Half-year Results

Hongkong Land Hldgs Ltd
28 July 2023
 

Announcement

 

28th July 2023

 

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

 

HONGKONG LAND HOLDINGS LIMITED

HALF-YEAR RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2023

 

Highlights

•  Underlying profit in line with first half of 2022

•  Higher profits from Investment Properties

•  Development Properties profits lower due to fewer planned completions

 

"The Group's financial performance was stable in the first half of 2023, although trading conditions are likely to remain challenging in a number of key markets for the remainder of the year.  Full-year underlying profits are expected to improve somewhat compared to 2022, driven by the timing of Development Properties project completions.  Modestly higher contributions from Investment Properties are also anticipated, as improved retail trading performance is expected to offset negative rental reversions in Hong Kong.  The Group's balance sheet remains strong."

 

 

Ben Keswick

Chairman

 

 

Results

(unaudited)

Six months ended 30th June



2023

US$m

2022

US$m

Change

%

  Underlying profit attributable to shareholders#

422

425

-1

  (Loss)/profit attributable to shareholders

(333)

292

n/m

  Shareholders' funds

32,133

33,303*

 -4

  Net debt

5,545

5,817*

-5


US¢

US¢

%

  Underlying earnings per share#

19.02

18.67

+2

  (Loss)/earnings per share

(15.00)

12.83

n/m

  Interim dividend per share

6.00

6.00

-


US$

US$

%

  Net asset value per share

14.51

14.95*

-3

# 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 7 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 2022.

The interim dividend of US¢6.00 per share will be payable on 11th October 2023 to shareholders on the register of members at the close of business on 18th August 2023.

 

 

HONGKONG LAND HOLDINGS LIMITED

HALF-YEAR RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2023

 

OVERVIEW

The Group's results from Investment Properties remained resilient in the first half of the year, with improved performance by the luxury retail portfolio more than offsetting a lower contribution from the Hong Kong office portfolio.  In Development Properties, the Group recognised profit in the period from the acquisition of additional stakes in two existing projects in China at valuation below cost; nevertheless, profit contributions were lower than the first half of 2022, reflecting substantially lower planned sales completions.

 

PERFORMANCE

Underlying profit attributable to shareholders was US$422 million, in line with the prior year, while underlying earnings per share were US$19.02, a 2% increase compared to the prior year. 

 

There was a loss attributable to shareholders of US$333 million in the first half of 2023, compared to a profit of US$292 million in the first half of 2022.  This figure reflected unrealised losses mainly arising from Investment Properties revaluations of US$755 million and US$133 million in the first half of 2023 and 2022, respectively.  The 2023 revaluation loss is principally attributable to the Hong Kong office portfolio following a modest decrease in market rents and a slight cap rate expansion.

 

The net asset value per share at 30th June 2023 was US$14.51, compared with US$14.95 at the end of 2022.

 

The Directors are recommending an interim dividend of US¢6.00 per share, unchanged from the prior year.

 

GROUP REVIEW

Investment Properties

In Hong Kong, the Group's Central office portfolio delivered a solid performance amidst challenging market conditions due to uncertainty in the global financial markets.  Physical and committed vacancy was 6.9% and 6.2% respectively at the end of June 2023, an increase from 4.9% and 4.7% at the end of 2022, although significantly lower than the average vacancy in the Central market.  Negative rental reversions resulted in average office rents decreasing to HK$107 per sq. ft., compared to HK$112 per sq. ft. and HK$111 per sq. ft. in the first and second halves of 2022, respectively.

 

The Group's LANDMARK retail portfolio delivered an improved performance during the first half of 2023, following several challenging years for the retail market in Hong Kong.  An increase in tenant sales and the removal of temporary rent relief led to an increase in average retail rent to HK$204 per sq. ft., compared with HK$168 per sq. ft. and HK$181 per sq. ft. in the first and second halves of 2022, respectively.  The LANDMARK retail portfolio remains effectively fully let.

 

Contributions from the Group's CENTRAL series luxury retail malls in Beijing and Macau increased in the period, due to higher average rents as tenant sales experienced a strong recovery.

