Half Yearly Report

RNS Number : 2302L

Hongkong Land Hldgs Ld

28 July 2011

 



To:       Business Editor	28th July 2011
	For immediate release

The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.

HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2011

Highlights

·    Positive commercial leasing conditions

·    Lower residential profits due to fewer completions

·    Net assets per share up 17% on rising capital values

"Conditions for the Group's commercial properties in Hong Kong are expected to remain favourable for the remainder of 2011, and the Singapore market should continue to be relatively stable.  The contribution from residential developments will be lower in the second half while sales activity may be affected by governmental measures to dampen the sector."

Simon Keswick, Chairman

28th July 2011

Results

	(unaudited) Six months ended 30th June
	2011 US$m	2010  US$m (restated†)	Change %
Underlying profit attributable to shareholders#	365	477	-23
Profit attributable to shareholders	3,805	1,572	+142
Shareholders' funds	23,425	19,457*	+20
Net debt	2,176	2,358*	-8
	US¢	US¢	%
Underlying earnings per share	15.83	21.20	-25
Earnings per share	164.82	69.90	+136
Interim dividend per share	6.00	6.00	-
	US$	US$	%
Net asset value per share	10.08	8.64*	+17
#  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 8 to the condensed 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 accounts have been restated due to the change in accounting policy on the early adoption of the amendments to IAS 12 as set out in note 1 to the condensed financial statements. * At 31st December 2010

The interim dividend of US¢6.00 per share will be payable on 12th October 2011 to shareholders on the register of members at the close of business on 19th August 2011.  The ex-dividend date will be on 17th August 2011, and the share registers will be closed from 22nd to 26th August 2011, inclusive.

HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2011

OVERVIEW

The Group's commercial property portfolio continued to benefit from favourable market conditions in the first half of the year, although underlying earnings were lower as a result of fewer residential completions.

PERFORMANCE

The Group's underlying profit in the period was US$365 million, compared with US$477 million in the first half of 2010.  There was an increased contribution from the Group's commercial properties, partially due to its enlarged portfolio in Singapore, but this was offset by lower profits from residential developments.

Following an independent valuation of the Group's investment properties, including its share of properties in joint ventures, a US$3.4 billion gain on revaluation was recorded producing a profit attributable to shareholders of US$3.8 billion for the period.  This compares with a profit attributable to shareholders of US$1.6 billion in the first half of 2010, which included a revaluation gain of US$1.1 billion.  The net asset value per share at 30th June 2011 was US$10.08, up 17% from 31st December 2010.

The Directors have declared an interim dividend of US¢6.00 per share, unchanged from 2010.

GROUP REVIEW

Commercial Property

Market conditions were favourable in Hong Kong as the economy remained strong.      Broad-based demand continued for commercial space, while there was no significant increase in overall supply.  In the Group's office portfolio, rental reversions were generally positive, and at 30th June 2011 vacancy stood at 2.5%.  The retail portfolio continued to enjoy full occupancy.  In Macau, the luxury retail centre at the Group's 47%-owned One Central joint venture is trading well. 

In Singapore, the office market was stable, and there is no significant vacancy in Hongkong Land's existing portfolio.  Following completion of the first two towers of Marina Bay Financial Centre in 2010, the Group is now benefiting from its one-third share of the rental income.  The third tower, which is some 60% pre-let, is due to complete next year.  In Jakarta, progress continued on the construction of the Group's 50%-owned, 61,000 sq. m. office tower.  Completion is also scheduled for next year.

In April, the Group agreed to acquire a property portfolio in Cambodia, principally four sites in Phnom Penh, for some US$36 million.  Completion is expected to take place later this year.

Residential Property

The overall contribution from the Group's residential activities declined in the period in comparison to the first six months of 2010 when two significant residential projects were completed. 

In Hong Kong, a further 13 units at The Serenade development were handed over to buyers in the first half, making a total of 46 out of 97 units.  Sales of The Residences and Apartments at Mandarin Oriental, Macau, the final phase of One Central, are progressing well with 89% of the units sold.  Most buyers are expected to take possession later this year.

