MCL Land Interim Results

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Hongkong Land Holding Ltd. (Sing.Reg) (HKLD)

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Hongkong Land Limited
Y K Pang	(852) 2842 8428
G M Brown	(852) 2842 8138
	(852) 9612 3496
GolinHarris
Sue So	(852) 2501 7984


31st July 2008

MCL LAND LIMITED
FIRST HALF 2008 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights
Profit recognised on completion of The Grange in the first quarter Acquisitions of sites at Nim Park and Yishun Avenue 1 completed in the first half, and Casa Nassau in July 2008

'The current uncertain economic conditions have led to a slowdown in the residential property market in Singapore. Medium to longer-term prospects however, remain positive. The completions of Mera Springs and The Esta in Singapore in the second half of the year should benefit MCL Land's overall performance in 2008.'

Y K Pang, Chairman
31st July 2008

Group Results

	Six months ended 30th June
	2008	2007	Change	2008	Change
	US$m	US$m	%	S$m	%
Revenue	0.7	133.9	- 99	1.0	- 100
Profit before tax	8.2	2.9	180	11.3	151
Underlying profit attributable to shareholders *	8.2	2.4	242	11.3	205
Profit attributable to shareholders	8.2	3.2	157	11.3	131
	US¢	US¢		S¢
Underlying earnings per share	2.22	0.65	242	3.04	207
Earnings per share	2.22	0.86	158	3.04	130
	At 30.6.2008	At 31.12.2007	Change	At 30.6.2008	Change
	US$m	US$m	%	S$m	%
Shareholders' funds	536.0	524.2	2	730.1	-4
	US$	US$		S$
Net asset value per share	1.45	1.42	2	1.97	-4


The exchange rate of US$1=S$1.36 (31.12.2007: US$1=S$1.44) was used for translating assets and liabilities at the balance sheet date and average monthly transaction rates of US$1=S$1.38 (2007: US$1=S$1.53) was used for translating the results for the financial period.

The financial results for the six months ended 30th June 2008 and 30th June 2007 have been prepared based on the International Financial Reporting Standards ('IFRS'). These financial results have not been audited or reviewed by the Auditors.

* The basis for calculating underlying profit and earnings is set out in Note 4 of this report.

CHAIRMAN'S STATEMENT


Overview

Inflationary pressures and difficulties in the international finance sector are affecting sentiment in the residential property market in Singapore. Sales activity has fallen as property launches are deferred and buyers remain cautious. Some 1,525 new residential units were sold in the second quarter of 2008, double the number sold in the first quarter, but the total of 2,287 units sold in the first half of 2008 is well down from the 9,912 units sold in the same period last year. Prices of residential properties rose marginally by 0.2% in the second quarter, bringing to 3.9% the growth for the first six months of 2008 compared with an increase of 13.5% in the first half of 2007.

Group Performance
The Group recorded revenue of US$0.7 million in the first half of 2008, being primarily rental income from investment properties. This compares with revenue of US$133.9 million for the same period in 2007 mainly in relation to the completion of The Metz. The Group's underlying profit for first half of 2008 was US$8.2 million, which is mainly attributable to the completion in March of The Grange, the Group's joint venture project in Singapore, a write-back of provision of US$2.7 million and the sales of the remaining twelve shops at the Kuala Lumpur Suburban Centre ('KLSC'), the Group's joint venture project in Malaysia. The underlying profit for the first half of 2007 was US$2.4 million, which included a gain of US$3.7 million arising from the completion of KLSC and the write-back of provision of US$0.8 million.
The Group's profit attributable to shareholders for the first half of 2008 was also US$8.2 million, compared with US$3.2 million in the first half of 2007, which included a US$0.8 million fair value gain of an investment property.
Shareholders' funds were US$536 million at the end of June 2008, 2% higher than the US$524 million at 31st December 2007 following the payment of a one-tier first and final dividend. The Group's net debt at 30th June was US$343 million, having increased from US$244 million at the prior year end after the payment of US$154.7 million for the purchase of Yishun Avenue 1 partially offset by the receipt of progress billings of US$52.8 million from development projects. Net gearing was 64% at 30th June 2008, compared with 47% at the end of 2007.
Dividend

