Half Yearly Report

RNS Number : 5640I
Hongkong Land Hldgs Ld
26 July 2012
 



 

To:   Business Editor

26th July 2012


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 2012

 

Highlights

·    Rental reversions positive overall

·    Reduced first-half residential contribution

·    New Singapore residential site secured

·    Group to take 30% interest in Beijing office development

 

"While conditions remain uncertain, the Group's commercial portfolio in Hong Kong is well positioned due to the lack of new commercial space entering the market.  The contribution from residential developments in the second half is expected to benefit from the completion of two projects in Singapore and additional profits in Hong Kong." 

 

Simon Keswick, Chairman

26th July 2012

 

 

Results

 

 

(unaudited)

Six months ended 30th June

 

Change

         %


2012

US$m

2011 

US$m 

  Underlying profit attributable to shareholders#

318

365 

−13


  Profit attributable to shareholders

626

3,805 

−84


  Shareholders' funds

25,246

24,739*

+2


  Net debt

3,148

2,359*

+33



US¢

US¢ 

               %

  Underlying earnings per share

13.59

15.83 

−14


  Earnings per share

26.73

164.82 

−84


  Interim dividend per share

6.00

6.00 

-



US$

US$ 

               %

  Net asset value per share

10.77

10.58*

+2


# 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.

* At 31st December 2011

The interim dividend of US¢6.00 per share will be payable on 10th October 2012 to shareholders on the register of members at the close of business on 17th August 2012.  The ex-dividend date will be on 15th August 2012, and the share registers will be closed from 20th to 24th August 2012, inclusive.

 



HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2012

 

OVERVIEW

Operating profit from the Group's commercial property portfolio increased in the first six months of 2012, but this was more than offset by the decrease in residential profits.  During the period, there were no residential projects completed in Singapore and fewer sales completed at the Group's Serenade project in Hong Kong.  In mainland China, while overall market sentiment in the residential sector remained challenging, sales continued at the Group's various projects in Chongqing and Shenyang.

 

PERFORMANCE

During the first half of 2012, the Group's underlying profit was US$318 million compared with US$365 million in 2011. 

 

The Group recorded a US$308 million gain following an independent valuation of the Group's investment properties, including its share of properties in joint ventures.  This compares to a gain of US$3,440 million in the first half of 2011.

 

As a result, the profit attributable to shareholders for the first half of 2012 was US$626 million, compared with US$3,805 million in the comparable period last year.  The net asset value per share at 30th June 2012 was US$10.77, up 2% from the end of 2011.

 

The Directors have declared an interim dividend of US¢6.00 per share, unchanged from 2011.

 

GROUP REVIEW

Commercial Property

Leasing activity across the Hong Kong market was subdued due to general economic uncertainty.  Nonetheless, vacancy in the Group's Central office portfolio at the end of June was low at 3.1%, while its retail portfolio was fully let in both Macau and Hong Kong.  The Group's average office rent was HK$89.3 per sq. ft in the first half of the year, compared with HK$85.6 per sq. ft in the first half of 2011.  The average retail rent rose to HK$165.3 per sq. ft.

 

In Singapore, the office portfolio was almost fully leased with the exception of the third office tower of Marina Bay Financial Centre.  This building, which was recently completed, is now approximately 70% committed and tenants have commenced their fit-out.  In Jakarta, construction of the 88% pre-let, fourth office tower is nearing completion at the Group's joint venture development.

 

Planning is progressing on the Group's Wangfujing development, its first significant commercial project in Beijing, which is being designed as a premier retail centre incorporating a small luxury hotel.  Also in Beijing, the Group is to take a 30% interest in a consortium that will develop a prime Grade A office building of some 120,000 sq. m in the CBD Core Area of the Chaoyang District.

 

Residential Property

In Hong Kong, 18 additional apartments of Serenade were sold, of which eight were handed over to buyers in the first half of the year.  At the One Central project in Macau, a further 13 units were sold, most of which will be handed over to buyers in the second half of the year.

