxation 13.6 19.7
_______ _______
522.0 446.3
======= =======
11. TERM LOANS
1999 1998
US$m US$m
_______ _______
Hong Kong Dollar
Secured bank loans 1,116.3 1,018.5
Unsecured bank loans wholly repayable
within five years 141.6 142.0
7.625% bonds - 1993/2001 64.3 64.5
_______ _______
1,322.2 1,225.0
Singapore Dollar
Secured bank loans 90.5 39.6
United States Dollar
Secured bank loans 3.4 4.5
Unsecured bank loans wholly repayable
within five years 113.8 113.8
4% convertible bonds due 2001 357.6 384.6
_______ _______
474.8 502.9
_______ _______
1,887.5 1,767.5
Less current portion (see note 10) 213.5 123.5
_______ _______
1,674.0 1,644.0
======= =======
The 4% convertible bonds due 2001 issued in February 1994 are
convertible into fully paid ordinary shares of the Company at
a price of US$4.02 per share. The bonds are listed on the
Luxembourg Stock Exchange.
The equity component of the convertible bonds amounts to
US$58.1 million (1998: US$62.7 million) based on the
prevailing market interest rate of 7% at the time of issue for
similar debt without conversion options.
Of the total term loans of US$1,887.5 million (1998:
US$1,767.5 million), the convertible bonds were at a fixed
interest rate of 4%, US$579.5 million equivalent of Hong Kong
Dollar loans was at an average fixed interest rate of 8.1%
(1998: US$574.9 million at 8.2%) and US$6.0 million equivalent
of Singapore Dollar loans was at an average fixed interest
rate of 4.5% (1998: nil). After taking account of interest
rate swaps, the overall average interest rates were 7.5%
(1998: 7.3%) for Hong Kong Dollar loans, 4.6% (1998: 4.3%) for
United States Dollar loans and 4.3% (1998: 5.6%) for Singapore
Dollar loans.
Mortgages have been granted over certain properties of total
value of US$1,721.7 million (1998: US$1,585.6 million) as
security for the obligations of the Group to various banks in
respect of the secured term loans.
12. DIVIDENDS
1999 1998
US$m US$m
_______ _______
Final dividend in respect of 1998
of USc5.50 (1997: USc8.50) per share 138.8 214.7
Interim dividend in respect of 1999
of USc3.50 (1998: USc3.50) per share 88.3 88.3
_______ _______
227.1 303.0
_______ _______
A final dividend in respect of 1999 of USc5.50 per share
amounting to a total of US$138.8 million is proposed by the
Board. The dividend proposed is not accounted for until it
has been approved at the Annual General Meeting. The amount
will be accounted for as an appropriation of revenue reserves
in the year ending 31st December 2000.
13. CASH FLOW PER SHARE
Cash flow per share is based on cash flows from operating
activities less major renovations expenditure amounting to
US$240.8 million (1998: US$335.0 million) and is calculated on
the weighted average of 2,522.8 million (1998: 2,524.8
million) shares in issue during the year, which excludes 69.6
million shares in the Company held by a subsidiary.
14. CONTINGENT LIABILITIES
A subsidiary of the Group has given guarantees in respect of
the Group's obligations to the Container Terminal 9
development in Hong Kong. The anticipated capital commitment
to the build out of two berths in the project is estimated to
be approximately US$160.0 million. However, were the
subsidiary required to provide additional funds for the build
out cost of the other berths, the maximum contingent liability
assumed in respect of the guarantees would be US$276.3 million
(1998: US$279.3 million).
15. ANNUAL REPORT
The Annual Report will be posted to shareholders on or about
25th April 2000. Copies may be obtained from Jardine Matheson
International Services Limited, P.O. Box HM 1068, Hamilton HM
EX, Bermuda; IRG plc, Bourne House, 34 Beckenham Road,
Beckenham, Kent BR3 4TU, England and M & C Services Private
Limited, 16 Raffles Quay 23-01, Hong Leong Building,
Singapore 048581.
The final dividend of USc5.50 per share will be payable on 7th
June 2000, subject to approval at the Annual General Meeting
to be held on 31st May 2000, to shareholders on the register
of members at the close of business on 24th March 2000. The
ex-dividend date will be on 22nd March 2000, and the share
registers will be closed from 27th to 31st March 2000,
inclusive. Shareholders will receive their dividends in
United States Dollars, unless they are registered on the
Jersey branch register where they will have the option to
elect for Sterling. These shareholders may make new currency
elections by notifying the United Kingdom transfer agent in
writing by 19th May 2000. The Sterling equivalent of
dividends declared in United States Dollars will be calculated
by reference to a rate prevailing ten business days prior to
the payment date. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore will
receive United States Dollars unless they elect, through CDP,
to receive Singapore Dollars.
For further information, please contact:
Hongkong Land Limited (852) 2842 8300 (office)
N R Sallnow-Smith
Matheson & Co. Limited (44) 171 816 8135 (office)
Martin Henderson
Forrest International Limited (852) 2522 6475 (office)
Sue Gourlay/Rosemary Sayer
Ludgate Communications (44) 171 253 2252 (office)
Richard Hews
Full text of this and other Group announcements, and the
Preliminary Financial Statements for the year ended 31st
December 1999 can be accessed through the Internet at
'http://www.irasia.com/listco/sg/hkland'.
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