| To: Business Editor | 19th March 1997 |
| For immediate release |
Hongkong Land Holdings Limited
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 1996
RESULTS
Hongkong Land Holdings Limited today announced
that the consolidated net profit after taxation and minority interests for
the year ended 31st December 1996 was US$649 million, compared with US$257 million
in 1995. This increase was due principally to a write back of
US$217 million arising from the disposal of an interest in Trafalgar
House, which had generated a US$158 million charge in 1995. Excluding
the effect of Trafalgar House in both years, the net profit after
taxation and minority interests grew 4% to US$432 million in 1996
from US$415 million in 1995.
The annual valuation of the Group's investment properties was carried out at the end of 1996 by independent professional valuers and produced a valuation surplus of US$2,062 million which has been transferred to reserves. Shareholders' funds at the year end were US$9,871 million and net asset value per share was US$3.75, an increase of 32%.
Net borrowings at the year end totalled
US$358 million which represented 4% of Shareholders' funds.
DIVIDENDS
The Directors recommend a final dividend
of US¢8.50 per share, payable in cash with a scrip alternative,
which, together with the interim dividend of US¢3.50 per
share, will make a total annual dividend of US¢12.00 per
share, an increase of 4% over 1995.
GROUP REVIEW
Hongkong Land China
Turning to the operations, the Chairman,
Mr Simon Keswick, said that Hong Kong open market office rents
stabilised early in 1996 after falling from the peak in mid 1994.
Towards the end of the year there was also increased leasing
activity in the Central business district. The Group's office
and retail portfolio, which totals some 5 million sq. ft, recorded 97% occupancy at the year
end.
The improving property investment sentiment
in Hong Kong during the year was reflected in several substantial
market transactions. The rerating of property values resulted
in a 27% increase in the valuation of the Group's investment properties
at the year end.
Looking forward, however, new property developments
under construction adjacent to Hongkong Land's Central portfolio
will be completed in 1998 and these will represent direct competition.
The Group is planning to upgrade the facilities within its portfolio
to meet this challenge.
Elsewhere in Hong Kong the Group acquired
a site in Quarry Bay where it is developing a 300,000 sq. ft Grade
A office building at a total cost of some US$200 million. The
Group also purchased a townhouse development in Stanley for US$39
million.
The feasibility of redeveloping Swire House,
a 427,000 sq. ft commercial property in Hong Kong, is under consideration.
The necessary regulatory approvals have been obtained, and a final
decision is expected before the end of the year.
The company expanded its infrastructure
interests in 1996. Progress was made in resolving the delayed
development of new facilities at Hong Kong's Kwai Chung Container
Port. As a result, the Group is now a 23% shareholder in Asia
Container Terminals, which is negotiating to operate two berths
at Container Terminal 8.
In April 1996 the company also acquired
a 33% shareholding in the newly formed China Water Company, which
will participate in water treatment and infrastructure projects
in China. This company has one project under way in Shenyang
and is studying further such ventures.
Hongkong Land International
In August 1996 the company entered the Singapore
property market by successfully tendering for a site at Marina
Square. The planning of a prime 395,000 sq. ft commercial and
retail development is now at an advanced stage.
The Group is also undertaking two new initiatives
in the Philippines; a 40% investment was made in a joint venture
with Ayala Land to develop for sale a US$400 million residential
complex in the heart of Manila; and a 20% interest was taken in
Jardine Land, which has been formed with local partners to participate
in the expanding middle-income housing market.
In Vietnam the Group's first investment
in Hanoi, Central Building, is almost fully let, and construction
of a second office development is well under way.
The company acquired a 10% interest in a
toll road in Indonesia for US$30 million as part of the Group's
strategy of developing infrastructure interests in the Region.
PROSPECTS
In conclusion, Mr Simon Keswick said, "Earnings
in the current year are expected to be flat as a result of the
rental reversion cycle. The progress made on expanding our property
and infrastructure interests in the Region will, however, provide
the basis for longer-term growth."
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