Final Results
Hongkong Land Hldgs Ld
06 March 2008
To: Business Editor 6th March 2008
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
2007 PRELIMINARY ANNOUNCEMENT OF RESULTS
Highlights
• Continued strength in Hong Kong capital values, rents and occupancy
• Good profits from residential developments in Singapore and mainland China
• Underlying earnings per share up 37%
• Adjusted net assets per share* up 29%
• Full-year dividend per share increased by 30%
'The positive rental reversion cycle in Hong Kong together with the recognition
of profits on the completion of residential properties will continue to enhance
earnings in 2008 and beyond, while the Group's strong balance sheet will stand
it in good stead if the economic environment becomes more difficult.'
Simon Keswick, Chairman
6th March 2008
Results
--------------------------------------------------------------------------------
Year ended 31st December
2007 2006 Change
US$m US$m %
--------------------------------------------------------------------------------
Underlying profit attributable
to shareholders 345 245 +41
Profit attributable
to shareholders 2,840 1,901 +49
Shareholders' funds 11,833 9,197 +29
Adjusted shareholders' funds* 14,041 10,922 +29
Net debt 2,431 2,312 +5
--------------------------------------------------------------------------------
USc USc %
--------------------------------------------------------------------------------
Underlying earnings per share 15.02 10.98 +37
Earnings per share 123.72 85.31 +45
Dividends per share 13.00 10.00 +30
--------------------------------------------------------------------------------
US$ US$ %
--------------------------------------------------------------------------------
Net asset value per share 5.16 4.01 +29
Adjusted net asset value per share* 6.12 4.76 +29
--------------------------------------------------------------------------------
* In preparing the Group's financial statements under International
Financial Reporting Standards ('IFRS'), the fair value model for
investment properties has been adopted. In accordance with this model,
the Group's leasehold investment properties have been included at their
open market value as determined by independent valuers. In the
territories where the Group has significant leasehold investment
properties, no capital gains tax would be payable on the sale of these
properties. In relation to leasehold investment properties, however,
IFRS require deferred tax on any revaluation amount to be calculated
using income tax rates. This is in contrast to the treatment for the
revaluation element of freehold properties where IFRS require capital
gains tax rates to be used.
As Management considers that the Group's long leasehold properties have
very similar characteristics to freehold property, the adjusted
shareholders' funds and adjusted net asset value per share information
is presented on the basis that would be applicable if the leasehold
properties were freehold. The adjustments made add back the deferred tax
provided in the financial statements that would not be payable if the
properties were sold. See note 11.
--------------------------------------------------------------------------------
The final dividend of USc9.00 per share will be payable on 14th May 2008,
subject to approval at the Annual General Meeting to be held on 7th May 2008, to
shareholders on the register of members at the close of business on 20th March
2008. The ex-dividend date will be on 18th March 2008, and the share registers
will be closed from 24th to 28th March 2008, inclusive.
HONGKONG LAND HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 2007
OVERVIEW
Broad-based demand and higher occupancy in Hong Kong's Central district
continued to drive rents and capital values higher in both the office and retail
sectors in 2007. A number of the Group's residential development projects also
reached completion during the year leading to a higher contribution from this
sector. Overall, the Group made good progress towards its strategic aims of
extending its reach regionally and developing a significant capability in the
residential sector.
PERFORMANCE
Positive rental reversions throughout 2007 led to a growth in net rental income
of 26% compared with 2006. The completion of residential projects in mainland
China and Singapore enabled a profit of US$73 million to be recognised, an
increase of 90% over that of the prior year. Financing charges were lower than
in 2006 largely due to higher interest income received. Overall, underlying
profit rose 41% to US$345 million.
Capital values in the Group's investment property portfolio rose sharply,
exceeding the gains recorded in 2006. The independent valuation of the Group's
commercial investment properties at the end of 2007, including the Group's share
of investment properties in joint ventures and associates, was US$15,075
million, representing an increase of 25%. Adjusted net asset value per share
rose 29% to US$6.12. Profit attributable to shareholders for the year, including
the revaluation, was US$2,840 million compared with US$1,901 million in 2006.