In Singapore, MCL Land has handed over to buyers the 180 units in the fully pre-sold Peak@Balmeg, the only project that it will complete this year.  A new development, Terrasse, due to complete in 2014, was launched successfully by MCL Land in May and 48% of the units had been sold by the end of June.  An additional residential development site in Singapore was acquired for US$200 million in May on which some 600 high-rise apartments will be built.  In addition, construction of the final residential tower at the Group's Marina Bay joint venture, which is 63% pre-sold, is progressing well with completion expected in 2013.

In mainland China, sales continued at Maple Place, Beijing.  The current phases of the  50%-held Bamboo Grove development in Chongqing are on schedule for completion in the second half, and recent releases are selling well.  In Shenyang, the Group's 50%-held joint venture saw strong interest when it began sales of the second phase of its Park Life project in June.  Development activities are ongoing in other residential projects in Chongqing and Chengdu. 

FINANCE

The Group's financial position remained strong with net debt of US$2.2 billion at 30th June 2011, compared with US$2.4 billion at the end of 2010.  The decrease was largely due to the conversion of US$285million of convertible bonds during the period.  Gearing was 9%, based on total equity.

PEOPLE

R C Kwok retired from the Board in May 2011.  We would like to thank him for his significant contribution to the Group.

OUTLOOK

Conditions for the Group's commercial properties in Hong Kong are expected to remain favourable for the remainder of 2011, and the Singapore market should continue to be relatively stable.  The contribution from residential developments will be lower in the second half while sales activity may be affected by governmental measures to dampen the sector. 

Simon Keswick

Chairman

28th July 2011

Hongkong Land Holdings Limited

Consolidated Profit and Loss Account

(unaudited)

Six months ended 30th June

Year ended 31st December

						2011												2010												2010
	Underlying business performance US$m				Non-trading items US$m					Total US$m				Underlying business performance US$m (restated)			Non-trading items US$m (restated)					Total US$m (restated)				Underlying business performance US$m			Non-trading items US$m					Total US$m
Revenue (note 2)		754.7				-				754.7				765.1				-				765.1				1,340.6				-				1,340.6
Net operating costs (note 3)		(299.7)				-				(299.7)				(252.9)				-				(252.9)				(459.2)				-				(459.2)
		455.0				-				455.0				512.2				-				512.2				881.4				-				881.4
Change in fair value of investment properties		-				3,301.3				3,301.3				-				726.8				726.8				-				3,197.6				3,197.6
Asset impairment provisions, reversals and disposals		-				-				-				-				-				-				-				0.1				0.1
Operating profit (note 4)		455.0				3,301.3				3,756.3				512.2				726.8				1,239.0				881.4				3,197.7				4,079.1
Financing charges		(52.4)				-				(52.4)				(49.2)				-				(49.2)				(112.3)				-				(112.3)
Financing income		16.7				-				16.7				18.4				-				18.4				35.2				-				35.2
Net financing charges		(35.7)				-				(35.7)				(30.8)				-				(30.8)				(77.1)				-				(77.1)
Share of results of associates and joint ventures (note 5)		22.1				138.5				160.6				104.1				369.0				473.1				173.9				731.4				905.3
Profit before tax		441.4				3,439.8				3,881.2				585.5				1,095.8				1,681.3				978.2				3,929.1				4,907.3
Tax (note 6)		(73.8)				(0.3)				(74.1)				(69.1)				0.1				(69.0)				(122.8)				0.7				(122.1)
Profit after tax		367.6				3,439.5				3,807.1				516.4				1,095.9				1,612.3				855.4				3,929.8				4,785.2
Attributable to:
Shareholders of the Company		365.3				3,439.2				3,804.5				476.8				1,095.5				1,572.3				810.2				3,929.2				4,739.4
Non-controlling interests		2.3				0.3				2.6				39.6				0.4				40.0				45.2				0.6				45.8
		367.6				3,439.5				3,807.1				516.4				1,095.9				1,612.3				855.4				3,929.8				4,785.2
										US¢												US¢												US¢
Earnings per share (note 7)
- basic										164.82												69.90												210.70
- diluted										162.94												67.26												202.30

Hongkong Land Holdings Limited
Consolidated Statement of Comprehensive Income
							(unaudited)								Year ended
							Six months ended								31st
							30th June								December
							2011				2010				2010
							US$m				US$m				US$m
											(restated)
Profit for the period							3,807.1				1,612.3				4,785.2
Revaluation of other investments							6.0				(4.6)				11.0
Net actuarial gains on employee benefit plans							-				-				0.2
Net exchange translation differences							64.7				(48.8)				59.1
Cash flow hedges
- net loss arising during the period							(14.9)				(5.7)				(17.1)
- transfer to profit and loss							2.6				3.5				7.2
							(12.3)				(2.2)				(9.9)
Share of other comprehensive income of
	associates and joint ventures						65.8				(1.7)				80.8
Tax relating to components of other
	comprehensive income						1.9				(0.1)				1.1
Other comprehensive income for the period							126.1				(57.4)				142.3
Total comprehensive income for the period							3,933.2				1,554.9				4,927.5
Attributable to:
Shareholders of the Company							3,930.6				1,514.6				4,870.4
Non-controlling interests							2.6				40.3				57.1
							3,933.2				1,554.9				4,927.5

Hongkong Land Holdings Limited
Consolidated Balance Sheet
						(unaudited)								At 31st
						At 30th June								December
						2011				2010				2010
						US$m				US$m				US$m
										(restated)
Net operating assets
Investment properties (note 9)						21,380.5				15,496.6				18,036.0
Fixed assets						4.9				4.3				4.2
Associates and joint ventures						3,492.5				2,710.2				3,177.7
Other investments						65.2				41.6				59.2
Deferred tax assets						9.6				5.7				7.1
Pension assets						10.8				10.2				10.6
Non-current debtors						53.7				63.0				51.5
Non-current assets						25,017.2				18,331.6				21,346.3
Properties for sale						1,085.4				676.2				1,184.4
Current debtors						397.5				431.1				245.1
Bank balances						771.4				1,495.6				1,366.7
Current assets						2,254.3				2,602.9				2,796.2
Current creditors						(616.3)				(701.3)				(723.4)
Current borrowings (note 10)						(285.6)				(847.1)				(859.7)
Current tax liabilities						(101.5)				(116.5)				(69.2)
Current liabilities						(1,003.4)				(1,664.9)				(1,652.3)
Net current assets						1,250.9				938.0				1,143.9
Long-term borrowings (note 10)						(2,662.1)				(2,785.6)				(2,864.8)
Deferred tax liabilities						(58.1)				(48.2)				(54.8)
Non-current creditors						(99.4)				(41.9)				(93.1)
						23,448.5				16,393.9				19,477.5
Total equity
Share capital						232.5				224.9				225.1
Revenue and other reserves						23,192.5				16,000.9				19,231.5
Shareholders' funds						23,425.0				16,225.8				19,456.6
Non-controlling interests						23.5				168.1				20.9
						23,448.5				16,393.9				19,477.5