 

In Singapore, there were no residential completions in the period, in contrast to the first half of 2011, when the Group's wholly-owned subsidiary, MCL Land, completed its Peak@Balmeg project.  In the second half of 2012, Parvis, a 248-unit development held through a 50%-owned joint venture and D'Mira, a 100%-owned 65-unit development are expected to be completed.  In March, MCL Land launched its 679-unit Ripple Bay development, which is now 81% pre-sold.  In addition, the company has six previously launched projects under construction of which only one, Uber 388, is not yet fully pre-sold.  An additional residential development site in Singapore is being acquired for approximately US$300 million with completion in August.

 

In Chongqing, at the 50%-held Bamboo Grove, a further 474 units of Phase 4B have been handed over to buyers since the beginning of the year and some 250 units are scheduled for handover in the second half.  At Phase 5A, due for completion later this year, 69% of the 640 units have been pre-sold.  Sales continue at other Group projects in Chongqing and Shenyang and at Maple Place in Beijing.

 

FINANCE

The Group remained in a strong financial position with net debt at US$3.1 billion compared with US$2.4 billion at the end of 2011.  The increase was due to land instalment payments for previously acquired sites in China, including the Wangfujing site in Beijing.  Gearing at 30th June 2012 was 12%.  The Group issued US$500 million of 4.5% 10-year Notes in June.

 

OUTLOOK

While conditions remain uncertain, the Group's commercial portfolio in Hong Kong is well positioned due to the lack of new commercial space entering the market.  The contribution from residential developments in the second half is expected to benefit from the completion of two projects in Singapore and additional profits in Hong Kong. 

 

Simon Keswick

Chairman

26th July 2012

 

 

 



 



Hongkong Land Holdings Limited

Consolidated Profit and Loss Account


































(unaudited)

Six months ended 30th June


Year ended 31st December



           2012


            2011


            2011


Underlying

business

performance

US$m



Non-

trading

items

US$m




Total

US$m


Underlying

business

performance

US$m



Non-

trading

items

US$m




Total

US$m

Underlying

business

performance US$m



Non-

trading

items

US$m




Total

US$m










































































Revenue (note 2)


478.4




-




478.4




754.7




-




754.7




1,223.7




-




1,223.7


Net operating costs (note 3)


(119.8)




-




(119.8)




(299.7)




-




(299.7)




(392.0)




-




(392.0)


Change in fair value of investment properties


-




250.8




250.8




-




3,301.3




3,301.3




-




4,382.7




4,382.7






































Operating profit (note 4)


358.6




250.8




609.4




455.0




3,301.3




3,756.3




831.7




4,382.7




5,214.4










































































Financing charges


(46.9)




-




(46.9)




(52.4)




-




(52.4)




(99.7)




-




(99.7)


Financing income


18.0




-




18.0




16.7




-




16.7




33.2




-




33.2










































































Net financing charges


(28.9)




-




(28.9)




(35.7)




-




(35.7)




(66.5)




-




(66.5)


Share of results of associates and joint ventures (note 5)

42.0




59.7




101.7




22.1




138.5




160.6




76.3




221.7




298.0






































Profit before tax


371.7




310.5




682.2




441.4




3,439.8




3,881.2




841.5




4,604.4




5,445.9


Tax (note 6)


(51.5)




0.1




(51.4)




(73.8)




(0.3)




(74.1)




(133.6)




(0.9)




(134.5)






































Profit after tax


320.2




310.6




630.8




367.6




3,439.5




3,807.1




707.9




4,603.5




5,311.4






































Attributable to:




































Shareholders of the Company


318.2




307.6




625.8




365.3




3,439.2




3,804.5




703.4




4,603.0




5,306.4


Non-controlling interests


2.0




3.0




5.0




2.3




0.3




2.6




4.5




0.5




5.0








































320.2




310.6




630.8




367.6




3,439.5




3,807.1




707.9




4,603.5




5,311.4




















































































US¢












US¢












US¢










































































Earnings per share (note 7)




































- basic










26.73












164.82












228.48


- diluted










26.63












162.94












227.13








































 

 

 

 

 


 


Hongkong Land Holdings Limited

Consolidated Statement of Comprehensive Income






















(unaudited)

