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Hongkong Land Hldgs Ltd 2021 HALF YEAR RESULTS

29/07/2021 10:29am

UK Regulatory (RNS & others)


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TIDMHKLD TIDMJAR

RNS Number : 9018G

Hongkong Land Hldgs Ltd

29 July 2021

Announcement

29th July 2021

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-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2021

Highlights

   --   Underlying profit of US$394 million, up 12% 
   --    Continued resilient performance from Investment Properties 
   --    Net asset value per share down 4% on lower capital values 
   --    Five new development projects secured 

" While higher second-half underlying profits are expected from the Group's Development Properties business due to more sales completions on the Chinese mainland, overall conditions are expected to be similar to those of the first-half."

Ben Keswick

Chairman

Results

 
 
                                                (unaudited) 
                                              Six months ended 30th 
                                                               June 
                                                   2021        2020    Change 
                                                   US$m        US$m         % 
 
 
 Underlying profit attributable to 
  shareholders(#)                                   394         353       +12 
 Loss attributable to shareholders                (865)     (1,828)       +53 
 Shareholders' funds                             34,414     35,709*        -4 
 Net debt                                         4,262      4,568*        +7 
 
 
                                                    USc         USc         % 
 
 
 Underlying earnings per share(#)                 16.90       15.12       +12 
 Loss per share                                 (37.06)     (78.31)       +53 
 Interim dividend per share                        6.00        6.00         - 
 
 
                                                    US$         US$         % 
 
 
 Net asset value per share                        14.75     15.30 *        -4 
 
 
  # 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 2020 
 
 
 
 

The interim dividend of USc6.00 per share will be payable on 13th October 2021 to shareholders on the register of members at the close of business on 20th August 2021.

HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHSED 30TH JUNE 2021

OVERVIEW

The Group's results benefited from higher Development Properties profits due to the timing of sales completions, while contributions from Investment Properties remained resilient, despite negative rental reversions in Hong Kong.

PERFORMANCE

Underlying profit attributable to shareholders during the first half was US$394 million, compared with US$353 million in the equivalent period in 2020.

There was a loss attributable to shareholders for the first half of US$865 million, which includes net non-cash losses of US$1,259 million arising from the revaluation of the Group's investment properties due to lower open market rents. This compares with a loss of US$1,828 million for the first half of 2020, which included net losses of US$2,180 million arising from investment property revaluations.

The net asset value per share at 30th June 2021 was US$14.75, compared to US$15.30 at 31st December 2020.

The Directors have declared an unchanged interim dividend of USc6.00 per share.

GROUP REVIEW

Investment Properties

The Group's office portfolio in Hong Kong continued to perform relatively well amidst the ongoing market downturn. Vacancy was 6.4% at the end of June 2021, compared to 6.3% at the end of 2020, and on a committed basis it was 5.5%, compared to 5.9% at the end of 2020. Office rental reversions were negative, with average office rents of HK$118 per sq. ft in the first half of 2021. This compares to an average rent of HK$121 per sq. ft and HK$119 per sq. ft in the first and second halves of 2020, respectively. New office leasing activity saw a modest increase in the period as a result of improved sentiment and a narrowing rental gap between Central and other parts of the city.

Trading at the Group's Central retail portfolio benefited from a modest recovery in luxury retail market sentiment in the period. Vacancy was 0.9% at the end of June 2021, compared to 0.3% at the end of 2020. On a committed basis, vacancy was 0.8%, compared to 0.3% at the end of 2020. Average retail rents were HK$180 per sq. ft in the first half of 2021, compared with HK$151 per sq. ft and HK$177 per sq. ft in the first and second halves of 2020, respectively. Excluding temporary rent relief, average retail rents in the first half of 2021 were HK$203 per sq. ft. Base retail rental reversions were negative in the period and the Group continued to provide temporary rent relief on a case-by-case basis.

In Singapore, vacancy across the Group's office portfolio was 7.5% at the end of June 2021, compared with 2.1% at the end of 2020. On a committed basis, vacancy was 2.1%, unchanged from the end of 2020. Average office rents increased to S$10.2 per sq. ft in the first half of 2021, compared with S$9.9 per sq. ft in both the first and second halves of 2020. Rental reversions remained positive in the first half of the year.

In Beijing, trading at WF CENTRAL remained robust due to the strength of luxury retail market sentiment on the Chinese mainland, with tenant sales in the period exceeding those achieved in the equivalent periods in 2019 and 2020.

In Shanghai, construction has commenced at the Group's prime mixed-use project on the West Bund and remains on schedule, with completion in multiple phases to 2027.

In Bangkok, the planning of the Group's 49%-owned prime retail and Grade A office development in the central business district continues. The development has been delayed by COVID-19 related restrictions, with completion expected in 2027 .

