5 September 2000
2000 Interim Results Announcement
INTERIM RESULTS ANNOUNCEMENT 2000
CHAIRMAN'S STATEMENT
OVERVIEW
Conditions have generally improved in the overall leasing market during the first part of 2000. This is particularly evident in the Grade "A" office sector, hard-hit in 1999 by the local recession coinciding with a significant increase in supply. By the first half of this year, however, substantially all of such new space in prime locations has been let and the local economy has shown signs of recovery.
The average achieved rentals in our portfolio have shown a good recovery in general when compared with the levels secured in l999, although the reversion pattern of our leases inevitably delays the full impact of this recovery on our revenue. The outlook for the Group's investment properties is continuing to improve alongside the further strengthening of local economic conditions.
RESULTS
Net profit for the six months ended 30 June 2000 was HK$626.12 million compared with HK$921.75 million (re-stated pursuant to the adoption of SSAP 24) in the first half of 1999, representing a decrease of 32.1% on the equivalent period in 1999 which period recorded non-recurring gains from property sales of HK$455.79 million. The Group's net rental income decreased by 7.8%, mainly attributable to rent reviews and relettings secured at lower rents. The impact of such negative rental reversions was, however, largely offset by reduced interest expenses reflecting the Group's debt reduction efforts.
Earnings per share were 60.63 cents, also a decline of 32.1% (89.27 cents (as re-stated) for the same period in 1999).
INTERIM DIVIDEND
Your Directors have today declared an interim dividend of 11 cents per share (1999 : 10 cents). The dividend will be payable in cash with a scrip dividend alternative. Shareholders who elect for the scrip dividend will be allotted new ordinary shares of HK$5 par value each, credited as fully paid, subject to the Listing Committee of The Stock Exchange of Hong Kong Limited agreeing to grant the listing of and permission to deal in the new shares to be issued by way of scrip dividend. A circular containing details of the scrip dividend and the form of election will be mailed to shareholders on or about 11 October 2000 and elections will be required to be made on or before 26 October, 2000.
The share register will be closed from 28 September, 2000 to 3 October, 2000, both dates inclusive. Definitive share certificates in respect of the scrip dividend and cheques (for those shareholders who do not elect for scrip dividend) will be despatched to shareholders on or about 1 November, 2000.
OPERATIONS
Investment Properties
There are positive developments in our office portfolio during the review period. The average achieved rents have increased considerably when compared with low levels secured in 1999. Although the earlier part of the year coincided with the move of the government and another major tenant to headquarter locations, the occupancy rate reached 91%. The level of activities has been robust, whether in terms of achieving fresh or renewed lettings. This should further support rent levels.
Our retail portfolio, located in the Hong Kong island retail hub of Causeway Bay, has enjoyed virtually full occupancy even during the difficult past year. Encouraging sales trends have been recorded during the review period, in the light of improved consumer sentiment and increased tourist arrivals. Demand for the Group's luxury residential portfolio has also been strong, which premises are now almost fully-let.
Development Properties
Singapore
The Group has minority interests in three residential development projects in Singapore, which market has shown signs of recovery during the first half of this year.
Pre-sales marketing for the first phase of the Sanctuary Green development, in which the Group has a 10% interest, is continuing satisfactorily. Superstructure work is scheduled to commence in the third quarter of this year. With piling works for both the Gardens at Bishan and Amaryllis Ville projects having been completed, they will be launched pending market conditions. The Group has a 10% and 25% interest in these projects respectively.
Shanghai, The People's Republic of China
The Group has a 44.725% interest in the Peace Garden project. Substantially all the units in the completed Phase One have been sold. The Group is closely monitoring the market situation in formulating future plans for Phase II.
Leasing for both the residential tower and retail podium of Phase One of the Grand Gateway is continuing satisfactorily. The Group has a 16.875% interest in this development.
OUTLOOK
There are encouraging signs of recovery in the overall leasing market during the first part of year 2000. Both the activity and rental trends have witnessed a healthy upturn, as supported by the further strengthening of demand. The absence of any significant new supply of Grade "A" office space in prime areas over the next two years is expected to underpin the continued recovery.
The Group remains in a strong financial position. Our focus will continue to be on maximizing the return on our investment property portfolio while selectively pursuing opportunities that lie ahead.