 

In Singapore, market conditions remained healthy, with vacancy across the Group's office portfolio of 2.1% at the end of June 2023, compared with 7.5% at the end of 2022.  On a committed basis, vacancy was 1.0%.  Rental reversions were positive, with average rents increasing to S$10.9 per sq. ft, compared to S$10.5 per sq. ft. and S$10.6 per sq. ft. in the first and second halves of 2022, respectively.

 

Development Properties

On the Chinese mainland, the profit contribution from sales completions in the Development Properties business was significantly lower compared to the first half of 2022 due to a lower number of planned sales completions.

 

The pace of recovery in the Chinese residential market was mixed in the first half of 2023, with sales performance varying between cities and individual developments.  The Group's focus on premium residential products in a select number of top-tier cities has resulted in a better sales performance than the general market.  The weak economic outlook in China, however, weighed on consumer sentiment despite the introduction of policy support measures.  The Group's attributable interest in contracted sales was US$745 million, compared to US$419 million and US$881 million in the first and second halves of 2022, respectively.  At 30th June 2023, the Group had US$2,274 million in sold but unrecognised contracted sales, compared with US$2,087 million at the end of 2022.  

 

During the period, the Group completed the acquisition of equity stakes in two existing projects in Nanjing and Wuhan from joint-venture partners.  These were acquired in both cases for consideration below development cost, resulting in immediate net fair-value pre-tax accounting gains of US$72 million.  The projects are mixed-use in nature, with residential and commercial components.

 

In Singapore, where the Group recognises profits on the percentage of completion basis, the profit contribution in the period was broadly unchanged compared to the same period in 2022.  Market conditions remained healthy, with strong sales at the recently launched 638-unit Tembusu Grand project, which was 55% sold at the end of June 2023.  The Group's attributable interest in contracted sales was US$487 million, compared to US$270 million and US$345 million in the first and second halves of 2022, respectively. 

 

In the rest of Southeast Asia, total contributions were lower due to the timing of planned sales completions.

 

Financing

Net debt at 30th June 2023 was US$5.5 billion, down from US$5.8 billion at the end of 2022, primarily due to net cash inflows from trading activities.  Net gearing was 17%, unchanged from the end of last year. 

 

As at 30th June 2023, the Group had undrawn committed facilities of US$3.3 billion, compared to US$3.1 billion at the end of 2022, with an average debt tenor of 5.7 years, compared to 5.8 years at the end of 2022.  54% of the Group's interest rate on debt is at fixed rates, with an average hedge tenor of 6.5 years.  The Group issued a US$400 million 10-year public bond on 14th July 2023 to refinance a US$400 million bond maturing in early 2024.  This new bond extended the Group's average debt and hedge tenors to 5.9 and 6.9 years, respectively.

 

Share Buyback

Since the Group's announcements of its US$1 billion share buyback programme in September 2021 and July 2022, it has invested US$599 million.  Following the cancellation of these purchased shares, the total issued share capital has reduced by 5.1%.

 

OUTLOOK

The Group's financial performance was stable in the first half of 2023, although trading conditions are likely to remain challenging in a number of key markets for the remainder of the year.  Full-year underlying profits are expected to improve somewhat compared to 2022, driven by the timing of Development Properties project completions.  Modestly higher contributions from Investment Properties are also anticipated, as improved retail trading performance is expected to offset negative rental reversions in Hong Kong.  The Group's balance sheet remains strong.

 

 

Ben Keswick

Chairman

 



 

Hongkong Land Holdings Limited

Consolidated Profit and Loss Account

for the six months ended 30th June 2023

 




(unaudited)






Six months ended 30th June


Year ended 31st December




 

2023


2022


2022




 

 








 

 








 

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)

 

670.3

 

 

 

-

 

 

 

670.3




894.0




-




894.0




2,244.4




-




2,244.4



Net operating costs
(note 3)

 

(277.6)

 

 

 

-

 

 

 

(277.6)




(499.9)




-




(499.9)




(1,398.4)




-




(1,398.4)



Change in fair value of investment properties

 

-

 

 

 

(742.6)

 

 

 

(742.6)




-




(120.5)




