Interim Results - Part 2

Hongkong Land Hldgs Ld 29 July 2003 ----------------------------------------------------------------- Hongkong Land Holdings Limited Notes ----------------------------------------------------------------- 1. ACCOUNTING POLICIES AND BASIS OF PREPARATION The unaudited interim condensed financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting. There have been no changes to the accounting policies described in the 2002 annual financial statements. As in 2002, the Group is required to account for leasehold land in respect of investment and other properties at amortised cost in order to comply with IFRS. This treatment does not reflect the generally accepted accounting practice in the territories in which the Group has significant leasehold interests, nor how management measures the performance of the Group. Accordingly, the Group has presented supplementary financial information on pages 5 to 8 prepared in accordance with IFRS as modified by the revaluation of leasehold properties. The Directors continue to review the appropriateness of the Group's accounting policies and disclosures in the light of developments in IFRS. 2. REVENUE Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------------- Property Rental income 154.0 161.1 Service and management charges 29.8 29.5 ------------ ----------- 183.8 190.6 ------------ ----------- 3. ASSET IMPAIRMENTS AND DISPOSALS Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------------- Impairment provisions on properties (40.7) (57.3) Other asset impairment reversals 4.7 - Gain on dilution of interest in a joint venture - 2.2 ------------ ----------- (36.0) (55.1) ------------ ----------- By business Property (40.4) (57.3) Infrastructure 4.4 2.2 ------------ ----------- (36.0) (55.1) ------------ ----------- 4. OPERATING PROFIT Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------------- By business Property 124.1 138.1 Infrastructure (0.7) (0.8) Corporate (10.3) (9.9) ------------ ----------- 113.1 127.4 Asset impairments and disposals (see Note 3) (36.0) (55.1) ------------ ----------- 77.1 72.3 ------------ ----------- 5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------------- By business Property (2.0) (1.1) Infrastructure (0.2) (0.2) Corporate - 0.5 ------------ ----------- (2.2) (0.8) ------------ ----------- 6. TAX Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------------- Company and subsidiaries 13.0 13.7 Associates and joint ventures 0.2 0.3 ------------ ----------- 13.2 14.0 ------------ ----------- Tax on profits is provided at the rates of taxation prevailing in the territories in which the Group operates. 7. EARNINGS PER SHARE Earnings per share are calculated on net profit of US$28.5 million (2002: US$27.7 million) and on the weighted average number of 2,225.6 million (2002: 2,225.6 million) shares in issue during the period, which excludes 69.6 million shares in the Company held by a wholly-owned subsidiary. Earnings per share reflecting the revaluation of leasehold properties are calculated on net loss of US$872.2 million (2002: loss of US$506.0 million) as shown in the supplementary financial information. Additional earnings per share are also calculated based on underlying net profit. The difference between underlying net profit and net profit is reconciled as follows: Prepared in accordance with Prepared in IFRS as modified by revaluation accordance with IFRS of leasehold properties Six months ended 30th June Six months ended 30th June 2002 2003 2003 2002 US$m US$m US$m US$m ----------------------------- ------------------------------------ 27.7 28.5 Net profit/(loss) (872.2) (506.0) - - Revaluation of leasehold properties 957.6 603.9 55.1 37.5 Asset impairments and disposals (1.7) (2.2) ----------- ---------- ----------- ---------- 82.8 66.0 Underlying net profit 83.7 95.7 ----------- ---------- ----------- ---------- 8. TANGIBLE ASSETS Prepared in accordance with IFRS Year ended 31st Six months ended 30th June December 2003 2002 2002 US$m US$m US$m ------------------------------------------ Net book value at beginning of period 915.7 819.1 819.1 Exchange