Development Properties

On the Chinese mainland, higher sales completions in the period resulted in an increased profit contribution, while the Group's attributable interest in contracted sales in the first half of 2021 was US$1,360 million, compared to US$591 million and US$1,544 million in the first and second halves of 2020, respectively. Market sentiment in the Group's core markets remains stable. At 30th June 2021, the Group had US$3,367 million in sold but unrecognised contracted sales, compared with US$2,584 million at the end of 2020. Both sales completions and contracted sales are in line with expectations, with sales completions expected to strengthen in the second half of the year.

Although competition to secure sites for development on the Chinese mainland remains fierce, the Group has secured three predominantly residential projects during the period: a site located in the Lishui District of Nanjing with a developable area of 93,000 sq. m. and two further sites located in the Qiaokou and Guanggu Districts of Wuhan with an aggregate attributable developable area of 245,000 sq. m.

The profit contribution from the Singapore business in the first half of 2021 was higher than in the first half of 2020, which was impacted by pandemic-related disruptions. The 309-unit Margaret Ville is fully pre-sold, whilst pre-sales at the 1,404-unit Parc Esta and the 638-unit Leedon Green projects are performing within expectations. The Group's attributable interest in contracted sales was US$172 million in the first half of 2021, compared to US$301 million and US$331 million in the first and second halves of 2020, respectively.

During the period, the Group secured two joint venture projects in Singapore, including an executive condominium site in the Tengah area and a predominantly residential site at Northumberland Road. The Group's effective interest in these projects equates to a developable area of 529,000 sq. ft.

In the rest of Southeast Asia, market sentiment remains weak in light of the ongoing impact of COVID-19 and related restrictions.

Financing

The Group's financial position remains strong. Net debt declined to US$4.3 billion at 30th June 2021 from US$4.6 billion at the end of 2020. Net gearing was 12% compared with 13% at the end of 2020.

As at 30th June 2021, the Group had committed liquidity of US$4.4 billion, compared to US$4.3 billion at the end of 2020, with an average tenor of debt of 6.4 years compared to 6.6 years at the end of 2020.

PEOPLE

Our employees continue to show exemplary commitment and resilience in safeguarding the wellbeing of our customers, and on behalf of the Board, I would like to take this opportunity to thank them for their ongoing dedication and hard work during these difficult times.

James Watkins retired from the Board following today's Board meeting. On 20th May 2021, it was announced that Simon Dixon would step down from the Board on 31st August 2021. The Board would like to record its gratitude to both of them for their significant contribution to the Group. As announced on 20th May 2021, Craig Beattie will be appointed as a Director and Chief Financial Officer of the Company with effect from 1st September 2021.

OUTLOOK

While higher second-half underlying profits are expected from the Group's Development Properties business due to more sales completions on the Chinese mainland, overall conditions are expected to be similar to those of the first-half.

Ben Keswick

Chairman

 
 
Hongkong Land Holdings Limited 
 Consolidated Profit and Loss Account 
 
 
                                                       (unaudited) 
                                               Six months ended 30th June                            Year ended 31st December 
                                         2021                               2020                               2020 
 
 
                            Underlying       Non-              Underlying       Non-              Underlying       Non- 
                              business    trading                business    trading                business    trading 
                           performance      items      Total  performance      items      Total  performance      items      Total 
                                  US$m       US$m       US$m         US$m       US$m       US$m         US$m       US$m       US$m 
 
 
Revenue (note 2)                 885.8          -      885.8        820.2          -      820.2      2,094.2          -    2,094.2 
Net operating costs (note 
 3)                            (476.4)        0.5    (475.9)      (389.4)          -    (389.4)    (1,135.2)        1.0  (1,134.2) 
Change in fair value of 
 investment properties               -  (1,248.8)  (1,248.8)            -  (2,062.9)  (2,062.9)            -  (3,443.4)  (3,443.4) 
 
Operating profit/(loss) 
 (note 4)                        409.4  (1,248.3)    (838.9)        430.8  (2,062.9)  (1,632.1)        959.0  (3,442.4)  (2,483.4) 
Net financing charges 
 
 
  *    financing charges       (106.9)          -    (106.9)       (99.5)          -     (99.5)      (194.9)          -    (194.9) 
 
  *    financing income           33.8          -       33.8         36.3          -       36.3         79.0          -       79.0 
 
 
                                (73.1)          -     (73.1)       (63.2)          -     (63.2)      (115.9)          -    (115.9) 
Share of results of 
 associates 
 and 
 joint ventures (note 5)         120.1      (4.4)      115.7         45.2    (134.5)     (89.3)        267.5    (175.4)       92.1 
                           -----------  ---------  ---------  -----------  ---------  ---------  -----------  ---------  --------- 
 
Profit/(loss) before tax         456.4  (1,252.7)    (796.3)        412.8  (2,197.4)  (1,784.6)      1,110.6  (3,617.8)  (2,507.2) 
Tax (note 6)                    (62.1)      (4.8)     (66.9)       (61.7)       12.3     (49.4)      (149.5)        4.9    (144.6) 
                           -----------  ---------  ---------  -----------  ---------  ---------  -----------  ---------  --------- 
 