Following an increase in the interim dividend, the Directors are also
recommending a higher final dividend of USc9.00 per share for 2007, providing a
total dividend for the year of USc13.00 per share, up 30%.
GROUP REVIEW
Rents continued to rise in Hong Kong's Central district for the fourth
consecutive year. There was demand for high quality commercial office space
across all business sectors, and rents and occupancy reached their strongest
levels in a decade. While new supply is now becoming available elsewhere in Hong
Kong, there is little to be found in Central and so far the effect on the
Group's portfolio has been minimal. The luxury retail market also performed well
in Hong Kong during the year, underpinning the contribution from the Group's
premium luxury retail space in Central.
The Singapore office market also witnessed further rent increases, supported by
expansion in the financial services sector. The Group's results include the
first full-year contribution from the One Raffles Quay properties. This strong
demand has enabled the Group to enter into a number of pre-commitments for space
in the Marina Bay Financial Centre joint venture development, a partnership with
Cheung Kong and Keppel Land, which is due to complete in two phases in 2010 and
2011.
In the residential sector, Phase III of Central Park in Beijing and MCL Land's
'The Calrose' were completed before the year end, which allowed profits on these
projects to be recognised in the 2007 results. There were also a number of
successful sales launches during the year, including Phase I of Bamboo Grove in
Chongqing and four MCL Land projects in Singapore, with almost all units sold
following release. After a slow start, sales of Phase IV of Central Park in
Beijing have improved significantly.
OUTLOOK
In conclusion, the Chairman, Simon Keswick said, 'The positive rental reversion
cycle in Hong Kong together with the recognition of profits on the completion of
residential properties will continue to enhance earnings in 2008 and beyond,
while the Group's strong balance sheet will stand it in good stead if the
economic environment becomes more difficult.'
CHIEF EXECUTIVE'S REVIEW
With the refurbishment and extension of the Landmark complex now largely
complete and the 'Cityscape' street environment upgrade project in its final
stages, our Hong Kong portfolio, which remains our prime focus of attention, is
enjoying strong rental income growth and close to 100% occupancy. Despite new
supply becoming available in some decentralised areas in Hong Kong and Kowloon,
the continuing strong demand for space in the Group's buildings confirms
Central's undisputed position as Hong Kong's centre for international business
and its leading destination for luxury retail.
The broadening of our commercial property activities regionally has continued to
progress well. In 2007 we saw the first full-year contribution from One Raffles
Quay ('ORQ') in Singapore, which is fully let, while the construction of the
190,000 sq.m. of gross floor area of Phase I of the Marina Bay Financial Centre
('MBFC') remains on track for completion in 2010. In February the MBFC
consortium partners exercised their option to develop the remainder of the MBFC
site. This second phase will comprise some 140,000 sq.m. of gross floor area of
premium office space and is scheduled for completion in 2011. These developments
will give Hongkong Land a critical mass of prime commercial office space in this
important Asian market.
Our aim is also to grow our residential business so that it can make a
significant, capital-efficient and sustainable contribution to profit. Following
successful launches of projects in Macau, Singapore and Beijing, and the
acquisition of MCL Land in 2006, further progress was made in 2007 with well
received launches in Chongqing and Singapore. The Group also acquired further
development sites in 2007, thereby ensuring a steady stream of project
completions in the years ahead. MCL Land acquired three new sites and entered
into agreements to acquire two others. Together with USI Holdings Limited, the
Group has entered into a 50/50 joint venture with a local developer to acquire
residential development sites in Shenyang in mainland China totalling some
200,000 sq.m.
COMMERCIAL PROPERTY
Hong Kong Central Portfolio
Office rents in Central in Hong Kong increased for a fourth consecutive year
leading to a 32% rise in average rents during 2007. Vacancy fell from 4.5% at
the end of 2006 to 2% at the year end. The reversion pattern in our portfolio
has been strongly positive since mid-2005, and this will continue in 2008 with
market rents now exceeding HK$100 psf per month in most buildings.
Even though significant new supply is now approaching completion in a number of
decentralised locations, demand for high quality centrally-located space remains
strong. While some tenants have elected to relocate to areas outside Central,
many others are renewing leases and seeking additional space, more than
compensating for those who are leaving.