(120.5)




-




(559.3)




(559.3)








































Operating (loss)/profit (note 4)

 

392.7

 

 

 

(742.6)

 

 

 

(349.9)




394.1




(120.5)




273.6




846.0




(559.3)




286.7



Net financing charges

 

 

 

 

 

 

 

 

 

 
































































-  financing charges

 

(123.7)

 

 

 

-

 

 

 

(123.7)




(114.4)




-




(114.4)




(234.9)




-




(234.9)



-  financing income

 

40.1

 

 

 

-

 

 

 

40.1

 

 


24.9




-




24.9




66.8




-




66.8














































































 

(83.6)

 

 

 

-

 

 

 

(83.6)




(89.5)




-




(89.5)




(168.1)




-




(168.1)



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

 

164.3

 

 

 

(8.6)

 

 

 

155.7




175.5




(21.4)




154.1




229.3




(24.5)




204.8








































(Loss)/profit before tax

 

473.4

 

 

 

(751.2)

 

 

 

(277.8)




480.1




(141.9)




338.2




907.2




(583.8)




323.4



Tax (note 6)

 

(49.8)

 

 

 

(2.7)

 

 

 

(52.5)




(55.8)




6.8




(49.0)




(131.7)




7.9




(123.8)








































(Loss)/profit after tax

 

423.6

 

 

 

(753.9)

 

 

 

(330.3)




424.3




(135.1)




289.2




775.5




(575.9)




199.6








































Attributable to:

 

 

 

 

 

 

 

 

 

 



























Shareholders of the Company (note 7)

 

422.2

 

 

 

(755.2)

 

 

 

(333.0)




424.6




(132.8)




291.8




776.1




(573.4)




202.7



Non-controlling interests

 

1.4

 

 

 

1.3

 

 

 

2.7




(0.3)




(2.3)




(2.6)




(0.6)




(2.5)




(3.1)









































 

423.6

 

 

 

(753.9)

 

 

 

(330.3)




424.3




(135.1)




289.2




775.5




(575.9)




199.6














































































 

US¢

 

 

 

 

 

 

 

US¢




US¢








US¢




US¢








US¢




 

 

 

 

 

 

 

 

 

 




























 

 

 

 

 

 

 

 

 

 



























(Loss)/earnings per share (note 8)

 

19.02

 

 

 

 

 

 

 

(15.00)




18.67








12.83




34.44








8.99




 

 

 

 

 

 

 

 

 

 



























 


Hongkong Land Holdings Limited

Consolidated Statement of Comprehensive Income

for the six months ended 30th June 2023


 


 

 

 

 

(unaudited)

Six months ended

30th June





Year ended

31st

December

 

 

 


 

 

 

 

2023

US$m








2022

US$m








2022

US$m

 

 

 

 

 

 

 

 

 

 

















 

 

 


 

 

 

 

 

















 

 

 

(Loss)/profit for the period

 

 

 

 

(330.3)








289.2








199.6

 

 

 

Other comprehensive income/(expense)

 

 

 

 

 

















 

 

 


 

 

 

 

 

















 

 

 

Items that will not be reclassified to

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

profit or loss:

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 


 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

Remeasurements of defined benefit

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

plans

 

 

 

 

-








-

 

 

 

 

 

 

 

(1.6)

 

 

 

Tax on items that will not be reclassified

 

 

 

 

-








-

 

 

 

 

 

 

 

0.3

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

-








-

 

 

 

 

 

 

 

(1.3)

 

 

 

Items that may be reclassified

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

subsequently to profit or loss:

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 


 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

Net exchange translation differences

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

- net loss arising during the period

 

 

 

 

(209.2)








(259.6)

 

 

 

 

 

 

 

(116.8)

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 

Cash flow hedges

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 


 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

- net (loss)/gain arising during the period

 

 

 

 

(16.4)








20.4

 

 

 

 

 

 

 

2.4

 

 

 

- transfer to profit and loss

 

 

 

 

(1.4)








(2.5)

 

 

 

 

 

 

 

(2.4)

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

(17.8)








17.9

 

 

 

 

 

 

 

-

 

 

 

