RESULTS

The Directors are pleased to announce that the Group's unaudited consolidated net profit after taxation and minority interest for the first half of 1999 amounted to HK$882.19 million, an increase of about 413% over the corresponding period in 1998 (HK$171.97 million). Earnings per share increased to 85.43 cents (16.72 cents for 1998).

The Group's unaudited consolidated results for the six months ended 30 June 1999, with comparative figures for the corresponding period in 1998, are as follows:

Notes:

1. Turnover figure for 1998 has been adjusted to conform to current period's presentation.

2. Taxation:

3. The calculation of the basic and diluted earnings per share is based on the following data :-

No diluted earnings per share for 1998 has been presented as the exercise of the subscription rights attached to the outstanding share options, warrants and convertible bonds would not have any dilutive effect.

INTERIM DIVIDEND

In view of the substantial proportion of non-recurring gains in the net profit for the six months ended 30 June 1999 and in the interest of prudence, your Directors have decided to declare an interim dividend of 10 cents per share (1998 : 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 13 October 1999 and elections will be required to be made on or before 29 October 1999.

The share register will be closed from 8 to 12 October 1999, 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 5 November 1999.

INVESTMENT PROPERTIES

The overall property leasing market remains slow although it appears that downward pressures have begun to ease. The office leasing market has seen keen competition amidst a weak environment, especially among new building landlords. In the retail leasing market, rental levels remain generally stagnant although the sector is demonstrating greater resilience compared to last year. Demand for luxury residential accommodations remains soft. The occupancy rates for the Group's office, retail and residential portfolio are about 88%, 99% and 87%, respectively.

DEVELOPMENT PROPERTIES

Singapore

Further development on the Group's three residential projects in Singapore remains on hold. These projects are the 66,040 square metre (710,929 square foot) Sanctuary Green, 87,373 square metre (940,570 square foot) Garden Palace and 34,920 square metre (375,878 square foot) Newton Grove site, in which the Group has a 10%, 10% and 25% interest, respectively. With respect to the completed 35,976 square metre (387,100 square foot) Stratford Court residential development, all of the units have been sold. The Group has a 10% interest in this project.

Shanghai, The People's Republic of China

With Phase One of Peace Garden, about 80% of the units in this completed development have been sold. The Group has a 44.725% interest in this project. Phase One of The Grand Gateway, of which the Group has a 16.875% interest, is under development. The 33,479 square metre (360,372 square foot) residential tower has been completed and the 99,251 square metre (1,068,338 square foot) retail podium is scheduled for completion at the end of this year. Leasing for both the residential units and retail podium are now in progress.

Strata Sale of No. 3 Garden Terrace

Sales of the remaining thirty-six units of No. 3 Garden Terrace were concluded in the first half of this year. Sales proceeds generated during this period amounted to HK$620.81 million.

PROSPECTS

While there are recent signs indicating that the local economy may be moving out of its consolidation phase, the overall property leasing market remains challenging. The Group is continuing to strengthen its financial position by further reducing debt and maximising the return on its investment property portfolio.

As the Group progresses forward, an important emphasis is being placed on growth opportunities. With the property market experiencing a downturn, the Group, with its solid financial standing, is well positioned to pursue opportunities that lie ahead.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During the six months ended 30 June 1999, US$1.83 million convertible bonds of a subsidiary of the Group were repurchased at an average price of 99.78% of the issued cost.

Save as disclosed above, the Company or any of its subsidiaries had not repurchased, sold or redeemed any of the Company's listed securities during the period.

YEAR 2000 COMPLIANCE

The Group recognises that the Year 2000 problem is a serious and complex business issue. Since 1997, the Group has developed and implemented a Year 2000 compliance programme ("Programme") to ensure that all major systems can properly function prior to, during and after the transition into year 2000.

The definition, DISC PD2000-1 issued by the British Standards Institution, has been adopted as the basis of our Programme. As mentioned in the 1998 interim and annual reports, a Y2K committee has been established to monitor the Programme. Such committee reports regularly to senior management including the Chairman and Managing Director of the Group.

As of the date of this report, the Programme has been on schedule, with the major systems of the Group being Year 2000 ready at the end of June 1999. Since the Group's business also relies upon and interfaces with third parties, the Group has also been actively assessing the Year 2000 readiness of its major suppliers, contractors and other major business partners. The Programme will proceed based on the best information available. However, there remains a risk that the Group's operations may be disrupted due to the non-compliance of third parties. In addition, disruption may also be caused by unforeseen circumstances affecting the Group's systems or the systems of its business partners. Hence, an extensive contingency plan has been developed with the objective of responding to any interruption in a speedy and organised manner. The plan will continue to be refined and adjusted throughout 1999.

Total costs required for the Programme is estimated to be in the region of HK$1.5 million, of which around HK$1 million have been spent up to 30 June 1999, principally being costs relating to rectifications and testings. These costs have been or, as the case may be, will be expensed through the profit and loss account. Costs relating to upgrading our mainframe computer system that are not directly related to the Programme but which address some Year 2000 issues are not included in these costs.

H. C. Lee
Chairman

Hong Kong, 10 September 1999

© 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.