The first full-year contribution was made by York House in 2007, following
receipt of its full Occupation Permit at the end of 2006. All but one floor of
York House had been leased by the end of the year, thereby ensuring a further
increase in its contribution to net rental income in 2008.
The luxury retail sector generated increased sales again in 2007, enjoying
another buoyant year, with an exceptional Christmas season.
Commercial Properties other than in Hong Kong
Singapore continued to increase in significance to the Group in 2007 with the
first full-year contribution from ORQ, which was fully let on completion in
2006. One Raffles Link, our wholly-owned development in the city, also remains
fully let at good rents. The decision by Hongkong Land and its consortium
partners to exercise the option to acquire the remainder of the land at the MBFC
was made against the backdrop of continuing strong demand for high quality
office space in Singapore. The office portion of Phase II of MBFC, which will
comprise some 140,000 sq. m. of gross floor area, is scheduled to complete in
2011.
Construction of One Central, our joint venture development with Shun Tak in the
heart of the Macau peninsula, is on track for completion in 2009. One Central
will comprise some 37,000 sq. m. of luxury retail space together with a Mandarin
Oriental hotel, serviced apartments and 137,000 sq. m. of residential
apartments.
Our commercial investment properties in other markets in the region are located
in Hanoi, Jakarta and Bangkok. Our two buildings in Hanoi are fully let in a
market where rents continue to strengthen and Jakarta Land's portfolio is
achieving occupancy levels of over 93% at premium rents. In Bangkok, however,
our 49%-owned luxury retail centre and office development, Gaysorn, continues to
experience difficult trading conditions in a weak market.
RESIDENTIAL PROPERTY
The profit contribution from our residential businesses in 2007 rose by 90% over
that for 2006. This was due mainly to the contribution from Phase III of Central
Park, our joint venture development in Beijing, and MCL Land's project, 'The
Calrose', in Singapore. From a sales perspective, the Group had another good
year with launches in Chongqing and four MCL Land projects in Singapore being
largely sold within a short period of the projects being launched.
The 796 unit residential element of One Central in Macau is now over 97%
pre-sold. In Singapore, construction of Marina Bay Residences, the residential
component of the first phase of the MBFC, is on schedule for handover in 2010.
Phase II of the MBFC will also incorporate a tower of residential apartments,
Marina Bay Suites.
Construction of the final phase of Central Park, our joint venture development
in Beijing, is progressing well, with some 82% of the 492 units having been
pre-sold by the end of 2007. Completion is on schedule for the middle of 2008.
Elsewhere in mainland China, the sales launch of the 650 units in Phase I of
Bamboo Grove, our joint venture with the Longhu Group in Chongqing, was well
received with most units being sold soon after launch. This is the first of a
number of phases of this large site with a total land area of some 780,000 sq.m.
In December the Group, together with USI Holdings, acquired a 50% interest in a
200,000 sq. m. landbank in Shenyang in North-Eastern China. Hongkong Land has an
effective interest of 30% in the project.
MCL LAND
MCL Land completed three projects in 2007, 'Mera East', 'The Metz' and 'The
Calrose', and recorded a 97% increase in underlying earnings. MCL Land's
pre-sale of four new developments in 2007 exceeded expectations, with almost all
the units taken up. This has given MCL Land a good pipeline of profits that will
be recognised upon completion of the projects in 2009 and 2010. MCL Land also
acquired further sites in 2007 that should contribute to the Group's earnings
beyond 2009.
FINANCE
The Group's financial position remains healthy. At the end of 2007 adjusted
gearing was 17% with net debt at US$2.4 billion, up slightly from US$2.3 billion
at the end of 2006. While the Group did not have any major re-financing
requirements during the year, it took the opportunity of favourable borrowing
conditions to establish a number of new committed facilities.
OUTLOOK
Hong Kong's Central district is commanding premium rents at a time where only
limited supply will become available in the district in the medium term.
Accordingly the outlook for investment income remains positive, although
possible effects of the economic slowdown in the United States and Europe are
yet to be seen. The new projects that will complete in Singapore and Macau in
the coming years will strengthen further our commercial revenues. Our success in
residential sales in Macau, Singapore and mainland China will add an additional
stream of profits in the years ahead.