rate adjustments (1.5) 5.6 8.0 Additions 14.3 112.6 118.7 Depreciation (14.8) (11.7) (26.4) Release of contingency - - (3.7) ---------- ---------- ----------- Net book value at end of period 913.7 925.6 915.7 ---------- ---------- ----------- 9. BORROWINGS Prepared in accordance with IFRS At 31st At 30th June December 2003 2002 2002 US$m US$m US$m -------------------------------------- Current Bank overdrafts 2.7 2.9 4.0 Short-term borrowings 57.7 38.4 38.5 Current portion of long-term borrowings 32.0 41.0 25.6 92.4 82.3 68.1 Long-term borrowings Bank loans 1,175.3 1,235.6 1,389.0 7% bonds due 2011 710.0 618.6 685.6 3% notes due 2006 190.6 - - 2,075.9 1,854.2 2,074.6 ----------- ---------- ---------- 2,168.3 1,936.5 2,142.7 ----------- ---------- ---------- Secured 2.0 491.7 264.8 Unsecured 2,166.3 1,444.8 1,877.9 ----------- ---------- ---------- 2,168.3 1,936.5 2,142.7 ----------- ---------- ---------- Hong Kong Dollar 1,827.3 1,711.8 1,805.3 Singapore Dollar 274.7 220.8 275.6 United States Dollar 65.9 3.3 61.1 Vietnamese Dong 0.4 0.6 0.7 ----------- ---------- ---------- 2,168.3 1,936.5 2,142.7 ----------- ---------- ---------- 10. DIVIDENDS Prepared in accordance with IFRS Six months ended 30th June 2003 2002 US$m US$m ----------------------- Final dividend in respect of 2002 of USc4.00 (2001: USc5.50) per share 89.0 122.4 --------- -------- An interim dividend in respect of 2003 of USc2.00 (2002: USc3.50) per share amounting to a total of US$44.5 million (2002: US$77.9 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2003. 11. CASH FLOW PER SHARE Cash flow per share is based on cash flows from operating activities less major renovations expenditure amounting to US$57.4 million (2002: US$92.6 million) and is calculated on the weighted average of 2,225.6 million (2002: 2,225.6 million) shares in issue during the period, which excludes 69.6 million shares in the Company held by a wholly-owned subsidiary. 12. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES Prepared in accordance with IFRS At 31st At 30th June December 2003 2002 2002 US$m US$m US$m ------------------------------------- Capital commitments 611.4 503.6 434.4 -------- --------- --------- Guarantees in respect of - facilities made available to joint ventures 23.3 38.5 30.1 - Container Terminal 9 development in Hong Kong 74.2 89.5 78.1 -------- --------- --------- The interim dividend of USc2.00 per share will be payable on 15th October 2003 to shareholders on the register of members at the close of business on 22nd August 2003. The ex-dividend date will be on 20th August 2003, and the share registers will be closed from 25th to 29th August 2003, 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 25th September 2003. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 2nd October 2003. 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. - end - For further information, please contact: Hongkong Land Limited N R Sallnow-Smith (852) 2842 8300 Francis Heng (852) 2842 8400 Matheson & Co Limited Martin Henderson (44) 20 7816 8135 Golin/Harris Forrest Rosemary Sayer (852) 2501 7928 Weber Shandwick Square Mile Richard Hews/ Christian San Jose (44) 20 7067 0700 This and other Group announcements can be accessed through the Internet at 'www.hkland.com' NOTE TO EDITORS Hongkong Land is a leading property investment, management and development group with a major portfolio in Hong Kong where it owns and manages some five million sq. ft of prime office and retail space in the heart of the Central business district. Hongkong Land Limited manages these assets and the Group's other property and infrastructure interests in Asia from Hong Kong by providing services to Group companies. Hongkong Land Holdings Limited is incorporated in Bermuda with its primary share listing in London. The Company's shares are also listed in Singapore and Bermuda. In addition, it has a sponsored American Depositary Receipt programme. Hongkong Land is a member of the Jardine Matheson Group. This information is provided by RNS The company news service from the London Stock Exchange

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