The Board is not recommending the payment of an interim dividend for the first half of 2008 (2007: nil).
Properties

Construction work on the Group's development projects is progressing well. The Grange obtained its Temporary Occupation Permit in March 2008. Mera Springs and The Esta are expected to complete in the third and fourth quarters of 2008 respectively.
No new development projects were launched in Singapore during the period under review. All projects previously launched are fully pre-sold, with the exception of two units at Hillcrest Villa.

The Group's joint ventures in Malaysia made good progress in the sales of their developments. The 300 shop units at Kuala Lumpur Suburban Centre are now fully sold. The launch of the 391-unit condominium development, Riana Green Phase 1, received a good response with over 74% of the units sold. Progress continued with the sales at the joint venture development in Seremban with 116 of the 270 terrace houses, bungalows, bungalow lots and shop offices sold by the end of June 2008.
Construction of Wangsa Walk, a retail mall development by the Group's joint venture company, MSL, is progressing well. The development has an estimated net lettable area of 275,000 sq. ft and will be held for investment by the joint venture upon its completion in the first half of 2009.

Acquisitions

The Group's acquisitions of Nim Park at Nim Road for US$54.8 million and the 99-year leasehold land parcel in Yishun Avenue 1 for US$154.7 million completed in January and June 2008 respectively. The Group's purchase of Casa Nassau at Upper East Coast Road for US$29.7 million was approved by the Strata Titles Board in April 2008 and completed in July 2008.

Prospects
The current uncertain economic conditions have led to a slowdown in the residential property market in Singapore. Medium to longer-term prospects however, remain positive. The completions of Mera Springs and The Esta in Singapore in the second half of the year should benefit MCL Land's overall performance in 2008.

Y K Pang
Chairman
31st July 2008


MCL Land Limited
Consolidated Profit and Loss Account
				Three months ended						Six months ended
				30.6.2008		30.6.2007	Change			30.6.2008		30.6.2007	Change
			Note	US$'000		US$'000	%			US$'000		US$'000	%

Revenue				353		133,471		-100		718		133,864	- 99
Cost of sales				-		(133,068)		-100		-		(133,068)	- 100

Gross profit				353		403		-12		718		796	- 10

Other operating income				3,108		515		n/m		3,618		2,820	28
Property related expenses				13		(205)		n/m		(164)		(437)	- 62
Administrative expenses				(1,116)		(987)		13		(1,631)		(1,407)	16
Marketing expenses				(365)		(445)		-18		(365)		(1,457)	- 75
Share of joint ventures' results				1,131		2,987		-62		6,072		2,632	131

Profit before tax			2	3,124		2,268		38		8,248		2,947	180

Tax			3	60		(65)		n/m		(50)		242	n/m

Profit after tax attributable to shareholders				3,184		2,203		45		8,198		3,189	157



				US¢	US¢				%		US¢	US¢	%

Earnings per share ('EPS')
	- basic and diluted*	4		0.86	0.60				43		2.22	0.86	158



n/m = not meaningful

*	Diluted EPS is the same as basic EPS, as there were no outstanding share options.

MCL Land Limited
Consolidated Balance Sheet

			At	At
			30.6.2008	31.12.2007
		Note	US$'000	US$'000
Non-current assets 1
Plant and equipment			294	354
Investment properties			18,067	17,675
Investments in joint ventures			38,742	30,743
Deferred tax assets			406	319
			57,509	49,091

Current assets 2
Development properties for sale			1,092,484	761,363
Amounts owing by joint ventures			67,391	100,763
Debtors and prepayments			32,595	169,953
Bank balances			65,118	78,419
			1,257,588	1,110,498