Hongkong Land Holdings Limited
Consolidated Statement of Changes in Equity
		Attributable to shareholders of the Company
															Attributable to
		Share		Share		Revenue		Capital		Hedging		Exchange			non-controlling			Total
		capital		premium		reserves		reserves		reserves		reserves		Total	interests			equity
		US$m		US$m		US$m		US$m		US$m		US$m		US$m	US$m			US$m
Six months ended 30th June 2011
At 1st January 2011		225.1		5.3		18,900.7		62.5		(16.2)		279.2		19,456.6		20.9		19,477.5
Total comprehensive income		-		-		3,810.5		-		(10.4)		130.5		3,930.6		2.6		3,933.2
Dividends paid by the Company		-		-		(232.3)		-		-		-		(232.3)		-		(232.3)
Issue of shares		7.4		262.7		-		-		-		-		270.1		-		270.1
Transfer		-		-		45.2		(45.2)		-		-		-		-		-
At 30th June 2011		232.5		268.0		22,524.1		17.3		(26.6)		409.7		23,425.0		23.5		23,448.5
Six months ended 30th June 2010
At 1st January 2010
-  as previously reported		224.9		-		12,332.5		63.4		(7.4)		142.5		12,755.9		135.4		12,891.3
-  change in accounting policy for adopting
	amendments to IAS 12	-		-		2,172.1		-		-		8.1		2,180.2		-		2,180.2
-  as restated		224.9		-		14,504.6		63.4		(7.4)		150.6		14,936.1		135.4		15,071.5
Total comprehensive income		-		-		1,567.7		-		(2.3)		(50.8)		1,514.6		40.3		1,554.9
Dividends paid by the Company		-		-		(224.9)		-		-		-		(224.9)		-		(224.9)
Dividends paid to non-controlling interests		-		-		-		-		-		-		-		(7.6)		(7.6)
At 30th June 2010		224.9		-		15,847.4		63.4		(9.7)		99.8		16,225.8		168.1		16,393.9

Year ended 31st December 2010
At 1st January 2010
-  as previously reported		224.9		-		12,332.5		63.4		(7.4)		142.5		12,755.9		135.4		12,891.3
-  change in accounting policy for adopting
	amendments to IAS 12	-		-		2,172.1		-		-		8.1		2,180.2		-		2,180.2
-  as restated		224.9		-		14,504.6		63.4		(7.4)		150.6		14,936.1		135.4		15,071.5
Total comprehensive income		-		-		4,750.6		-		(8.8)		128.6		4,870.4		57.1		4,927.5
Dividends paid by the Company		-		-		(359.9)		-		-		-		(359.9)		-		(359.9)
Dividends paid to non-controlling interests		-		-		-		-		-		-		-		(8.1)		(8.1)
Issue of shares		0.2		5.3		-		-		-		-		5.5		-		5.5
Change in interests in subsidiaries		-		-		4.5		-		-		-		4.5		(163.5)		(159.0)
Transfer		-		-		0.9		(0.9)		-		-		-		-		-
At 31st December 2010		225.1		5.3		18,900.7		62.5		(16.2)		279.2		19,456.6		20.9		19,477.5
Total  comprehensive  income  for  the  six  months  ended  30th June 2011  included  in  revenue  reserves  comprises  the  profit  attributable to shareholders of the Company of US$3,804.5 million (2010: US$1,572.3 million) and net fair value gain in other investments of US$6.0 million  (2010: loss of US$4.6 million).
Total  comprehensive  income  for  the  year  ended  31st  December  2010  included  in  revenue  reserves  comprises the profit attributable to shareholders  of  the  Company  of  US$4,739.4 million,  net fair value gain on other investments of US$11.0 million and net actuarial gain on employee benefit plans of US$0.2 million.

Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
						(unaudited)								Year ended
						Six months ended								31st
						30th June								December
						2011				2010				2010
						US$m				US$m				US$m
Operating activities
Operating profit						3,756.3				1,239.0				4,079.1
Depreciation						0.7				0.5				1.1
Write back of provision for development
	properties held for sale					-				(50.9)				(50.9)
Change in fair value of investment properties						(3,301.3)				(726.8)				(3,197.6)
Asset impairment provisions, reversals and
	disposals					-				-				(0.1)
Decrease/(increase) in properties for sale						134.7				161.3				(296.6)
(Increase)/decrease in debtors, prepayments
	and others					(149.4)				(115.8)				79.3
(Decrease)/increase in creditors and accruals						(105.3)				27.6				26.1
Interest received						20.5				22.8				38.2
Interest and other financing charges paid						(52.5)				(46.7)				(90.2)
Tax paid						(40.8)				(72.3)				(169.7)
Dividends from associates and joint ventures						23.3				165.9				271.7
Cash flows from operating activities						286.2				604.6				690.4
Investing activities
Major renovations expenditure						(21.3)				(14.3)				(34.6)
Developments capital expenditure						(1.0)				(0.2)				(0.2)
Investments in and loans to associates
	and joint ventures					(74.8)				(51.9)				(17.9)
Purchase of other investments						-				-				(2.0)
Cash flows from investing activities						(97.1)				(66.4)				(54.7)
Financing activities
Drawdown of borrowings						81.8				361.5				1,404.2
Repayment of borrowings						(641.5)				(396.3)				(1,380.6)
Change in interests in subsidiaries						-				-				(159.9)
Repayment to non-controlling interests						(3.8)				(6.7)				(11.1)
Dividends paid by the Company						(231.0)				(222.9)				(358.2)
Dividends paid to non-controlling interests						-				(7.4)				(7.8)
Cash flows from financing activities						(794.5)				(271.8)				(513.4)
Net (decrease)/increase in cash and cash
	equivalents					(605.4)				266.4				122.3
Cash and cash equivalents at beginning of period						1,365.7				1,225.0				1,225.0
Effect of exchange rate changes						10.5				2.9				18.4
Cash and cash equivalents at end of period						770.8				1,494.3				1,365.7

Hongkong Land Holdings Limited
Notes to Condensed Financial Statements
1.		ACCOUNTING POLICIES AND BASIS OF PREPARATION
		The condensed financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting'.  The condensed financial statements have not been audited or reviewed by the Group's auditor pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.
		The following amendments and interpretation to existing standards which are effective in the current accounting period and relevant to the Group's operations are adopted in 2011:
		Revised IAS 24									Related Party Disclosures
		Amendment to IAS 32									Classification of Rights Issues
		Amendment to IFRIC 14									Prepayments of a minimum Funding Requirement
		IFRIC 19									Extinguishing Financial Liabilities with Equity Instruments
		Improvements to IFRSs (2010)
		There have been no changes to the accounting policies described in the 2010 annual financial statements upon the adoption of the above amendments and interpretations to existing standards.
		Revised IAS 24 'Related Party Disclosures' supersedes IAS 24 (as revised in 2003).  It simplifies the disclosure requirements for government-related entities and clarifies the definition of a related party.
		Amendment to IAS 32 'Classification of Rights Issues' clarifies that rights issues are equity instruments when they are denominated in a currency other than the issuer's functional currency and are issued pro-rata to an entity's existing shareholders for a fixed amount of currency.
		Amendments to IFRIC 14 'Prepayments of a Minimum Funding Requirement' require an entity to recognise an asset for a prepayment that will reduce future minimum funding contributions required by the entity.
		IFRIC 19 'Extinguishing Financial Liabilities with Equity Instruments' provides guidance on the application of IAS 39 and IAS 32 when an entity issues its own equity instruments to extinguish all or part of a financial liability.
		The Improvements to IFRSs (2010) comprise a number of non-urgent but necessary amendments to IFRSs.  The amendments which are relevant to the Group's operations include IFRS 3 (amendments) 'Business Combinations', IFRS 7 (amendments) 'Financial Instruments: Disclosures', IAS 1 (amendments) 'Presentation of Financial Statements', IAS 34 (amendments) 'Interim Financial Reporting' and IFRIC 13 (amendment) 'Customer Loyalty Programmes'.
		IFRS 3 (amendments) 'Business Combinations' clarify the transition requirements for contingent consideration from business combination that occurred before the effective date of the revised IFRS, the measurement of non-controlling interests and un-replaced and voluntarily replaced share-based payment awards.
		IFRS 7 (amendments) 'Financial Instruments: Disclosures' emphasise the interaction between qualitative and quantitative disclosures and the nature and extent of risks associated with financial instruments.
		IAS 1 (amendments) 'Presentation of Financial Statements' clarify that entities may present the required reconciliations for each component of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements.
		IAS 34 (amendments) 'Interim Financial Reporting' provide guidance to illustrate how to apply disclosure principles in IAS 34 and add disclosure requirements around the circumstances likely to affect fair values of financial instruments and their classification, transfers of financial instruments between different levels of fair value hierarchy, changes in classification of financial assets and changes in contingent liabilities and assets.
		As a result of the early adoption of the amendments to IAS 12 'Deferred Tax: Recovery of Underlying Assets' at 31st December 2010, certain comparative figures from the interim results of 2010 have been restated.
		The effects of adopting amendments to IAS 12 on the consolidated profit and loss account for the six months ended 30th June 2010 were as follows:
																									US$m
		Increase in share of results of associates and joint ventures																							61.6
		Decrease in tax																							119.8
		Increase in profit after tax																							181.4
		Attributable to:
		Shareholders of the Company																							181.4
		Increase in basic earnings per share (US¢)																							8.06
		Increase in diluted earnings per share (US¢)																							7.71
		The effects of adopting amendments to IAS 12 on the consolidated balance sheet at   1st January 2010 was disclosed in note 1 to the 2010 annual financial statements.
		The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
2.		REVENUE
															Six months ended 30th June
															2011						2010
															US$m						US$m
		Rental income													348.2						339.6
		Service income													54.6						49.7
		Sales of trading properties													351.9						375.8
															754.7						765.1
		Service income includes service and management charges and hospitality service income.
3.		NET OPERATING COSTS
															Six months ended 30th June
															2011						2010
															US$m						US$m
		Cost of sales													(267.9)						(220.7)
		Other income													2.3						2.2
		Administrative expenses													(34.1)						(34.4)
															(299.7)						(252.9)
4.		OPERATING PROFIT
															Six months ended 30th June
															2011						2010
															US$m						US$m
		By business
		Commercial property													342.4						327.7
		Residential property													135.0						207.8
		Corporate													(22.4)						(23.3)
															455.0						512.2
		Change in fair value of investment properties
		- Commercial property													3,287.3							718.4
		- Residential property													14.0							8.4
															3,301.3						726.8
															3,756.3						1,239.0