Tax relating to items that may be

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

reclassified

 

 

 

 

2.9








(3.0)

 

 

 

 

 

 

 

-

 

 

 

Share of other comprehensive expense

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

of associates and joint ventures

 

 

 

 

(204.7)








(373.5)

 

 

 

 

 

 

 

(523.6)

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

(428.8)








(618.2)

 

 

 

 

 

 

 

(640.4)

 

 

 


 

 

 

 

 









 

 

 

 

 

 

 


 

 

 


 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

Other comprehensive expense for the

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

period, net of tax

 

 

 

 

(428.8)








(618.2)

 

 

 

 

 

 

 

(641.7)

 

 

 






 




















Total comprehensive expense for the

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

period

 

 

 

 

(759.1)








(329.0)

 

 

 

 

 

 

 

(442.1)

 

 

 


 

 

 

 

 








 

 

 

 

 

 

 

 


 

 

 

Attributable to:

 

 

 

 

 









 

 

 

 

 

 

 


 

 

 

Shareholders of the Company

 

 

 

 

(759.1)








(322.7)

 

 

 

 

 

 

 

(431.9)

 

 

 

Non-controlling interests

 

 

 

 

-








(6.3)

 

 

 

 

 

 

 

(10.2)

 

 

 






 





















 

 

 

 

(759.1)








(329.0)

 

 

 

 

 

 

 

(442.1)

 

 

 


 

 

 

 










 

 

 

 

 

 

 


 

 

 

 

 

 

 

 


 

Hongkong Land Holdings Limited

Consolidated Balance Sheet

at 30th June 2023

 


 


 




(unaudited)

At 30th June



At 31st

December


 




2023

US$m




2022

US$m




2022

US$m


 


 


 

Net operating assets



 

 















Fixed assets



 

104.1






118.6






111.8



Right-of-use assets



 

13.7






14.9






13.0



Investment properties (note 10)



 

27,167.4






28,278.1






28,054.1



Associates and joint ventures (note 11)



 

8,943.5






9,574.0






9,616.0



Non-current debtors



 

13.2






34.6






16.8



Deferred tax assets



 

107.4






60.1






98.2



Pension assets



 

0.9






1.2






0.9






 

 















Non-current assets



 

36,350.2






38,081.5






37,910.8






 

 


















 

 















Properties for sale



 

3,085.1






3,161.1






2,910.7



Current debtors



 

531.2






862.0






539.4



Current tax assets



 

58.5






41.4






62.5



Bank balances



 

1,143.4






746.7






1,173.4






 

 















Current assets



 

4,818.2






4,811.2






4,686.0






 

 


















 

 















Current creditors



 

(1,779.3)






(1,982.7)





(1,667.0)



Current borrowings (note 12)



 

(858.5)






(366.6)





(419.1)



Current tax liabilities



 

(238.2)






(208.9)





(328.9)






 

 


















 

 















Current liabilities



 

(2,876.0)






(2,558.2)






(2,415.0)






 

 


















 

 















Net current assets



 

1,942.2






2,253.0






2,271.0



Long-term borrowings (note 12)



 

(5,829.6)






(6,441.6)






(6,571.4)



Deferred tax liabilities



 

(278.7)






(228.4)






(257.1)



Pension liabilities



 

(2.2)






(0.1)






(1.8)



Non-current creditors



 

(25.4)






(17.0)






(24.4)






 

 


















 

32,156.5






33,647.4






33,327.1



 



 

 















Total equity



 

 















Share capital



 

221.5






224.3






222.7



Revenue and other reserves



 

31,911.9






33,395.0






33,080.7






 

 















Shareholders' funds



 

32,133.4






33,619.3






33,303.4



Non-controlling interests



 

23.1






28.1






23.7






 

 


















 

32,156.5






33,647.4






33,327.1






 

 















 



















 


Hongkong Land Holdings Limited

Consolidated Statement of Changes in Equity

for the six months ended 30th June 2023





Share

capital

US$m


Share

premium

US$m


Revenue

reserves

US$m


Hedging

reserves

US$m


Exchange

reserves

US$m


Attributable to

shareholders of the Company US$m


Attributable to non-controlling interests

US$m


Total equity US$m



































Six months ended 30th June 2023 (unaudited)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1st January 2023