Y K Pang
Chief Executive
6th March 2008
------------------------------------------------------------------------------------------------------------------------
Hongkong Land Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2007
------------------------------------------------------------------------------------------------------------------------
2007 2006
Underlying Underlying
business Non-trading business Non-trading
performance items Total performance items Total
US$m US$m US$m US$m US$m US$m
------------------------------------------------------------------------------------------------------------------------
Revenue (note 2) 933.2 - 933.2 555.9 - 555.9
Cost of sales (note 3) (442.2) - (442.2) (197.5) - (197.5)
--------- --------- --------- --------- --------- ---------
Gross profit 491.0 - 491.0 358.4 - 358.4
Other income 0.6 - 0.6 23.0 - 23.0
Administrative and other expenses (52.2) - (52.2) (33.7) - (33.7)
--------- --------- --------- --------- --------- ---------
439.4 - 439.4 347.7 - 347.7
Increase in fair value of
investment properties (note 7) - 2,588.9 2,588.9 - 1,952.6 1,952.6
Asset impairment provisions,
reversals and disposals (note 7) - 9.4 9.4 - (5.8) (5.8)
--------- --------- --------- --------- --------- ---------
Operating profit 439.4 2,598.3 3,037.7 347.7 1,946.8 2,294.5
Net financing charges (50.0) - (50.0) (72.3) - (72.3)
Share of results of joint
ventures (note 4) 24.0 362.6 386.6 (0.2) 50.9 50.7
--------- --------- --------- --------- --------- ---------
Profit before tax 413.4 2,960.9 3,374.3 275.2 1,997.7 2,272.9
Tax (note 5) (56.2) (463.2) (519.4) (25.3) (340.2) (365.5)
--------- --------- --------- --------- --------- ---------
Profit for the year 357.2 2,497.7 2,854.9 249.9 1,657.5 1,907.4
--------- --------- --------- --------- --------- ---------
Attributable to:
Shareholders of the Company 344.7 2,494.9 2,839.6 244.7 1,656.2 1,900.9
Minority interests 12.5 2.8 15.3 5.2 1.3 6.5
--------- --------- --------- --------- --------- ---------
357.2 2,497.7 2,854.9 249.9 1,657.5 1,907.4
--------- --------- --------- --------- --------- ---------
------------------------------------------------------------------------------------------------------------------------
USc USc USc USc
------------------------------------------------------------------------------------------------------------------------
Earnings per share (note 6)
- basic 15.02 123.72 10.98 85.31
- diluted 15.02 119.18 10.98 82.35
------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hongkong Land Holdings Limited
Consolidated Balance Sheet
at 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------------------------------------------------------------------
Net operating assets
Tangible assets (note 8)
Investment properties 14,260.6 11,650.7
Others 12.3 13.1
--------- ---------
14,272.9 11,663.8
Joint ventures 1,653.9 894.5
Other investments 17.5 16.1
Deferred tax assets 2.6 0.5
Pension assets 17.3 13.9
Non-current debtors 36.7 22.9
--------- ---------
Non-current assets 16,000.9 12,611.7
--------- ---------
Properties for sale 895.0 800.3
Current debtors 414.2 208.0
Bank balances 1,104.0 1,166.5
--------- ---------
2,413.2 2,174.8
Non-current assets classified as held
for sale (note 9) - 188.8
--------- ---------
Current assets 2,413.2 2,363.6
--------- ---------
Current creditors (659.2) (403.4)
Current borrowings (note 10) (140.9) (116.8)
Current tax liabilities (43.2) (25.8)
--------- ---------
(843.3) (546.0)
Liabilities directly associated with
non-current assets classified as held
for sale (note 9) - (3.0)
--------- ---------
Current liabilities (843.3) (549.0)
--------- ---------
Net current assets 1,569.9 1,814.6
Long-term borrowings (note 10) (3,393.9) (3,361.9)
Deferred tax liabilities (2,207.2) (1,739.6)
Non-current creditors (12.6) (21.3)
--------- ---------
11,957.1 9,303.5
--------- ---------
Total equity
Share capital 229.5 229.5
Revenue and other reserves 11,603.5 8,967.8
--------- ---------
Shareholders' funds 11,833.0 9,197.3
Minority interests 124.1 106.2
--------- ---------
11,957.1 9,303.5
--------- ---------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hongkong Land Holdings Limited