5.				SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
																					Six months ended 30th June
																					2011								2010
																					US$m								US$m
				By business
				Commercial property
				- Operating profit																	38.3								10.7
				- Net financing charges																	(13.7)								(6.1)
				- Tax																	(5.3)								(0.9)
				- Net profit																	19.3								3.7
				Residential property
				- Operating profit																	6.9								126.8
				- Net financing charges																	(3.2)								(1.9)
				- Tax																	(0.9)								(24.4)
				- Non-controlling interests																	-								(0.1)
				- Net profit																	2.8								100.4
				Underlying business performance																	22.1								104.1
				Non-trading items:
				Change in fair value of investment properties
						(net of deferred tax)
				- Commercial property																	134.7								365.6
				- Residential property																	3.8								3.4
																					138.5								369.0
																					160.6								473.1
6.				TAX
																					Six months ended 30th June
																					2011								2010
																					US$m								US$m
				Tax (charged)/credited to profit and loss is analysed
					as follows:
				Current tax																	(71.3)								(68.5)
				Deferred tax
				- changes in fair value of investment properties																	(0.3)								0.1
				- other temporary differences																	(2.5)								(0.6)
																					(74.1)								(69.0)
				Tax relating to components of other comprehensive income is analysed as follows:
				Cash flow hedges																	1.9								(0.1)
			Tax on profits has been calculated at the rates of taxation prevailing in the territories in which the Group operates.  The Group has no tax payable in the United Kingdom (2010: Nil).
			Share   of   tax   of   associates   and   joint  ventures  of  US$11.8  million   (2010:  US$30.0 million) are included in share of results of associates and joint ventures.
7.			EARNINGS PER SHARE
			Basic  earnings  per  share  are  calculated  on  profit  attributable  to  shareholders  of    US$3,804.5 million (2010: US$1,572.3 million) and on the weighted average number of 2,308.3 million (2010: 2,249.3 million) shares in issue during the period.
			Diluted  earnings  per  share  are   calculated   on   profit   attributable  to  shareholders  of US$3,807.5 million (2010: US$1,582.8 million), which  is  after  adjusting  for  the  effects  of  the  conversion  of  convertible  bonds,  and  on  the  weighted  average  number  of  2,336.7 million (2010: 2,353.2 million) shares in issue during the period.
																								Ordinary shares in millions
																								2011							2010
	Weighted average number of shares in issue																							2,308.3							2,249.3
	Adjustment for shares to be issued on conversion
			of convertible bonds																					28.4							103.9
	Weighted average number of shares for diluted
			earnings per share calculation																					2,336.7							2,353.2
	Earnings per share are additionally calculated based on underlying profit attributable to shareholders.  A reconciliation of earnings is set out below:
													Six months ended 30th June
																		2011									2010
																		Basic				Diluted					Basic				Diluted
																	earnings					earnings					earnings				earnings
																	per share					per share				per share				per share
													US$m					US¢				US¢		US$m			US¢				US¢
	Underlying profit attributable
			to shareholders										365.3					15.83						476.8			21.20
	Non-trading items (note 8)												3,439.2											1,095.5
	Profit attributable to
			shareholders										3,804.5					164.82						1,572.3			69.90
	Interest expense on convertible
			bonds (net of tax)										3.0											10.5
	Profit for calculation of
			diluted earnings per share										3,807.5									162.94		1,582.8							67.26