Six months ended

30th June




Year ended

31st

December







2012

US$m






2011 

US$m 






2011

US$m









































Profit for the period




630.8 






3,807.1 






5,311.4 









































Revaluation of other investments




17.4 






6.0 






(10.7)



Net actuarial loss on employee benefit plans




- 






- 






(4.6)



Net exchange translation differences




40.0 






64.7 






36.9 



Cash flow hedges






































- net gain/(loss) arising during the period




23.2 






(14.9)






(1.2)



- transfer to profit and loss




2.3 






2.6 






5.8 













































25.5 






(12.3)






4.6 



Share of other comprehensive income of associates and joint ventures




15.8 






65.8 






2.8 



Tax relating to components of other comprehensive income




(4.0)






1.9 






(0.2)









































Other comprehensive income for the period




94.7 






126.1 






28.8 






















Total comprehensive income for the period




725.5 






3,933.2 






5,340.2 






















Attributable to:



















Shareholders of the Company




720.5 






3,930.6 






5,335.2 



Non-controlling interests




5.0 






2.6 






5.0 


























725.5 






3,933.2 






5,340.2 





















 

 


Hongkong Land Holdings Limited

Consolidated Balance Sheet






(unaudited)

At 30th June



At 31st

December





2012

US$m




2011 

US$m 




2011

US$m




























Net operating assets













Investment properties (note 9)



23,332.8 




21,380.5 




22,529.9 


Fixed assets



4.9 




4.9 




5.3 


Associates and joint ventures



3,630.5 




3,492.5 




3,551.8 


Other investments



66.0 




65.2 




48.6 


Deferred tax assets



4.7 




9.6 




5.5 


Pension assets



6.4 




10.8 




6.4 


Non-current debtors



81.4 




53.7 




72.0 















Non-current assets



27,126.7 




25,017.2 




26,219.5 




























Properties for sale



1,910.0 




1,085.4 




1,521.2 


Current debtors



514.6 




397.5 




313.5 


Current tax assets



3.7 




- 




1.5 


Bank balances



815.5 




771.4 




967.9 















Current assets



3,243.8 




2,254.3 




2,804.1 















Current creditors



(939.9)




(616.3)




(746.3)


Current borrowings (note 10)



(535.1)




(285.6)




(58.0)


Current tax liabilities



(84.1)




(101.5)




(82.5)















Current liabilities



(1,559.1)




(1,003.4)




(886.8)




























Net current assets



1,684.7 




1,250.9 




1,917.3 


Long-term borrowings (note 10)



(3,428.2)




(2,662.1)




(3,269.2)


Deferred tax liabilities



(64.0)




(58.1)




(59.4)


Non-current creditors



(43.3)




(99.4)




(44.4)


















25,275.9 




23,448.5 




24,763.8 















Total equity













Share capital



234.4 




232.5 




233.8 


Revenue and other reserves



25,011.2 




23,192.5 




24,504.7 















Shareholders' funds



25,245.6 




23,425.0 




24,738.5 


Non-controlling interests



30.3 




23.5 




25.3 


















25,275.9 




23,448.5 




24,763.8 



















Hongkong Land Holdings Limited

Consolidated Statement of Changes in Equity






















                  Attributable to shareholders of the Company



Share

capital

US$m


Share

premium

US$m


Revenue

reserves

US$m

Capital

reserves

US$m


Hedging

reserves

US$m


Exchange

reserves

US$m


Total

US$m


Attributable

to non-

controlling interests

US$m



Total equity US$m









































Six months ended 30th June 2012




















At 1st January 2012


233.8


315.8


23,881.1


1.5


(13.7)


320.0


24,738.5


25.3



24,763.8

Total comprehensive income


-


-


643.2


-


20.1


57.2


720.5


5.0



725.5

Dividends paid by the Company


-


-


(234.2)


-


-


-


(234.2)


-



(234.2)

Issue of shares


0.6


20.2


-


-


-


-


20.8


-



20.8

Transfer


-


-


1.0


(1.0)


-


-


-


-



-





















At 30th June 2012


234.4


336.0


24,291.1


0.5


6.4


377.2


25,245.6 


30.3



25,275.9





















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




Total comprehensive income for the six months ended 30th June 2012 included in revenue reserves comprises profit attributable to shareholders of the Company of US$625.8 million (2011: US$3,804.5 million) and net fair value gain on other investments of US$17.4 million (2011: US$6.0 million).  Cumulative net fair value gain on other investments and net actuarial loss on employee benefit plans amounted to US$26.2 million and US$3.0 million, respectively.

 





















Year ended 31st December 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


-


-


5,291.9


-


2.5 


40.8


5,335.2


5.0



5,340.2

Dividends paid by the Company


-


-


(372.5)


-


-


-


(372.5)


-



(372.5)

Dividends paid to non-controlling shareholders


-


-


-


-


-


-


-


(0.6)



(0.6)

Issue of shares


8.7


310.5


-


-


-


-


319.2


-



319.2 

Transfer


-


-


61.0


(61.0)


-


-


-


-



- 





















At 31st December 2011


233.8


315.8


23,881.1


1.5


(13.7)


320.0


24,738.5


25.3



24,763.8 






















Total comprehensive income for the year ended 31st December 2011 included in revenue reserves comprises profit attributable to shareholders of the Company of US$5,306.4 million, net fair value loss on other investments of US$10.7 million and net actuarial loss on employee benefit plans of US$3.8 million.  Cumulative net fair value gain on other investments and net actuarial loss on employee benefit plans amounted to US$8.8 million and US$3.0 million, respectively.























 



Hongkong Land Holdings Limited

Consolidated Cash Flow Statement


















(unaudited)

Six months ended

30th June



Year ended 31st December





2012

US$m




2011

US$m




2011

US$m




























Operating activities







































Operating profit



609.4 




3,756.3 




5,214.4 


Depreciation



1.1 




0.7 




1.7 


Reversal of writedowns on development properties held for sale



(6.1)




- 




(44.2)


Change in fair value of investment properties



(250.8)




(3,301.3)




(4,382.7)


(Increase)/decrease in properties for sale



(375.6)




134.7 




(298.8)


Increase in debtors, prepayments and others



(199.1)




(149.4)




(70.7)


Increase/(decrease) in creditors and accruals



164.7 




(105.3)




33.2 


Interest received



16.9 




20.5 




35.8 


Interest and other financing charges paid



(24.5)




(52.5)




(93.0)


Tax paid



(50.9)




(40.8)




(117.4)


Dividends from associates and joint ventures



47.2 




23.3 




58.0 




























Cash flows from operating activities



(67.7)




286.2 




336.3 















Investing activities







































Major renovations expenditure



(21.9)




(21.3)




(50.8)


Developments capital expenditure



(488.8)




(1.0)




(38.3)


Investments in and loans to associates and joint ventures



7.6 




(74.8)




(146.2)




























Cash flows from investing activities



(503.1)




(97.1)




(235.3)















Financing activities







































Drawdown of borrowings



1,173.3 




81.8 




1,068.1 


Repayment of borrowings



(545.4)




(641.5)




(1,193.4)


Contribution from/(repayment to) non-controlling shareholders



22.7 




(3.8)




(6.1)


Dividends paid by the Company



(233.6)




(231.0)




(370.9)


Dividends paid to non-controlling shareholders



- 




- 




(0.6)




























Cash flows from financing activities



417.0 




(794.5)




(502.9)















Net decrease in cash and cash equivalents



(153.8)




(605.4)




(401.9)


Cash and cash equivalents at beginning of period



966.7 




1,365.7 




1,365.7 


Effect of exchange rate changes



2.1 




10.5 




2.9 















Cash and cash equivalents at end of period



815.0 




770.8 




966.7 

















 

 


 

Hongkong Land Holdings Limited

Notes

 


 



 

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.

 

Amendments to IFRS 7 'Financial Instruments: Disclosures - Transfer of Financial Assets' became effective in the current accounting period and are relevant to the Group's operations.  The amendments promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfer of financial assets and the effect of these risks on an entity's financial position particularly those involving securitisation of financial assets.