222.7

 

-

 

33,449.8

 

(3.0)

 

(366.1)

 

33,303.4

 

23.7

 

33,327.1

Total comprehensive expense


-

 

-

 

(333.0)

 

(16.9)

 

(409.2)

 

(759.1)

 

-

 

(759.1)

Dividends paid by the Company (note 9)


-

 

-

 

(355.9)

 

-

 

-

 

(355.9)

 

-

 

(355.9)

Dividends paid to non-controlling shareholders


-

 

-

 

-

 

-

 

-

 

-

 

(0.6)

 

(0.6)

Repurchase of shares


(1.2)

 

-

 

(53.8)

 

-

 

-

 

(55.0)

 

-

 

(55.0)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30th June 2023

 

221.5

 

-

 

32,707.1

 

(19.9)

 

(775.3)

 

32,133.4

 

23.1

 

32,156.5


















Six months ended 30th June 2022 (unaudited)

















At 1st January 2022


229.8


67.4


34,022.4


(20.2)


284.4


34,583.8


34.4


34,618.2

Total comprehensive (expense)/income


-


-


291.8


23.9


(638.4)


(322.7)


(6.3)


(329.0)

Dividends paid by the Company (note 9)


-


-


(364.5)


-


-


(364.5)


-


(364.5)

Repurchase of shares


(5.5)


(67.4)


(204.4)


-


-


(277.3)


-


(277.3)


















At 30th June 2022


224.3


-


33,745.3


3.7


(354.0)


33,619.3


28.1


33,647.4


















Year ended 31st December 2022

















At 1st January 2022


229.8


67.4


34,022.4


(20.2)


284.4


34,583.8


34.4


34,618.2

Total comprehensive (expense)/income


-


-


201.4


17.2


(650.5)


(431.9)


(10.2)


(442.1)

Dividends paid by the Company


-


-


(498.8)


-


-


(498.8)


-


(498.8)

Dividends paid to non-controlling shareholders


-


-


-


-


-


-


(0.5)


(0.5)

Unclaimed dividends forfeited


-


-


1.0


-


-


1.0


-


1.0

Repurchase of shares


(7.1)


(67.4)


(276.2)


-


-


(350.7)


-


(350.7)


















At 31st December 2022

 

222.7


-


33,449.8


(3.0)


(366.1)


33,303.4


23.7


33,327.1


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Hongkong Land Holdings Limited

Consolidated Cash Flow Statement

for the six months ended 30th June 2023






(unaudited)

Six months ended

30th June



Year ended 31st December





2023

US$m




2022

US$m




2022

US$m

 

 



Operating activities

 


 













 













 










Operating (loss)/profit



(349.9)




273.6




286.7


Depreciation and amortisation



8.4




8.9




17.5


Change in fair value of investment properties


742.6




120.5




559.3


Loss on disposal of fixed assets


-




-




2.8


Gain on acquisition of subsidiaries


(31.6)




-




(1.3)


(Increase)/decrease in properties for sale


(41.6)




(358.8)




88.9


(Increase)/decrease in debtors


(9.2)




157.0




487.4


Increase/(decrease) in creditors


123.9




(143.3)




(498.0)


Interest received


22.4




13.3




45.6


Interest and other financing charges paid


(124.0)




(105.0)




(228.2)


Tax paid


(127.2)




(42.9)




(124.7)


Dividends from associates and joint ventures


58.9




42.1




222.3





 













 










Cash flows from operating activities



272.7




(34.6)




858.3





 










Investing activities

 


 













 













 










Major renovations expenditure



(48.1)




(41.5)




(94.6)


Repayments from/(investments in and



 










advances to) associates and joint ventures



482.7




(310.6)




(617.6)


Acquisition of subsidiaries



(30.9)




-




(14.5)





 













 










Cash flows from investing activities


 

403.7




(352.1)




(726.7)





 










Financing activities

 


 













 













 










Drawdown of borrowings



836.6




1,087.7




2,399.6


Repayment of borrowings


 