8.		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; 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 is set out below:
															Six months ended 30th June
															2011					2010
															US$m					US$m
		Change in fair value of investment properties													3,301.3					726.8
		Deferred tax (charges)/credits on change in fair value of
			investment properties												(0.3)					0.1
		Share of change in fair value of investment properties of
			associates and joint ventures (net of deferred tax)												138.5					369.0
		Non-controlling interests													(0.3)					(0.4)
															3,439.2					1,095.5
9.		INVESTMENT PROPERTIES
																				Year ended
																				31st
											Six months ended 30th June									December
											2011					2010				2010
											US$m					US$m				US$m
		Net book value at beginning of period									18,036.0					14,817.7				14,817.7
		Exchange rate adjustments									26.1					(57.1)				(6.9)
		Additions									17.1					9.2				27.6
		Net revaluation surpluses									3,301.3					726.8				3,197.6
		Net book value at end of period									21,380.5					15,496.6				18,036.0

10.		BORROWINGS
																					At 31st
													At 30th June							December
										2011					2010						2010
										US$m					US$m						US$m
		Current
		Bank overdrafts								0.6					1.3						1.0
		Current portion of long-term borrowings
		- Bank loans								285.0					0.9						253.8
		- 3.01% Singapore dollar notes due 2010								-					232.7						-
		- 7% United States dollar bonds due 2011								-					612.2						604.9
										285.6					847.1						859.7
		Long-term
		Bank loans								440.3					1,051.4						410.7
		5.5% United States dollar bonds due 2014								548.4					551.9						548.3
		3.65% Singapore dollar notes due 2015								306.8					269.5						293.3
		2.75% United States dollar convertible
			bonds due 2012							104.8					373.1						372.8
		Medium term notes								1,261.8					539.7						1,239.7
										2,662.1					2,785.6						2,864.8
										2,947.7					3,632.7						3,724.5
		Secured								-					83.1						41.2
		Unsecured								2,947.7					3,549.6						3,683.3
										2,947.7					3,632.7						3,724.5
11.		DIVIDENDS
															Six months ended 30th June
															2011						2010
															US$m						US$m
		Final dividend in respect of 2010 of US¢10.00
			(2009: US¢10.00) per share												232.3						224.9
		An  interim dividend in respect of  2011 of  US¢6.00 (2010: US¢6.00) per share amounting to a total of US$139.5 million (2010: US$135.0 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2011.

12.

CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Total capital commitments at 30th June 2011 and 31st December 2010 amounted to US$796.4 million and US$1,027.9 million respectively.

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 condensed financial statements.

13.

RELATED PARTY TRANSACTIONS

In the normal course of business, the Group has entered into a variety of transactions with the subsidiary undertakings, associates and joint ventures of Jardine Matheson Holdings Limited ('Jardine Matheson group members'), the ultimate holding company of the Group.  The more significant of these transactions are described below:

Management fee

The  management  fee  payable by the Group to Jardine Matheson Limited was US$1.8 million (2010: US$2.4 million), being consideration for management consultancy services provided by Jardine Matheson Limited, a wholly-owned subsidiary of Jardine Matheson Holdings Limited.

Property and other services

The Group rented properties to Jardine Matheson group members.  Gross rents on such properties in 2011 amounted to US$10.5 million (2010: US$9.5 million).

Jardine Matheson group members provided property construction, maintenance and other services to the Group in 2011 in aggregate amounting to US$18.8 million (2010: US$17.7 million).

The outstanding balances arising from the above services at 30th June 2011 are not material.

Hotel management services

Jardine Matheson group members provided hotel management services to the Group in 2011 amounting to US$0.9 million (2010: US$0.7 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.

Hongkong Land Holdings Limited

Going Concern Statement

The Directors are required to consider whether it is appropriate to prepare financial statements on the basis that the Company and the Group are going concerns.  The Group prepares comprehensive financial forecasts and, based on these forecasts, cash resources and existing credit facilities, the Directors consider that the Company and the Group have adequate resources to continue in business for the foreseeable future.  For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control.  The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year:

•    Economic Risk

•    Commercial Risk and Financial Risk

•    Regulatory and Political Risk

•    Terrorism, Pandemic and Natural Disasters

For greater detail, please refer to page 70 of the Company's Annual Report for 2010, a copy of which is available on the Company's website www.hkland.com.

Responsibility Statement

The Directors of the Company confirm to the best of their knowledge that:

(a)

the condensed financial statements have been prepared in accordance with IAS 34; and

(b)

the interim management report includes a fair review of all information required to be disclosed by the Disclosure and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Services Authority of the United Kingdom.

For and on behalf of the Board

Y K Pang

John R Witt

Directors

28th July 2011

The interim dividend of US¢6.00 per share will be payable on 12th October 2011 to shareholders on the register of members at the close of business on 19th August 2011.  The ex-dividend date will be on 17th August 2011, and the share registers will be closed from 22nd to 26th August 2011, 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 for the 2011 interim dividend by notifying the United Kingdom transfer agent in writing by 23rd September 2011.  The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 28th September 2011.  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.

Hongkong Land Group

Hongkong Land is one of Asia's leading property investment, management and development groups.  Founded in Hong Kong in 1889, Hongkong Land's business is built on partnership, integrity and excellence.

In Hong Kong, the Group owns and manages some 450,000 sq. m. (five million sq. ft) of prime commercial space that defines the heart of the Central Business District.  In Singapore, it is helping to create the city-state's new Central Business District with the expansion of its joint venture portfolio of new developments.  Hongkong Land's properties in these and other Asian centres are recognised as market leaders and house the world's foremost financial, business and luxury retail names.

Hongkong Land also develops premium residential properties in a number of cities in the region, principally in China and Singapore where its subsidiary, MCL Land, is a significant developer.

Hongkong Land Holdings Limited is incorporated in Bermuda.  It has a premium listing on the London Stock Exchange, and 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

Y K Pang

(852) 2842 8428

John R Witt

(852) 2842 8101

GolinHarris

Sue So

(852) 2501 7984

As permitted by the Disclosure and Transparency Rules of the Financial Services Authority of the United Kingdom, the Company  will  not  be  posting  a  printed version of  the Half-Yearly Results announcement to shareholders.  The Half-Yearly Results announcement will remain available on the Company's website, www.hkland.com, together with other Group announcements.

 

END

 

 

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