 

 


There have been no changes to the accounting policies described in the 2011 annual financial statements upon the adoption of the above amendments and interpretations to existing standards.

 

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not effective.

 

 



 

2.

REVENUE

 

 


Six months ended 30th June

 




2012

US$m


2011

US$m

 







 







 


Rental income


366.9


348.2

 


Service income


57.6


54.6

 


Sales of trading properties


53.9


351.9

 







 




478.4


754.7

 



 


Service income includes service and management charges and hospitality service income.

 

 



 

3.

NET OPERATING COSTS

 

 


Six months ended 30th June

 




2012

US$m


2011

US$m













Cost of sales


(85.0)


(267.9)


Other income


3.5


2.3


Administrative expenses


(38.3)


(34.1)










(119.8)


(299.7)



 

4.

OPERATING PROFIT

 


Six months ended 30th June


 





2012

US$m




2011

US$m


 











 











 


By business









 


Commercial property



358.1




342.4


 


Residential property



27.3




135.0


 


Corporate



(26.8)




(22.4)


 











 





358.6




455.0


 


Change in fair value of investment properties









 











 











 


- Commercial property



246.6




3,287.3


 


- Residential property



4.2




14.0


 











 











 





250.8




3,301.3


 











 





609.4




3,756.3


 











 



 

5.

SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES

 


Six months ended 30th June


 





2012

US$m




2011

US$m


 











 











 


By business









 


Commercial property









 











 











 


- Operating profit



45.5




38.3


 


- Net financing charges



(15.8)




(13.7)


 


- Tax



(4.6)




(5.3)


 











 











 


- Net profit



25.1




19.3


 











 


Residential property









 











 











 


- Operating profit



28.5




6.9


 


- Net financing charges



(0.9)




(3.2)


 


- Tax



(10.8)




(0.9)


 


- Non-controlling interests



0.1




-


 











 











 


- Net profit



16.9




2.8


 











 


Underlying business performance



42.0




22.1


 


Non-trading items:









 


Change in fair value of investment properties

(net of deferred tax)









 











 











 


- Commercial property



59.8




134.7


 


- Residential property



(0.1)




3.8


 











 











 





59.7




138.5


 











 





101.7




160.6


 



 

6.

TAX

 

 


Six months ended 30th June


 





2012

US$m




2011

US$m


 











 











 


Tax (charged)/credited to profit and loss is analysed as follows:









 


Current tax



(50.0)




(71.3)


 


Deferred tax









 


- changes in fair value of investment properties



0.1




(0.3)


 


- other temporary differences



(1.5)




(2.5)


 











 





(51.4)




(74.1)


 











 


Tax (charged)/credited relating to components of other comprehensive income is analysed as follows:









 


Cash flow hedges



(4.0)




1.9


 











 


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 (2011: nil).

 

Share of tax of associates and joint ventures of US$25.5 million (2011: US$11.8 million) is included in share of results of associates and joint ventures.

 

 

7.

EARNINGS PER SHARE

 


Basic earnings per share is calculated on profit attributable to shareholders of US$625.8 million (2011: US$3,804.5 million) and on the weighted average number of 2,341.1 million (2011: 2,308.3 million) shares in issue during the period.

 

Diluted earnings per share is calculated on profit attributable to shareholders of US$626.0 million (2011: US$3,807.5 million), which is after adjusting for the effects of the conversion of convertible bonds, and on the weighted average number of 2,350.7 million (2011: 2,336.7 million) shares in issue during the period.  The weighted average number of shares is arrived at as follows:

 


Ordinary shares in millions




2012


2011














Weighted average number of shares in issue


2,341.1


2,308.3


Adjustment for shares to be issued on conversion of convertible bonds


9.6


28.4








Weighted average number of shares for diluted earnings per share calculation


2,350.7


2,336.7








Earnings per share is additionally calculated based on underlying profit attributable to shareholders.  A reconciliation of earnings is set out below:





Six months ended 30th June



2012


2011



US$m

Basic

earnings

per

share

US¢

Diluted

earnings

per

share

US¢


US$m

Basic

earnings

per

share

US¢

Diluted

earnings

per

share

US¢




























Underlying profit attributable to shareholders

318.2


13.59




365.3


15.83




Non-trading items

 (note 8)

307.6






3,439.2



















Profit attributable to shareholders

625.8


26.73




3,804.5


164.82

















Interest expense on convertible bonds

 (net of tax)

0.2






3.0



















Profit for calculation of diluted earnings

 per share

626.0




26.63


3,807.5




162.94














 

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






2012

US$m




2011

US$m























Change in fair value of investment properties



250.8




3,301.3



Deferred tax on change in fair value of investment properties



0.1




(0.3)



Share of change in fair value of investment properties of associates and joint ventures (net of deferred tax)



59.7




138.5



Non-controlling interests



(3.0)




(0.3)
















307.6




3,439.2






















9.

INVESTMENT PROPERTIES

 



Six months ended 30th June


Year ended

31st

December






2012

US$m




2011

US$m




2011

US$m































Net book value at beginning of period



22,529.9




18,036.0




18,036.0



Exchange differences



39.4




26.1




28.1



Additions



512.7




17.1




83.1



Net revaluation surpluses



250.8




3,301.3




4,382.7

















Net book value at end of period



23,332.8




21,380.5




22,529.9






























 

10.

BORROWINGS

 

 



At 30th June


At 31st December


 





2012

US$m




2011

US$m




2011

US$m


 















 















 


Current













 















 















 


Bank overdrafts



0.5




0.6




1.2


 


Current portion of long-term borrowings













 


- Bank loans



498.4




285.0




0.3


 


- 2.75% United States dollar convertible bonds due 2012



36.2




-




56.5


 















 















 





535.1




285.6




58.0


 


Long-term













 















 















 


Bank loans



462.7




440.3




1,062.7


 


5.5% United States dollar bonds due 2014



537.4




548.4




544.8


 


3.65% Singapore dollar notes due 2015



294.8




306.8




290.3


 


2.75% United States dollar convertible bonds due 2012



-




104.8




-


 


Medium term notes



2,133.3




1,261.8




1,371.4


 















 















 





3,428.2




2,662.1




3,269.2


 















 





3,963.3




2,947.7




3,327.2


 















 















 

11.

DIVIDENDS

 







 



Six months ended 30th June


 





2012

US$m




2011

US$m


 











 











 


Final dividend in respect of 2011 of US¢10.00

(2010: US¢10.00) per share 



234.2




232.3


 











 


An interim dividend in respect of 2012 of US¢6.00 (2011: US¢6.00) per share amounting to a total of US$140.6 million (2011: US$139.5 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2012.

 



 

12.

CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES








Total capital commitments at 30th June 2012 and 31st December 2011 amounted to US$1,025.5 million and US$1,371.3 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

 


The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate holding company is Jardine Matheson Holdings Limited.  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 Jardine Matheson Holdings Limited ('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 in 2012 was US$1.6 million (2011: US$1.8 million), being 0.5% per annum of the Group's underlying profit in 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 2012 amounted to US$11.0 million (2011: US$10.5 million).

 

Jardine Matheson group members provided property construction, maintenance and other services to the Group in 2012 in aggregate amounting to US$14.7 million (2011: US$18.8 million).

 

The outstanding balances arising from the above services at 30th June 2012 are not material.

 

Hotel management services

Jardine Matheson group members provided hotel management services to the Group in 2012 amounting to US$1.2 million (2011: US$0.9 million).

 

The outstanding balances arising from the above services at 30th June 2012 are not material.

 

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 68 of the Company's Annual Report for 2011, 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

 

26th July 2012

 




 




 


The interim dividend of US¢6.00 per share will be payable on 10th October 2012 to shareholders on the register of members at the close of business on 17th August 2012.  The ex-dividend date will be on 15th August 2012, and the share registers will be closed from 20th to 24th August 2012, 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 2012  interim  dividend by  notifying  the  United  Kingdom  transfer  agent  in  writing  by  21st September 2012.  The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 26th September 2012.  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 has been instrumental in the creation of the city-state's new Central Business District at Marina Bay 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 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.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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