Profit/(loss) after tax          394.3  (1,257.5)    (863.2)        351.1  (2,185.1)  (1,834.0)        961.1  (3,612.9)  (2,651.8) 
                           -----------  ---------  ---------  -----------  ---------  ---------  -----------  ---------  --------- 
 
Attributable to: 
Shareholders of the 
Company 
  (note 7)                       394.4  (1,259.3)    (864.9)        352.8  (2,180.4)  (1,827.6)        963.3  (3,610.7)  (2,647.4) 
Non-controlling interests        (0.1)        1.8        1.7        (1.7)      (4.7)      (6.4)        (2.2)      (2.2)      (4.4) 
                           -----------  ---------  ---------  -----------  ---------  ---------  -----------  ---------  --------- 
 
                                 394.3  (1,257.5)    (863.2)        351.1  (2,185.1)  (1,834.0)        961.1  (3,612.9)  (2,651.8) 
                           -----------  ---------  ---------  -----------  ---------  ---------  -----------  ---------  --------- 
 
 
                                   USc                   USc          USc                   USc          USc                   USc 
 
 
Earnings/(loss) per share 
 (note 8)                        16.90               (37.06)        15.12               (78.31)        41.27              (113.43) 
 
 
 
 
 
Hongkong Land Holdings Limited 
 Consolidated Statement of Comprehensive Income 
 
 
                                                                                 Year 
                                                               (unaudited)      ended 
                                                          Six months ended       31st 
                                                                 30th June   December 
                                                         2021         2020       2020 
                                                         US$m         US$m       US$m 
 
 
                                                                     (1, 8 
Loss for the period                                   (863.2)        34.0)  (2,651.8) 
Other comprehensive ( expense)/income 
 
Items that will not be reclassified 
 to 
   profit or loss: 
 
Remeasurements of defined benefit 
   plans                                                    -            -        1.7 
Tax on items that will not 
 be reclassified                                            -            -      (0.3) 
 
                                                            -            -        1.4 
Items that may be reclassified 
   subsequently to profit or loss: 
                                                      -------  -----------  --------- 
 
Net exchange translation differences 
- net (loss)/gain arising during 
 the period                                            (55.9)         42.4      400.9 
 
Cash flow hedges 
 
 
  *    net (loss)/gain arising during the period        (7.5)          3.7     (20.8) 
- transfer to profit and loss                           (0.2)        (0.8)      (0.4) 
 
 
                                                        (7.7)          2.9     (21.2) 
Tax relating to items that 
 may be 
   reclassified                                           1.3        (0.5)        3.5 
Share of other comprehensive 
   income/(expense) of associates 
    and 
   joint ventures                                         5.8      (127.4)      242.4 
 
 
                                                       (56.5)       (82.6)      625.6 
 
 
Other comprehensive (expense)/income 
   for the period, net of tax                          (56.5)       (82.6)      627.0 
                                                      -------  -----------  --------- 
 
Total comprehensive expense 
 for the 
   period                                             (919.7)    (1,916.6)  (2,024.8) 
                                                      -------  -----------  --------- 
 
Attributable to: 
Shareholders of the Company                           (922.2)    (1,908.8)  (2,025.1) 
Non-controlling interests                                 2.5        (7.8)        0.3 
                                                      -------  -----------  --------- 
 
                                                      (919.7)    (1,916.6)  (2,024.8) 
    ------------------------------------------------  -------  -----------  --------- 
 
 
 
 
 
Hongkong Land Holdings Limited 
 Consolidated Balance Sheet 
 
 
                                               (unaudited)    At 31st 
                                              At 30th June   December 
                                           2021       2020       2020 
                                           US$m       US$m       US$m 
 
 
Net operating assets 
Fixed assets                              126.0      121.9      125.2 
Right-of-use assets                        10.2       11.2       12.4 
Investment properties (note 10)        28,814.7   35,835.7   30,083.3 
Associates and joint ventures 
 (note 11)                              8,990.6    6,839.9    8,921.2 
Non-current debtors                        29.9       60.9       42.0 
Deferred tax assets                        42.0       16.0       35.5 
Pension assets                              0.6        0.1        0.7 
 
Non-current assets                     38,014.0   42,885.7   39,220.3 
 
 
Properties for sale                     2,304.3    1,975.9    1,948.8 
Current debtors                           995.7      847.9    1,081.7 
Current tax assets                         34.5       31.7       14.4 
Bank balances                           2,352.9      927.6    1,996.6 
                                      ---------  ---------  --------- 
 
Current assets                          5,687.4    3,783.1    5,041.5 
                                      ---------  ---------  --------- 
 
                                                   (3,7 40 
Current creditors                     (2,241.8)      . 9 )  (1,572.0) 
Current borrowings (note 12)            (906.5)    (362.8)    (689.5) 
Current tax liabilities                 (158.5)    (158.1)    (153.0) 
                                      ---------  ---------  --------- 
 
Current liabilities                   (3,306.8)  (4,261.8)  (2,414.5) 
                                      ---------  ---------  --------- 
 