(1,106.6)

 



(753.3)




(1,954.7)


Principal elements of lease payments


 

(1.5)

 



(1.9)




(4.1)


Repurchase of shares


 

(55.0)

 



(278.9)




(352.3)


Dividends paid by the Company


 

(353.6)




(370.6)




(503.7)


Dividends paid to non-controlling shareholders


(0.6)




-

 



(0.5)

 




 













 










Cash flows from financing activities



(680.7)




(317.0)




(415.7)





 










Net cash outflow



(4.3)




(703.7)




(284.1)


Cash and cash equivalents at beginning of period

1,171.5




1,476.1


 


1,476.1


Effect of exchange rate changes



(26.4)




(30.2)




(20.5)





 










Cash and cash equivalents at end of period



1,140.8




742.2




1,171.5


 

 


 










 

 


 










 

 

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' and on a going concern basis.  The condensed financial statements have not been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.

 

There are no changes to the accounting policies as described in the 2022 annual financial statements.  Amendments that were effective from 1st January 2023 and relevant to the Group's operations are set out below:

 

Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective from 1st January 2023)

 

The amendment requires deferred tax to be recognised on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They typically apply to transactions such as leases of lessees and decommissioning obligations and require the recognition of additional deferred tax assets and liabilities.

 

Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules (effective for annual reporting period commencing on or after 1st January 2023)

 

The amendment provides a temporary mandatory exception from deferred tax accounting in respect of Pillar Two income taxes and certain additional disclosure requirements.  The Group is in the process of assessing the estimated impact of Pillar Two income taxes to its consolidated financial statements and appropriate disclosures will be made in the financial statements for the year ending 31st December 2023.

 

The Group has not early adopted any amendments that have been issued but not yet effective.

 

2.   REVENUE

 


Six months ended 30th June






2023

US$m




2022

US$m






 










 







Rental income



463.9




455.6



Service income



103.2




92.2



Sales of properties



 










 







- recognised at a point in time



94.4




235.4



- recognised over time



8.8




110.8






 










103.2




346.2






 










670.3




894.0



By business

 


 







Investment Properties



538.4




521.4



Development Properties



131.9




372.6






 










670.3




894.0


 

3.   NET OPERATING COSTS

 


Six months ended 30th June






2023

US$m




2022

US$m






 










 







Cost of sales



(218.3)




(402.8)



Other income



21.1




9.8



Gain on acquisition of subsidiaries



31.6




-



Administrative expenses



(112.0)




(106.9)






 









 

(277.6)

 



(499.9)


 

4.  OPERATING (LOSS)/PROFIT

 


Six months ended 30th June






2023

US$m




2022

US$m






 







By business

 


 







Investment Properties



422.1




412.8



Development Properties



18.3




25.9



Corporate



(47.7)




(44.6)






 







Underlying business performance



392.7




394.1



Change in fair value of investment properties



(742.6)




(120.5)
















(349.9)




273.6


 

5.   SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES

 


Six months ended 30th June






2023

US$m




2022

US$m






 







By business

 


 







Investment Properties



 










 







- operating profit



75.4




68.5



- net financing charges



(25.1)




(17.6)



- tax



(8.3)




(8.7)






 










 







- net profit



42.0




42.2






 







Development Properties



 










 







- operating profit



161.2




196.8



- net financing charges



(15.8)




(4.6)



- tax



(23.1)

 



(57.8)



- non-controlling interests



-




(1.1)






 










 







- net profit



122.3




133.3






 







Underlying business performance



164.3




175.5



Change in fair value of investment properties










(net of deferred tax)



(8.6)




(21.4)






 










155.7




154.1


 

6.   TAX

 


Six months ended 30th June






2023

US$m




2022

US$m






 










 







Tax charged to profit and loss is analysed as follows:


 










 







Current tax



(47.8)




(40.5)



Deferred tax



 







- changes in fair value of investment properties



(2.7)




6.8



- other temporary differences



(2.0)




(15.3)






 










(52.5)




(49.0)






 







Tax relating to components of other comprehensive income or expense is analysed as follows:



 










 







Cash flow hedges



2.9




(3.0)


 

Tax on profits has been calculated at the rates of taxation prevailing in the territories in which the Group operates.

 

The Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilities relating to Pillar Two income tax.

 

Share of tax charge of associates and joint ventures of US$30.5 million (2022: US$65.2 million) is included in share of results of associates and joint ventures.

 

7.   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 and investment properties; 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 after interest, tax and non-controlling interests is set out below:

 


Six months ended 30th June



2023

US$m


2022

US$m




 






 




Change in fair value of investment properties


(742.6)


(120.5)


Deferred tax on change in fair value of investment properties


(2.7)


6.8


Share of change in fair value of investment properties of


 




associates and joint ventures (net of deferred tax)


(8.6)


(21.4)


Non-controlling interests


(1.3)


2.3




 





(755.2)


(132.8)

 

8.   (LOSS)/EARNINGS PER SHARE

 

Loss per share are calculated on loss attributable to shareholders of US$333.0 million (2022: profit of US$291.8 million) and on the weighted average number of 2,220.2 million (2022: 2,274.0 million) shares in issue during the period.

 

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



 

2023


2022










 

US$m

Earnings

per share

US¢


US$m


Earnings

per share

US¢


 



 

 

 

 






Underlying profit attributable to

 

 

 

 






shareholders

 

422.2

 

19.02


424.6


18.67


Non-trading items (note 7)

 

(755.2)

 

 


(132.8)





 

 

 

 






(Loss)/profit attributable to shareholders

 

(333.0)

 

(15.00)


291.8


12.83

 

9.   DIVIDENDS

 


Six months ended 30th June




2023

US$m


2022

US$m




 






 




Final dividend in respect of 2022 of US¢16.00
(2021: US¢16.00) per share       


355.9


364.5

 

An interim dividend in respect of 2023 of US¢6.00 (2022: US¢6.00) per share amounting to a total of US$132.9 million (2022: US$134.3 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2023.

 

10. INVESTMENT PROPERTIES

 


Six months ended 30th June

Year ended

31st

December




2023

US$m


2022

US$m


2022

US$m




 








 






At beginning of period


28,054.1


28,600.2


28,600.2


Exchange differences


(179.2)


(232.7)


(77.3)


Additions


35.1


31.1


95.4


Transfer to fixed assets


-


-


(4.9)


Decrease in fair value


(742.6)


(120.5)


(559.3)




 






At end of period


27,167.4


28,278.1


28,054.1

 

11. ASSOCIATES AND JOINT VENTURES

 


At 30th June

 At 31st

December




2023

US$m


2022

US$m


2022

US$m




 








 






By business


 






Investment Properties


4,480.1


4,870.3


4,960.4


Development Properties


4,463.4


4,703.7


4,655.6




 








8,943.5


9,574.0


9,616.0

 

12. BORROWINGS

 



At 30th June


At 31st December






2023

US$m




2022

US$m




2022

US$m






 














 











Current



 














 














 











Bank overdrafts



2.6




4.5




1.9



Bank loans



61.5




117.8




87.4



Current portion of long-term borrowings



 











- bank loans



219.1




179.9




150.4



- medium term notes



575.3




64.4




179.4






 














 











 



858.5




366.6




419.1



 



 











Long-term



 














 














 











Bank loans



2,586.6




2,630.5




2,924.9



Medium term notes



 














 











- due 2023



-




178.2




-



- due 2024



-




397.8




394.9



- due 2025



641.9




643.5




642.9



- due 2026



38.4




38.3




38.6



- due 2027



185.3




184.9




186.2



- due 2028



181.8




181.4




182.7



- due 2029



120.8




120.5




121.3



- due 2030



698.0




697.3




698.3



- due 2031



569.0




568.4




569.2



- due 2032



139.5




139.2




140.2



- due 2033



88.7




88.6




89.2



- due 2034



76.7




76.6




77.1



- due 2035



252.6




252.1




253.8



- due 2038



108.8




105.8




109.6



- due 2039



109.7




106.8




110.6



- due 2040



31.8




31.7




31.9






 














 














3,243.0




3,811.1




3,646.5