Total assets			1,315,097	1,159,589

Non-current liabilities 3
Borrowings		5	364,559	227,863
Deferred tax liabilities			794	958
Retention money payable			8,835	6,337
			374,188	235,158

Current liabilities
Borrowings		5	44,053	94,760
Amounts owing to joint ventures			485	139
Creditors			350,979	290,385
Current tax liabilities			9,362	14,974
			404,879	400,258

Total liabilities			779,067	635,416

Net assets			536,030	524,173

Equity:
Share capital and reserves
Share capital			276,657	276,657
Translation reserve			135,978	105,228
Retained earnings			123,395	142,288
Shareholders' funds			536,030	524,173

Net asset value per share			US$1.45	US$1.42

Explanatory notes on material variances:
1	The increase in non-current assets at 30.6.2008 as compared to 31.12.2007 is mainly due to the strengthening of S$ against US$ and profit contribution from the Group's joint ventures.
2	The increase in current assets is mainly due to the new acquisitions of land at Yishun Avenue 1 and Nim Park, partially offset by repayment of advances from the Group's joint ventures and progress billings collected from the completed project, The Calrose.
3	The higher non-current liabilities at 30.6.2008 as compared to 31.12.2007 arose mainly from long-term loans drawn down during the period to finance the land purchases.

MCL Land Limited
Consolidated Statement of Changes in Equity for the three months ended 30 June


	Attributable to shareholders
	Share	Translation	Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000

2008
Balance at 1 April	276,657	129,364	147,302	553,323

Net gain recognised directly in equity - translation difference	-	6,614	-	6,614

Profit for the financial period	-	-	3,184	3,184

Total recognised gain for the financial period	-	6,614	3,184	9,798

Dividend	-	-	(27,091)	(27,091)

Balance at 30 June	276,657	135,978	123,395	536,030




2007
Balance at 1 April	276,657	83,094	96,140	455,891

Net loss recognised directly in equity - translation difference	-	(4,128)	-	(4,128)

Profit for the financial period	-	-	2,203	2,203

Total recognised gain/(loss) for the financial period	-	(4,128)	2,203	(1,925)

Dividend	-	-	(14,757)	(14,757)

Balance at 30 June	276,657	78,966	83,586	439,209


MCL Land Limited
Company Balance Sheet

	At	At
	30.6.2008	31.12.2007
	US$'000	US$'000
Non-current assets
Plant and equipment	254	304
Interests in subsidiaries	110,598	103,650
Investments in joint ventures	29,343	27,684
	140,195	131,638

Current assets
Amounts owing by subsidiaries	496,734	460,975
Amounts owing by joint ventures	67,391	99,558
Debtors and prepayments	206	201
Bank balances	2,580	3,029
	566,911	563,763

Total assets	707,106	695,401

Non-current liability
Borrowings	47,724	45,025

Current liabilities
Borrowings	44,054	94,760
Amounts owing to subsidiaries	150,485	93,128
Amounts owing to joint ventures	484	139
Creditors	3,994	5,101
Current tax liabilities	2,413	2,276
	201,430	195,404

Total liabilities	249,154	240,429

Net assets	457,952	454,972

Equity:
Share capital and reserves
Share capital	276,657	276,657
Translation reserve	120,545	93,361
Retained earnings	60,750	84,954
Shareholders' funds	457,952	454,972

Net asset value per share	US$1.24	US$1.23

MCL Land Limited
Company Statement of Changes in Equity for the three months ended 30 June



	Share	Translation	Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000

2008
Balance at 1 April	276,657	114,402	84,610	475,669

Net gain recognised directly in equity - translation difference	-	6,143	-	6,143

Profit for the financial period	-	-	3,231	3,231

Total recognised gain for the financial period	-	6,143	3,231	9,374

Dividend	-	-	(27,091)	(27,091)

Balance at 30 June	276,657	120,545	60,750	457,952




2007
Balance at 1 April	276,657	72,233	85,687	434,577

Net loss recognised directly in equity - translation difference	-	(4,218)	-	(4,218)

Loss for the financial period	-	-	(1,195)	(1,195)

Total recognised loss for the financial period	-	(4,218)	(1,195)	(5,413)

Dividend	-	-	(14,757)	(14,757)

Balance at 30 June	276,657	68,015	69,735	414,407


MCL Land Limited
Consolidated Statement of Cash Flows

			Three months ended		Six months ended
			30.6.2008	30.6.2007	30.6.2008	30.6.2007
			US$'000	US$'000	US$'000	US$'000

Profit before tax			3,124	2,268	8,248	2,947
Non-cash items
	Interest income		(387)	(386)	(810)	(748)
	Share of joint ventures' results		(1,131)	(2,987)	(6,072)	(2,632)
	Depreciation		43	78	86	155
	Fair value gain for an investment property		-	-	-	(1,100)
	Unrealised translation (gain)/ loss		(10)	1	(9)	2
	Profit on disposal of plant and equipment		-	-	-	(2)
			(1,485)	(3,294)	(6,805)	(4,325)
Operating profit/(loss) before working capital changes			1,639	(1,026)	1,443	(1,378)

Changes in working capital
	Development properties for sale		(191,864)	96,201	(277,828)	39,667
	Amounts owing by joint ventures		39,364	(109)	39,696	(223)
	Debtors and prepayments		30,253	(25,349)	144,213	(36,501)
	Creditors		26,732	8,077	44,880	66,265
			(95,515)	78,820	(49,039)	69,208
Cash flows generated from/(used in) operations			(93,876)	77,794	(47,596)	67,830

	Interest paid		(2,327)	(2,798)	(4,433)	(6,533)
	Interest received		374	685	846	954
	Income tax paid		(6,759)	(1,243)	(6,799)	(2,000)
			(8,712)	(3,356)	(10,386)	(7,579)
	Net cash flows generated from/(used in) operating activities 4		(102,588)	74,438	(57,982)	60,251

Cash flows from investing activities
	Purchase of plant and equipment		-	(3)	(10)	(27)
	Net proceeds from sale of plant and equipment		-	-	-	2
	Net cash flows used in investing activities		-	(3)	(10)	(25)

Cash flows from financing activities
	Drawdown of loans		148,605	22,040	206,868	55,165
	Repayment of loans		(46,136)	(43,579)	(140,479)	(55,766)
	Dividend paid		(27,091)	(14,757)	(27,091)	(14,757)
	Net cash flows provided by/(used in) financing activities 5		75,378	(36,296)	39,298	(15,358)

Net change in cash and cash equivalents			(27,210)	38,139	(18,694)	44,868
Cash and cash equivalents at the beginning of the financial period			91,280	56,105	78,419	48,801
Effect of exchange rate changes			1,048	(655)	5,393	(80)
Cash and cash equivalents at the end of the financial period			65,118	93,589	65,118	93,589

Explanatory notes on material variances:
	4	The net cash used in operating activities for the six months ended 30 June 2008 relates mainly to the new acquisitions of land at Yishun Avenue 1 and Nim Park, partially offset by progress billing collected and repayment of advances from joint ventures.
	5	The net cash flows provided by financing activities for the six months ended 30 June 2008 relates to the higher long-term loans drawn down to finance the land purchase, partially offset by dividend paid on 27 May 2008.

MCL Land Limited
Notes

1	Accounting policies and basis of preparation

	The financial statements contained in this announcement are consistent with those set out in the 2007 audited accounts which have been prepared in conformity with International Financial Reporting Standards ('IFRS'), including International Accounting Standards ('IAS') and interpretations adopted by the International Accounting Standards Board.

	There have been no changes to the accounting policies set out in the 2007 audited accounts except for the adoption of the following interpretations which are relevant to its operations:

	IFRIC 11	Group Treasury Share Transactions
	IFRIC 14	The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

	The adoption of the above interpretations did not have a material impact on the results of the Group.