Consolidated Statement of Recognised Income and Expense
for the year ended 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------------------------------------------------------------------
Net exchange translation differences 33.1 22.3
Actuarial gains on defined benefit pension plans 2.8 3.5
Revaluation of other investments
- fair value gains 1.4 2.7
- reversal of loss on business combination - 0.6
Gains/(losses) on cash flow hedges 7.1 (24.7)
Tax on items taken directly to equity (1.3) 2.4
--------- ---------
Net income recognised directly in equity 43.1 6.8
Transfer to consolidated profit and loss
account on disposal of other investments - (3.0)
Transfer to consolidated profit and loss account
in respect of cash flow hedges 5.5 9.1
Profit for the year 2,854.9 1,907.4
--------- ---------
Total recognised income and expense for the year 2,903.5 1,920.3
--------- ---------
Attributable to:
Shareholders of the Company 2,888.2 1,913.8
Minority interests 15.3 6.5
--------- ---------
2,903.5 1,920.3
--------- ---------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hongkong Land Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------------------------------------------------------------------
Operating activities
--------- ---------
Operating profit 3,037.7 2,294.5
Depreciation 0.9 1.2
Negative goodwill on acquisition of a subsidiary - (14.1)
Increase in fair value of investment properties (2,588.9) (1,952.6)
Asset impairment provisions, reversals and disposals (9.4) 5.8
Increase in properties for sale (59.2) (262.5)
Increase in debtors, prepayments and others (197.9) (13.0)
Increase in creditors and accruals 279.9 77.1
Interest received 88.8 66.2
Interest and other financing charges paid (126.7) (121.8)
Tax paid (32.0) (12.5)
Dividends received 11.1 15.0
--------- ---------
Cash flows from operating activities 404.3 83.3
Investing activities
--------- ---------
Major renovations expenditure (22.2) (33.5)
Developments capital expenditure (23.5) (40.1)
Purchase of subsidiaries (note 13) - (237.8)
Investments in and loans to joint ventures (note 14) (316.8) (167.3)
Disposal of joint ventures and other investments 7.6 1.5
Disposal of investment and other properties 188.9 18.9
--------- ---------
Cash flows from investing activities (166.0) (458.3)
Financing activities
--------- ---------
Drawdown of bank loans 407.5 571.5
Repayment of bank loans/notes (454.0) (193.1)
Disposal of own shares held - 268.5
Dividends paid by the Company (251.1) (199.1)
Dividends paid to minority shareholders (3.6) (2.7)
--------- ---------
Cash flows from financing activities (301.2) 445.1
Effect of exchange rate changes 2.1 3.7
--------- ---------
Net (decrease)/increase in cash and cash equivalents (60.8) 73.8
Cash and cash equivalents at 1st January 1,163.7 1,089.9
--------- ---------
Cash and cash equivalents at 31st December 1,102.9 1,163.7
--------- ---------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Hongkong Land Holdings Limited
Notes
--------------------------------------------------------------------------------
1. PRINCIPAL 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 2007 which have been prepared
in conformity with International Financial Reporting Standards, including
International Accounting Standards and Interpretations adopted by the
International Accounting Standards Board.
In 2007, the Group adopted the following standard, amendment and interpretations
to existing standards which are relevant to its operations:
IFRS 7, Financial Instruments: Disclosures
Amendment to IAS 1, Capital Disclosures
IFRIC 8, Scope of IFRS 2
IFRIC 9, Reassessment of Embedded Derivatives
IFRIC 10, Interim Financial Reporting and Impairment
There have been no changes to the accounting policies as a result of adoption of
the above standard, amendment and interpretations.
2. REVENUE
2007 2006
US$m US$m
------------------
Rental income 440.5 348.7
Service income 97.7 95.4
Sales of trading properties 395.0 111.8
------- -------
933.2 555.9
------- -------
Service income includes service and management charges and hospitality service
income.
Total contingent rents included in rental income amounted to US$7.1 million
(2006: US$6.4 million).