 
Net current assets/( liabilities)       2,380.6    (478.7)    2,627.0 
Long-term borrowings (note 12)        (5,708.7)  (6,192.9)  (5,875.4) 
Deferred tax liabilities                (204.0)    (202.1)    (195.8) 
Pension liabilities                       (1.8)      (2.2)      (1.3) 
Non-current creditors                    (35.6)     (23.5)     (36.3) 
                                      ---------  ---------  --------- 
 
                                       34,444.5   35,986.3   35,738.5 
                                      ---------  ---------  --------- 
 
Total equity 
Share capital                             233.4      233.4      233.4 
Share premium                             257.3      257.3      257.3 
Revenue and other reserves             33,922.8   35,473.9   35,218.4 
                                      ---------  ---------  --------- 
 
Shareholders' funds                    34,413.5   35,964.6   35,709.1 
Non-controlling interests                  31.0       21.7       29.4 
                                      ---------  ---------  --------- 
 
                                       34,444.5   35,986.3   35,738.5 
                                      ---------  ---------  --------- 
 
 
 
 
Hongkong Land Holdings Limited 
 Consolidated Statement of Changes in Equity 
 
 
                                                                  Attributable to  Attributable 
                                                                     shareholders       to non- 
                      Share    Share    Revenue   Hedging  Exchange        of the   controlling 
                    capital  premium   reserves  reserves  reserves       Company     interests  Total equity 
                       US$m     US$m       US$m      US$m      US$m          US$m          US$m          US$m 
 
 
Six months ended 
30th June 2021 
(unaudited) 
At 1st January 
 2021                 233.4    257.3   34,881.2    (21.6)     358.8      35,709.1          29.4      35,738.5 
Total 
 comprehensive 
 (expense)/income         -        -    (864.9)     (0.5)    (56.8)       (922.2)           2.5       (919.7) 
Dividends paid by 
 the Company (note 
 9)                       -        -    (373.4)         -         -       (373.4)         (0.9)       (374.3) 
                    -------  -------  ---------  --------  --------  ------------  ------------  ------------ 
 
At 30th June 2021     233.4    257.3   33,642.9    (22.1)     302.0      34,413.5          31.0      34,444.5 
                    -------  -------  ---------  --------  --------  ------------  ------------  ------------ 
 
Six months ended 
30th June 2020 
(unaudited) 
At 1st January 
 2020                 233.4    257.3   38,039.8       8.3   (292.0)      38,246.8          43.0      38,289.8 
Total 
 comprehensive 
 expense                  -        -  (1,827.6)     (8.4)    (72.8)     (1,908.8)         (7.8)     (1,916.6) 
Dividends paid by 
 the Company (note 
 9)                       -        -    (373.4)         -         -       (373.4)         (0.5)       (373.9) 
Disposal of a 
 subsidiary               -        -          -         -         -             -        (13.0)        (13.0) 
                    -------  -------  ---------  --------  --------  ------------  ------------  ------------ 
 
At 30th June 2020     233.4    257.3   35,838.8     (0.1)   (364.8)      35,964.6          21.7      35,986.3 
                    -------  -------  ---------  --------  --------  ------------  ------------  ------------ 
 
Year ended 31st 
December 2020 
At 1st January 
 2020                 233.4    257.3   38,039.8       8.3   (292.0)      38,246.8          43.0      38,289.8 
Total 
 comprehensive 
 (expense)/income         -        -  (2,646.0)    (29.9)     650.8     (2,025.1)           0.3     (2,024.8) 
Dividends paid by 
 the Company              -        -    (513.4)         -         -       (513.4)             -       (513.4) 
Dividends paid to 
 non-controlling 
 shareholders             -        -          -         -         -             -         (0.9)         (0.9) 
Unclaimed 
 dividends 
 forfeited                -        -        0.8         -         -           0.8             -           0.8 
Disposal of a 
 subsidiary               -        -          -         -         -             -        (13.0)        (13.0) 
 
At 31st December 
 2020                 233.4    257.3   34,881.2    (21.6)     358.8      35,709.1          29.4      35,738.5 
                    -------  -------  ---------  --------  --------  ------------  ------------  ------------ 
 
 
 
 
Hongkong Land Holdings Limited 
 Consolidated Cash Flow Statement 
 
 
                                                                (unaudited) 
                                                           Six months ended          Year ended 
                                                                  30th June       31st December 
                                                         2021          2020                2020 
                                                         US$m          US$m                US$m 
 
 
Operating activities 
 
 
Operating loss                                        (838.9)     (1,632.1)           (2,483.4) 
Depreciation and amortisation                             7.7           7.4                15.3 
Change in fair value of investment 
 properties                                           1,248.8       2,062.9             3,443.4 
Gain on disposal of subsidiaries                            -         (6.2)               (7.2) 
(Increase)/decrease in properties 
 for sale                                             (353.7)        (51.4)               164.2 
Decrease in debtors                                      79.2         206.2                19.1 
                                                                     1 29 . 
Increase in creditors                                   708.3             9               162.5 
Interest received                                        20.1          20.1                42.3 
Interest and other financing charges 
 paid                                                 (109.3)       (113.4)             (220.1) 
Tax paid                                               (79.3)       (153.7)             (267.9) 
Dividends from associates and joint 
 ventures                                                39.6          36.3               112.9 
 
 
Cash flows from operating activities                    722.5         506.0               981.1 
 
Investing activities 
 
 
Major renovations expenditure                          (50.1)        (59.1)             (129.1) 
Developments capital expenditure                        (1.5)     (4,488.0)           (4,499.1) 
(Investments in and advances to)/repayment 
  from associates and joint ventures                   (34.5)          96.7               599.0 
Advance received on conditional 
 disposal of 
  a subsidiary                                              -       2,252.0                   - 
Proceeds received for disposal 
 of subsidiaries                                            -          47.7             4,619.0 
Deposits refunded for disposal 
 of subsidiaries                                            -             -           (2,005.7) 
 
 
                                                                                         (1,415 
Cash flows from investing activities                   (86.1)     (2,150.7)                 .9) 
 
Financing activities 
 
 
Drawdown of borrowings                                  593.8       2,481.7             3,726.9 
Repayment of borrowings                               (505.1)       (925.6)           (2,268.8) 
P rincipal elements of lease payments                   (1.4)         (2.1)               (4.6) 
Dividends paid by the Company                         (369.4)       (367.1)             (509.6) 
Dividends paid to non-controlling 
 shareholders                                           (0.9)         (0.1)               (0.9) 
 
 
Cash flows from financing activities                  (283.0)       1,186.8               943.0 
 
Net cash inflow/(outflow)                               353.4       (457.9)               508.2 
Cash and cash equivalents at beginning 
 of period                                            1,990.4       1,418.0             1,418.0 
Effect of exchange rate changes                           5.7        (35.1)                64.2 
 
Cash and cash equivalents at end 
 of period                                            2,349.5         925.0             1,990.4 
                                                      -------     ---------        ------------ 
 
 
 

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 2020 annual financial statements and the Group has not early adopted any standard or amendments that have been issued but not yet effective, except as mentioned below.

Interest rate benchmark reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (effective 1st January 2021).

The amendments provide practical expedient from certain requirements under the IFRSs as a result of the reform which affect the measurement of financial assets, financial liabilities and lease liabilities, and a number of reliefs for hedging relationships. The Group applied the amendments from 1st January 2021 and there is no significant impact on the Group's consolidated financial statements.

   2.   REVENUE 
 
                       Six months ended 30th June 
                                      2021   2020 
                                      US$m   US$m 
 
 
 Rental income                       469.8  466.5 
 Service income                       83.3   67.6 
 Sales of properties 
                                     -----  ----- 
 
 - recognised at a point in time      46.0  102.0 
 - recognised over time              286.7  184.1 
 
                                     332.7  286.1 
                                     -----  ----- 
 
                                     885.8  820.2 
                                     -----  ----- 
 By business 
 Investment Properties               541.9  530.3 
 Development Properties              343.9  289.9 
                                     -----  ----- 
 
                                     885.8  820.2 
                                     -----  ----- 
 
   3.   NET OPERATING COSTS 
 
                            Six months ended 30th June 
                                         2021     2020 
                                         US$m     US$m 
 
 
 Cost of sales                        (383.9)  (321.8) 
 Other income                             4.5      6.7 
 Asset impairment reversal                0.5        - 
 Gain on disposal of a subsidiary           -      6.2 
 Administrative expenses               (97.0)   (80.5) 
                                      ------- 
 
                                      (475.9)  (389.4) 
                                      -------  ------- 
 

4. OPERATING PROFIT/( LOSS)

 
                                             Six months ended 30th June 
                                                        2021       2020 
                                                        US$m       US$m 
 
 By business 
 Investment Properties                                 431.7      432.2 
 Development Properties                                 21.2       35.9 
 Corporate                                            (43.5)     (37.3) 
                                                   ---------  --------- 
 
 Underlying business performance                       409.4      430.8 
 Change in fair value of investment properties     (1,248.8)  (2,062.9) 
 Asset impairment reversal                               0.5          - 
                                                   ---------  --------- 
 
                                                     (838.9)  (1,632.1) 
                                                   ---------  --------- 
 
   5.   SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES 
 
                                        Six months ended 30th June 
                                                     2021     2020 
                                                     US$m     US$m 
 
 By business 
 Investment Properties 
 
 - operating profit                                  70.6     60.7 
 - net financing charges                           (16.3)   (20.2) 
 - tax                                              (8.7)    (7.6) 
 
 
 - net profit                                        45.6     32.9 
 
 Development Properties 
 
 - operating profit                                 120.8     41.4 
 - net financing charges                            (4.3)    (6.2) 
 - tax                                             (40.4)   (19.7) 
 - non-controlling interests                        (1.6)    (3.2) 
 
 
 - net profit                                        74.5     12.3 
                                                   ------  ------- 
 
 Underlying business performance                    120.1     45.2 
 Change in fair value of investment properties 
    (net of deferred tax)                           (4.4)  (134.5) 
 
                                                    115.7   (89.3) 
                                                   ------  ------- 
 
   6.   TAX 
 
                                           Six months ended 30th June 
                                                         2021    2020 
                                                         US$m    US$m 
 
 
 Tax charged to profit and loss is analysed 
  as follows: 
 
 Current tax                                           (62.9)  (40.8) 
 Deferred tax 
 - changes in fair value of investment 
  properties                                            (4.8)    12.3 
 - other temporary differences                            0.8  (20.9) 
                                                       ------  ------ 
 
                                                       (66.9)  (49.4) 
                                                       ------  ------ 
 
 Tax relating to components of other comprehensive 
  income or expense is analysed as follows: 
 
 Cash flow hedges                                         1.3   (0.5) 
                                                       ------  ------ 
 

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

Share of tax charge of associates and joint ventures of US$52.7 million (2020: US$1 8 .8 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; impairment of non-depreciable intangible assets; 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 
                                                               20 21          2020 
                                                                US$m          US$m 
 
 
 Change in fair value of investment properties             (1,248.8)     (2,062.9) 
 Deferred tax on change in fair value of investment 
  properties                                                   (4.8)          12.3 
     Share of change in fair value of investment 
      properties of 
     associates and joint ventures (net of deferred 
      tax)                                                     (4.4)       (134.5) 
 Asset impairment reversal                                       0.5             - 
 Non-controlling interests                                     (1.8)           4.7 
 
                                                           (1,259.3)     (2,180.4) 
                                                           ---------   ----------- 
 
 
   8.   EARNINGS PER SHARE 

Earnings per share are calculated on loss attributable to shareholders of US$864.9 million (2020: US$1,827.6 million) and on the weighted average number of 2,333.9 million (2020: 2,3 33 . 9 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 
                                                      2021                       2020 
 
 
                                                            Earnings                   Earnings 
                                                           per share                  per share 
                                                  US$m           USc        US$m            USc 
 
 
     Underlying profit attributable 
      to 
     shareholders                                394.4         16.90       352.8          15.12 
 Non-trading items (note 7)                  (1,259.3)                 (2,180.4) 
 
 Loss attributable to shareholders             (864.9)       (37.06)   (1,827.6)        (78.31) 
                                             ---------                 --------- 
 
 
   9.   DIVIDS 
 
                                    Six months ended 30th June 
                                                   2021   2020 
                                                   US$m   US$m 
 
 
   Final dividend in respect of 2020 of USc 16 
    .00 
    (2019: USc16.00) per share                    373.4  373.4 
                                                  -----  ----- 
 

An interim dividend in respect of 20 21 of USc 6 .00 (2020: USc6.00) per share amounting to a total of US$140.0 million (2020: US$140. 0 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 20 21 .

10. INVESTMENT PROPERTIES

 
                                                   Year ended 
                                                         31st 
                       Six months ended 30th June    December 
                                  2021       2020        2020 
                                  US$m       US$m        US$m 
 
 
 At beginning of period       30,083.3   33,191.2    33,191.2 
 Exchange differences           (45.9)      154.3       635.8 
 Additions                        26.1    4,553.1     4,621.3 
 Disposal of subsidiaries            -          -   (4,921.6) 
 Decrease in fair value      (1,248.8)  (2,062.9)   (3,443.4) 
                                                   ---------- 
 
 At end of period             28,814.7   35,835.7    30,083.3 
                             ---------  ---------  ---------- 
 

11. ASSOCIATES AND JOINT VENTURES

 
                                                At 31st 
                               At 30th June    December 
                              2021     2020        2020 
                              US$m     US$m        US$m 
 
 
 By business 
 Investment Properties     4,907.3  3,540.0     5,132.1 
 Development Properties    4,083.3  3,299.9     3,789.1 
                                             ---------- 
 
                           8,990.6  6,839.9     8,921.2 
                           -------  -------  ---------- 
 

12. BORROWINGS

 
                                      At 30th June  At 31st December 
                                     2021     2020              2020 
                                     US$m     US$m              US$m 
 
 
 Current 
 
 
 Bank overdrafts                      3.4      2.6               6.2 
 Bank loans                          62.4    317.3             100.3 
 Current portion of long-term 
  borrowings 
 
   *    bank loans                  218.9     42.9             516.8 
 
   *    medium term notes           621.8        -              66.2 
 
 
                                    906.5    362.8             689.5 
 
 Long-term 
 
 
 Bank loans                       2,339.5  2,401.8           1,939.1 
 Medium term notes 
 
 - due 2021                             -     66.7                 - 
 - due 2022                          65.0    623.9             622.7 
 - due 2023                         179.9    180.1             180.1 
 - due 2024                         411.0    416.1             414.3 
 - due 2025                         645.4    647.0             646.2 
 - due 2026                          38.6     38.8              38.8 
 - due 2027                         186.7    186.8             186.8 
 - due 2028                         183.2    183.5             183.5 
 - due 2029                         121.8    121.9             121.9 
 - due 2030                         697.9    697.6             697.9 
 - due 2031                          25.5     25.5              25.5 
 - due 2032                         140.6    140.7             140.8 
 - due 2033                          89.5     89.6              89.6 
 - due 203 4                         77.4     77.5              77.5 
 - due 203 5                        254.6     51.1             254.9 
 - due 2038                         109.5    105.6             111.3 
 - due 203 9                        110.5    106.6             112.4 
 - due 2040                          32.1     32.1              32.1 
 
 
                                  3,369.2  3,791.1           3,936.3 
 
 
                                  5,708.7  6,192.9           5,875.4 
                                  -------  -------  ---------------- 
 
                                  6,615.2  6,555.7           6,564.9 
                                  -------  -------  ---------------- 
 

13. FINANCIAL INSTRUMENTS

Financial instruments by category

The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2021 and 31st December 2020 are as follows:

 
 
                                                                        Other 
                                                    Financial       financial 
                                 Fair value of         assets     liabilities      Total 
                                       hedging   at amortised    at amortised   carrying       Fair 
                                   instruments          costs           costs     amount      value 
                                          US$m           US$m            US$m       US$m       US$m 
 
 
     30th June 2021 
     Financial assets measured 
      at fair value 
 Derivative financial instruments         24.5              -               -       24.5       24.5 
                                        ------                 -------------- 
 
     Financial assets not measured 
      at fair 
         value 
 Debtors                                     -          248.5               -      248.5      248.5 
 Bank balances                               -        2,352.9               -    2,352.9    2,352.9 
                                        ------  -------------                  ---------  --------- 
 
                                             -        2,601.4               -    2,601.4    2,601.4 
                                        ------  -------------  --------------  ---------  --------- 
 
     Financial liabilities measured 
      at fair 
         value 
 Derivative financial instruments       (18.2)              -               -     (18.2)     (18.2) 
                                        ------                 -------------- 
 
     Financial liabilities not 
      measured at 
         fair value 
 Borrowings                                  -              -       (6,615.2)  (6,615.2)  (6,910.5) 
     Trade and other payable 
      excluding 
     non-financial liabilities               -              -         (886.0)    (886.0)    (886.0) 
 
                                             -              -       (7,501.2)  (7,501.2)  (7,796.5) 
                                        ------  -------------  --------------  ---------  --------- 
 
 
 
     31st December 2020 
     Financial assets measured 
      at fair value 
 Derivative financial instruments         33.4        -          -       33.4         33.4 
                                        ------           --------- 
 
     Financial assets not measured 
      at fair 
         value 
 Debtors                                     -    242.3          -      242.3        242.3 
 Bank balances                               -  1,996.6          -    1,996.6      1,996.6 
                                        ------  -------             ---------  ----------- 
 
                                             -  2,238.9          -    2,238.9      2,238.9 
                                        ------  -------  ---------  ---------  ----------- 
 
     Financial liabilities measured 
      at fair 
         value 
 Derivative financial instruments       (16.1)        -          -     (16.1)       (16.1) 
                                        ------  -------  ---------  ---------  ----------- 
 
     Financial liabilities not 
      measured at 
         fair value 
 Borrowings                                  -        -  (6,564.9)  (6,564.9)    (6,904.0) 
     Trade and other payable 
      excluding 
     non-financial liabilities               -        -    (802.4)    (802.4)      (802.4) 
 
                                             -        -  (7,367.3)  (7,367.3)    (7,706.4) 
                                        ------  -------  ---------  ---------  ----------- 
 
 

Fair value estimation

(a) Financial instruments that are measured at fair value based on observable current market transactions

 
                                           At 30th  At 31st December 
                                         June 2021              2020 
                                              US$m              US$m 
 
 
 Assets 
 Derivative financial instruments 
  at fair value 
 - through other comprehensive 
  income                                       6.3               9.7 
 - through profit and loss                    18.2              23.7 
                                       -----------  ---------------- 
 
                                              24.5              33.4 
                                       -----------  ---------------- 
 
 Liabilities 
 Derivative financial instruments 
  at fair value 
 - through other comprehensive 
  income                                    (18.2)            (16.1) 
 
 

The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date. The rates for interest rate swaps and forward foreign exchange contracts are calculated by reference to market interest rates and foreign exchange rates.

There were no changes in valuation techniques during the six months ended 30th June 20 21 and the year ended 31st December 2020.

(b) Financial instruments that are not measured at fair value

The fair values of current debtors, bank balances, current creditors and current borrowings are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.

The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates.

14. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Total capital commitments at 30th June 2021 and 31st December 2020 amounted to US$1,109.3 million and US$828.8 million, respectively.

Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.

15. RELATED PARTY TRANSACTIONS

Jardine Strategic Limited ('JSL') became the parent company of the Group following the completion of the simplification of the Group's parent company structure in April 2021. Jardine Strategic Holdings Limited and JMH Bermuda Limited, a wholly-owned subsidiary of the Group's ultimate parent company, Jardine Matheson Holdings Limited ('JMH'), amalgamated under the Bermuda Companies Act to form JSL, a wholly-owned subsidiary of JMH. Both JMH and JSL are incorporated in Bermuda.

In the normal course of business, the Group has entered into a variety of transactions with the subsidiaries, associates and joint ventures of JMH ('Jardine Matheson group members'). The more significant of these transactions during the six months ended 30th June 2021 are described below:

Management fee

The management fee payable by the Group, under an agreement entered into in 1995, to Jardine Matheson Limited ('JML') was US$2.0 million (2020: US$1.8 million), being 0.5% per annum of the Group's underlying profit in consideration for management consultancy services provided by JML, a wholly-owned subsidiary of JMH.

Property and other services

The Group rented properties to Jardine Matheson group members. Gross rents on such properties amounted to US$9.5 million (2020: US$10.3 million).

The Group provided project management services and property management services to Jardine Matheson group members amounting to US$1.1 million (2020: US$1.3 million).

Jardine Matheson group members provided property maintenance and other services to the Group in aggregate amounting to US$22.8 million (2020: US$25.1 million).

Hotel management services

Jardine Matheson group members provided hotel management services to the Group amounting to US$1.2 million (2020: US$0.4 million).

Outstanding balances with associates and joint ventures

Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors as appropriate.

Hongkong Land Holdings Limited

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain unchanged:

   --    Economic Risk 
   --    Commercial Risk and Financial Risk 
   --    Regulatory and Political Risk 
   --    Pandemic, Natural Disasters, Climate Change and Terrorism 
   --    Cybersecurity Risk 

For greater detail, please refer to page 93 of the Company's Annual Report for 2020, a copy of which is available on the Company's website www.hkland.com.

Responsibility Statement

The Directors of the Company confirm to the best of their knowledge that:

(a) the condensed financial statements have been prepared in accordance with IAS 34; and

(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.

For and on behalf of the Board

Robert Wong

Simon Dixon

Directors

Dividend Information for Shareholders

The interim dividend of USc6.00 per share will be payable on 13th October 2021 to shareholders on the register of members at the close of business on 20th August 2021. The shares will be quoted ex-dividend on 19th August 2021, and the share registers will be closed from 23rd to 27th August 2021, inclusive.

Shareholders will receive their cash dividends in United States Dollars, except when elections are made for alternate currencies in the following circumstances.

Shareholders on the Jersey branch register

Shareholders registered on the Jersey branch register will have the option to elect for their dividends to be paid in Sterling. These shareholders may make new currency elections for the 2021 interim dividend by notifying the United Kingdom transfer agent in writing by

24th September 2021. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 29th September 2021.

Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in Sterling only as calculated above.

Shareholders on the Singapore branch register who hold their shares through T he Central Depository (Pte) Limited ('CDP')

Shareholders who are on CDP's Direct Crediting Service ('DCS')

Those shareholders who are on CDP's DCS will receive their cash dividends in Singapore Dollars unless they opt out of CDP Currency Conversion Service, through CDP, to receive United States Dollars.

Shareholders who are not on CDP's DCS

Those shareholders who are not on CDP's DCS will receive their cash dividends in United States Dollars unless they elect through CDP to receive Singapore Dollars.

Shareholders on the Singapore branch register who wish to deposit their shares into the CDP system by the dividend record date, being 20th August 2021, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar, by no later than 5.00 p.m. (local time) on 19th August 2021.

About Hongkong Land Group

Hongkong Land is a major listed property investment, management and development group. Founded in 1889, Hongkong Land's business is built on excellence, integrity and partnership.

The Group owns and manages more than 850,000 sq. m. of prime office and luxury retail property in key Asian cities, principally in Hong Kong, Singapore, Beijing and Jakarta . Its properties attract the world's foremost companies and luxury brands.

The Group's Central Hong Kong portfolio represents some 450,000 sq. m. of prime property. It has a further 165,000 sq. m. of prestigious office space in Singapore mainly held through joint ventures, a luxury retail centre at Wangfujing in Beijing, and a 50% interest in a leading office complex in Central Jakarta. The Group also has a number of high quality residential, commercial and mixed-use projects under development in cities across China and Southeast Asia. In Singapore, its subsidiary, MCL Land, is a well-established residential developer.

Hongkong Land Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. The Group's assets and investments are managed from Hong Kong by Hongkong Land Limited. Hongkong Land is a member of the Jardine Matheson Group.

- end -

For further information, please contact:

 
Hongkong Land Limited 
Robert Wong               (852) 2842 8428 
Simon Dixon               (852) 2842 8101 
Mark Lam                  (852) 2842 8211 
 
Brunswick Group Limited 
Andrea Ngai               (852) 3512 5093 
 

As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results announcement will remain available on the Company's website, www.hkland.com, together with other Group announcements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

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