2	Profit

			Group
			Three months ended			Six months ended
			30.6.2008	30.6.2007	Change	30.6.2008	30.6.2007	Change
			US$'000	US$'000	%	US$'000	US$'000	%

	Profit before tax is determined after including:
	Fair value gain for an investment property		-	-	-	-	1,100	- 100
	Net exchange gain/(loss)		(2)	2	n/m	12	3	300
	Rental income		353	382	- 8	718	753	- 5
	Interest income		387	386	-	810	748	8
	Depreciation on plant and equipment		(43)	(78)	- 45	(86)	(155)	- 45
	Profit on disposal of plant and equipment		-	-	-	-	2	- 100

	n/m = not meaningful


3	Tax

	The provision for income tax is based on the statutory tax rates prevailing in the respective countries in which Group companies operate after taking into account expenses which are not tax deductible, income not subject to tax and Group tax relief.

4	Earnings per share *

			Group
			Three months ended			Six months ended
			30.6.2008	30.6.2007		30.6.2008		30.6.2007

	Basic earnings per share*

	Profit attributable to shareholders (US$'000)		3,184	2,203		8,198		3,189

	Weighted average number of ordinary shares in issue ('000)		369,986	369,986		369,986		369,986

	Basic earnings per share (US¢)		0.86	0.60		2.22		0.86

	Underlying earnings per share

	Underlying profit attributable to shareholders (US$'000)		3,184	2,203		8,198		2,397

	Basic underlying earnings per share (US¢)		0.86	0.60		2.22		0.65

	A reconciliation of the underlying profit and profit attributable to shareholders is as follows:

			Group
			Three months ended			Six months ended
			30.6.2008	30.6.2007		30.6.2008		30.6.2007
			US$'000	US$'000		US$'000		US$'000

	Profit attributable to shareholders		3,184	2,203		8,198		3,189

	Fair value gain of an investment property (net of tax)		-	-		-		(792)

	Underlying profit attributable to shareholders		3,184	2,203		8,198		2,397

	* Diluted EPS is the same as basic EPS, as there were no outstanding share options.


5	Group borrowings

					Group
				At			At
				30.6.2008			31.12.2007
				US$'000			US$'000

	Borrowings due within one year
		- unsecured		44,053			94,760

	Borrowings due after one year
		- unsecured		47,724			45,025
		- secured		316,835			182,838
				364,559			227,863

				408,612			322,623

	Certain subsidiaries of the Company have mortgaged their development properties as security for bank loans. The net book value of properties mortgaged as at 30 June 2008 was US$543.9 million (31 December 2007: US$325.8 million).

6	Interested person transactions
		Aggregate value of all interested person transactions (excluding transactions less than S$100,000 and transactions conducted under the shareholders' mandate pursuant to Rule 920)		Aggregate value of interested person transactions conducted under shareholders' mandate pursuant to Rule 920 (excluding transactions less than S$100,000)
	Name of interested person
			US$'000		US$'000

	Three months ended 30 June 2008
	Hongkong Land Limited
	- Management consultancy fee		20		-

	Six months ended 30 June 2008
	Hongkong Land Limited
	- Management consultancy fee		51		-



7	Issue of shares

	There have been no changes in the issued share capital of the Company since 31 December 2007. There are no outstanding convertibles issued or treasury shares held by the Company as at 30 June 2008. The total number of issued share capital (excluding treasury shares) as at 30 June 2008 and 31 December 2007 was 369,985,977.


8	Others

	The results do not include any pre-acquisition profits and have not been affected by any item, transaction or event of a material and unusual nature. No significant transaction or event has occurred between 30 June 2008 and the date of this report.


	- end -

For further information, please contact:
MCL Land Limited
Steve Chu


Full text of the Financial Statements and Dividend Announcement for the six months ended 30 June 2008 can be accessed through the internet at www.mclland.com.sg.

To: Business Editor	31st July 2008
	For immediate release