3. COST OF SALES
2007 2006
US$m US$m
------------------
Investment properties' direct operating expenses 115.9 107.9
Cost of properties sold 326.3 89.6
------- -------
442.2 197.5
------- -------
4. SHARE OF RESULTS OF JOINT VENTURES
2007 2006
US$m US$m
------------------
By business
Commercial property 6.5 (0.9)
Residential property 17.5 0.7
------- -------
24.0 (0.2)
Increase in fair value of investment properties
------- -------
- Commercial property 352.8 46.7
- Residential property 9.0 3.1
------- -------
361.8 49.8
Asset impairment provision, reversals and disposals 0.8 1.1
------- -------
386.6 50.7
------- -------
Results are shown after tax and minority interests. The share of revenue of
joint ventures was US$128.7 million (2006: US$42.2 million).
5. TAX
2007 2006
US$m US$m
------------------
Current tax (49.8) (21.8)
Deferred tax
------- -------
- increase in fair value of investment properties (463.2) (340.2)
- other temporary differences (6.4) (3.5)
------- -------
(469.6) (343.7)
------- -------
(519.4) (365.5)
------- -------
Tax on profits is provided at the rates of taxation prevailing in the
territories in which the Group operates. The Group has no tax payable in the
United Kingdom.
6. EARNINGS PER SHARE
Basic earnings per share are calculated on profit attributable to shareholders
of US$2,839.6 million (2006: US$1,900.9 million) and on the weighted average
number of 2,295.2 million (2006: 2,228.1 million) shares in issue during the
year.
Diluted earnings per share are calculated on profit attributable to shareholders
of US$2,859.3 million (2006: US$1,920.4 million), which is after adjusting for
the effects of the conversion of convertible bonds, and on the weighted average
number of 2,399.1 million (2006: 2,332.0 million) shares in issue during the
year. The number of shares for basic and diluted earnings per share is
reconciled as follows:
Ordinary shares in millions
2007 2006
---------------------------
Weighted average number of shares in issue 2,295.2 2,228.1
Adjustment for shares to be issued on conversion
of convertible bonds 103.9 103.9
--------- ---------
Weighted average number of shares for diluted
earnings per share calculation 2,399.1 2,332.0
--------- ---------
Earnings per share are additionally calculated based on underlying profit
attributable to shareholders. The difference between underlying profit
attributable to shareholders and profit attributable to shareholders is
reconciled as follows:
2007 2006
US$m US$m
-----------------------
Underlying profit attributable to shareholders 344.7 244.7
Non-trading items (note 7) 2,494.9 1,656.2
--------- ---------
Profit attributable to shareholders 2,839.6 1,900.9
Interest expense on convertible bonds (net of tax) 19.7 19.5
--------- ---------
Profit for calculation of diluted earnings per share 2,859.3 1,920.4
--------- ---------
7. NON-TRADING ITEMS
2007 2006
US$m US$m
----------------------
Revaluation surpluses of investment properties 2,588.9 1,952.6
Deferred tax charges on revaluation
surpluses of investment properties (463.2) (340.2)
Share of revaluation surpluses of investment
properties of joint ventures (net of deferred tax) 361.8 49.8
Asset impairment provisions, reversals and disposals 9.4 (5.8)
Share of asset disposals of joint ventures 0.8 1.1
Minority interests (2.8) (1.3)
--------- ---------
2,494.9 1,656.2
--------- ---------
8. TANGIBLE ASSETS
2007 2006
US$m US$m
-----------------------
Net book value at 1st January 11,663.8 9,791.0
Exchange rate adjustments (4.1) (0.5)
New subsidiary - 25.9
Additions 38.3 85.2
Depreciation (0.9) (1.2)
Disposal (13.1) (0.3)
Net revaluation surplus of investment properties 2,588.9 1,952.6
Classified as non-current assets held for sale - (187.8)
Transfer to properties for sale - (1.1)
--------- ---------
Net book value at 31st December 14,272.9 11,663.8
--------- ---------
9. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
The non-current assets classified as held for sale at 31st December 2006 were
related to the Group's investment property situated at 1063 King's Road, Hong
Kong. The sale was completed on 9th February 2007.
10.BORROWINGS
2007 2006
US$m US$m
-----------------------
Current
--------- ---------
Bank overdrafts 1.1 2.8
Short-term borrowings 94.7 103.2
Current portion of long-term borrowings 45.1 10.8
--------- ---------
140.9 116.8
Long-term borrowings
--------- ---------
Bank loans 1,442.2 1,467.7
7% United States Dollar bonds due 2011 618.3 617.2
5.5% United States Dollar bonds due 2014 501.4 487.5
3.01% Singapore Dollar notes due 2010 224.2 206.7
3.65% Singapore Dollar notes due 2015 258.5 242.2
2.75% United States Dollar convertible bonds due 2012 349.3 340.6
--------- ---------
3,393.9 3,361.9
--------- ---------
3,534.8 3,478.7
--------- ---------
Secured 182.8 242.1
Unsecured 3,352.0 3,236.6
--------- ---------
3,534.8 3,478.7
--------- ---------
11. NET ASSET VALUE PER SHARE
Net asset value per share is calculated on shareholders' funds of US$11,833.0
million (2006: US$9,197.3 million)and on 2,295.2 million (2006: 2,295.2 million)
shares in issue at the year end.
Net asset value per share is additionally calculated based on adjusted
shareholders' funds. The difference between adjusted shareholders' funds and
shareholders' funds is reconciled as follows:
2007 2006
US$m US$m
-----------------------
Shareholders' funds 11,833.0 9,197.3
Deferred tax on revaluation surpluses of
investment properties 2,165.4 1,708.1
Share of deferred tax on revaluation surpluses of
investment properties of joint ventures 42.6 16.7
--------- ---------
Adjusted shareholders' funds 14,041.0 10,922.1
--------- ---------
12. DIVIDENDS
2007 2006
US$m US$m
-----------------------
Final dividend in respect of 2006 of USc7.00
(2005: USc6.00) per share 160.7 133.5
Interim dividend in respect of 2007 of USc4.00
(2006: USc3.00) per share 91.8 66.8
--------- ---------
252.5 200.3
--------- ---------
A final dividend in respect of 2007 of USc9.00 (2006: USc7.00) per share
amounting to a total of US$206.6 million (2006: US$160.7 million) is proposed by
the Board. The dividend proposed will not be 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 2008.
13. PURCHASE OF SUBSIDIARIES
Purchase of subsidiaries in 2006 was related to the Group's acquisition of 77.4%
interest in MCL Land.
14. INVESTMENTS IN AND LOANS TO JOINT VENTURES
Investments in joint ventures during the year included US$22.1 million and
US$22.0 million acquisition for 40% interest in Ampang Investments and 50%
interest in K.K. Halifax respectively.
15. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
2007 2006
US$m US$m
--------------------
Capital commitments 463.0 64.6
------- -------
Contribution to joint ventures 953.5 1,060.3
------- -------
Various Group companies are involved in litigation arising in the ordinary
course of their respective businesses. Having reviewed outstanding claims and
taking into account legal advice received, the Directors are of the opinion that
adequate provisions have been made in the financial statements.
--------------------------------------------------------------------------------
The final dividend of USc9.00 per share will be payable on 14th May 2008,
subject to approval at the Annual General Meeting to be held on 7th May 2008, to
shareholders on the register of members at the close of business on 20th March
2008. The ex-dividend date will be on 18th March 2008, and the share registers
will be closed from 24th to 28th March 2008, 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 2007 final
dividend by notifying the United Kingdom transfer agent in writing by 25th April
2008. The Sterling equivalent of dividends declared in United States Dollars
will be calculated by reference to a rate prevailing on 30th April 2008.
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
Y K Pang (852) 2842 8428
G M Brown (852) 2842 8138
Matheson & Co., Limited
Philip Hawkins (020) 7816 8136
GolinHarris
Sue So (852) 2501 7984
Weber Shandwick Financial
Richard Hews/ Hannah Marwood (020) 7067 0700
Full text of the Preliminary Announcement of Results and the Preliminary Financial
Statements for the year ended 31st December 2007 can be accessed through the Internet
at 'www.hkland.com'.
This information is provided by RNS
The company news service from the London Stock Exchange
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