H. C. Lee
Chairman
Hong Kong, 5 September 2000
CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2000 - UNAUDITED
Six Months Ended 30 June
2000 1999
HK$'000 HK$'000
Turnover 1,382,721 2,007,360
Property expenses (108,026) (118,078)
Cost of sales of interest in securities (297,328) (404,066)
Cost of property sales - (165,025)
----------- -----------
Gross profit 977,367 1,320,191
Other revenue 234 186
Administrative expenses (34,366) (37,863)
----------- -----------
Profit from operations (Note 2) 943,235 1,282,514
Finance costs (Note 3) (239,565) (289,682)
Share of results of associates 111 (4,308)
----------- -----------
Profit before tax 703,781 988,524
Taxation (Note 4) (42,427) (26,989)
----------- -----------
Profit after tax 661,354 961,535
Minority interests (35,232) (39,783)
----------- -----------
Profits attributable to shareholders 626,122 921,752
Transfer to capital redemption reserve (30,970) -
Premium on shares repurchased (21,554) -
Interim dividend (113,686) (103,624)
----------- -----------
Retained profit 459,912 818,128
=========== ===========
Earnings per share (cents) (Note 5)
Basic 60.63 89.27
Diluted 60.62 88.08
Notes:
1. Basis of preparation
The interim accounts have been prepared in accordance with the principal accounting policies set out in the 1999 annual report. Following the adoption of the accounting treatment specified by SSAP 24 (Accounting for investments in securities) in 1999, the first-half profit for 1999 has been increased by HK$39,563,245. Comparative information have been restated to reflect this change in accounting policy.
2. Profit from operations
Six Months Ended 30 June
2000 1999
HK$'000 HK$'000
Profit from operations has
been arrived at after charging:
Depreciation 2,656 2,881
And after crediting:
Rental income arising from
operating leases less
out-goings 665,835 721,920
Dividends from listed
investments 4,044 1,350
Net realised and unrealised
gain on trading securities - 6,683
Gain on disposal of interests in
other securities 293,842 130,474
Gain on property sales - 455,785
=========== ===========
3. Finance costs
Six Months Ended 30 June
2000 1999
HK$'000 HK$'000
Interest on
- Bank loans, overdraft and
other loans wholly repayable
within five years 126,097 146,482
- Convertible bonds 25,829 37,733
- Floating rate notes 80,291 61,680
Amortization of convertible
bonds and floating rate notes
issue expenses 3,695 4,301
Bank charges 3,673 31,630
Exchange (gain) loss (20) 7,856
----------- -----------
239,565 289,682
=========== ===========
4. Taxation
Six Months Ended 30 June
2000 1999
HK$'000 HK$'000
Hong Kong Profits Tax
- For the year 42,427 43,566
- Tax rebate - (15,886)
----------- -----------
Tax attributable to the
company and its subsidiaries 42,427 27,680
Share of tax rebate attributable
to associates - (691)
----------- -----------
42,427 26,989
=========== ===========
Hong Kong Profits Tax is calculated at 16% (1999: 16%) of the estimated assessable profit for the year.
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Six Months Ended 30 June
2000 1999
HK$'000 HK$'000
Earnings
Earnings for the
purposes of basic
earnings per share 626,122,083 921,752,041
Effect of dilutive
potential ordinary
shares:
- Interest on convertible bonds - 31,460,653
------------- -------------
Earnings for the
purposes of diluted
earnings per share 626,122,083 953,212,694
============= =============
Number of shares
Weighted average
number of ordinary
shares for the purposes
of basic earnings per share 1,032,693,024 1,032,595,852
Effect of dilutive
potential ordinary shares:
- Share options 129,231 198,231
- Convertible bonds - 49,359,945
------------- -------------
Weighted average
number of ordinary
shares for the purposes
of diluted earnings per share 1,032,822,255 1,082,154,028
============= =============
6. Reserves
Share Investment Capital Retained
premium revaluation redemption profits
account reserve reserve
HK$'000 HK$'000 HK$'000 HK$'000
At 1 January 2000 1,258,363 1,654,177 69,140 3,110,025
Premium on issue of
shares pursuant to
scrip dividend scheme 10,184 - - -
Share issue expenses (10) - - -
Unrealised gain on
interests in other
securities - 674,958 - -
Recognition of
unrealized gain on
disposal of interests
in other securities
transferred to income
statement - (293,922) - -
Share repurchased
and cancelled:
- Nominal value of
shares repurchased - - 30,970 (30,970)
- Premium on shares
repurchased - - - (21,554)
Net profit for the period - - - 512,436
---------- ---------- ---------- ----------
At 30 June 2000 1,268,537 2,035,213 100,110 3,569,937
========== ========== ========== ==========
ADDITIONAL INFORMATION
CORPORATE GOVERNANCE
None of the Directors of the Company is aware of any information which would reasonably indicate that the Company is not, or was not for any part of the accounting period covered by the interim report, in compliance with the Code of Best Practice as set out in the Listing Rules of The Stock Exchange of Hong Kong Limited.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
During the six months ended 30 June 2000, the Company repurchased on The Stock Exchange of Hong Kong Limited an aggregate of 6,194,000 shares at a total consideration of HK$52,523,976.66.
A wholly-owned subsidiary of the Company redeemed on 1 June 2000 US$117.98 million in nominal value of the 6.75% convertible bonds due 2000 (the "2000 Bonds") in accordance with its terms of issue. Such bonds, guaranteed by the Company, were listed on the Luxembourg Stock Exchange. Such issuer also repurchased US$320,000 in nominal value of the 2000 Bonds at an aggregate consideration of US$319,200 during the first six months of this year.
Save as disclosed above, the Group had not repurchased, sold or redeemed any of the Company's listed securities during the review period.
| © Copyright 1996-2012 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |