WHARF HOLDINGS(00004)2024-08-08 04:13Profit and Loss Performance - Group's underlying net profit increased by 9% to HKD 1.979 billion, primarily due to a reduction in development property provisions to HKD 564 million (2023: HKD 1.033 billion)[3] - The group reported a loss of HKD 2.637 billion due to investment property revaluation impairments and other unrealized accounting losses (2023: profit of HKD 696 million)[3] - Group's underlying net profit increased by 9% to HKD 1.979 billion (2023: HKD 1.811 billion), primarily due to reduced impairment provisions for development properties[13] - Group revenue decreased by 14% to HKD 7.032 billion (2023: HKD 8.13 billion), with operating profit down 2% to HKD 3.085 billion (2023: HKD 3.139 billion)[14] - Investment property revaluation impairment amounted to HKD 4.481 billion (2023: HKD 356 million), leading to a group loss attributable to shareholders of HKD 2.637 billion (2023: profit of HKD 696 million)[15][21] - Basic and diluted loss per share for the six months ended June 30, 2024, is HKD 0.86, compared to a profit of HKD 0.23 in the same period in 2023[35] - Revenue for the six months ended June 30, 2024, is HKD 7,032 million, down from HKD 8,130 million in the same period in 2023[36] - Net loss for the six months ended June 30, 2024, is HKD 2,558 million, compared to a net profit of HKD 735 million in the same period in 2023[36] - Total comprehensive loss for the six months ended June 30, 2024, is HKD 7,631 million, compared to HKD 5,420 million in the same period in 2023[38] - Group total revenue declined to HKD 7,032 million in H1 2024 from HKD 8,130 million in H1 2023, a decrease of 13.5%[43] - Group total operating profit fell to HKD 3,085 million in H1 2024 from HKD 3,139 million in H1 2023, a slight decrease of 1.7%[43] - Group total revenue decreased to HKD 7,032 million in 2024 from HKD 8,130 million in 2023, a decline of 13.5%[44] Property Development and Sales - Mainland China development property contracted sales dropped to RMB 700 million (2023: RMB 1.4 billion), with unsold inventory at 1.3 million square meters (2023: 1.4 million square meters)[8] - Development property revenue fell 25% to HKD 2.028 billion (2023: HKD 2.688 billion), but operating profit rose to HKD 387 million (2023: HKD 54 million), with a gross margin improvement to 19% (2023: 2%)[14] - Signed sales contracted by 41% to HKD 1.066 billion (2023: HKD 1.808 billion), with Hong Kong sales down 13% to HKD 300 million and mainland China sales down 48% to RMB 699 million[22] - Unrecognized sales decreased by 74% to RMB 575 million (December 2023: RMB 2.275 billion)[22] - Development properties segment revenue dropped to HKD 2,028 million in H1 2024 from HKD 2,688 million in H1 2023, a decrease of 24.6%[43] - Development properties segment operating profit increased to HKD 387 million in H1 2024 from HKD 54 million in H1 2023, a significant rise of 616.7%[43] - Revenue from property development sales dropped to HKD 2,028 million in 2024 from HKD 2,688 million in 2023, a decrease of 24.6%[44] Investment Properties - Mainland China investment property revenue decreased by 4% to HKD 2.326 billion, with operating profit down 6% to HKD 1.551 billion[7] - Investment property profit decreased by 5% to HKD 1.207 billion (2023: HKD 1.275 billion), while development property loss narrowed to HKD 462 million after deducting impairment provisions of HKD 564 million (2023: HKD 1.033 billion)[13] - Investment properties portfolio decreased to HKD 633 billion, representing 35% of total operating assets, with Hong Kong and Mainland China properties valued at HKD 180 billion and HKD 453 billion respectively[25][26] - Investment properties segment revenue decreased to HKD 2,364 million in H1 2024 from HKD 2,480 million in H1 2023, a decline of 4.7%[43] - Investment properties segment operating profit decreased to HKD 1,573 million in H1 2024 from HKD 1,679 million in H1 2023, a decline of 6.3%[43] Logistics and Infrastructure - Logistics infrastructure revenue fell by 12% to HKD 1.073 billion, with operating profit down 39% to HKD 123 million, impacted by reduced throughput in Hong Kong[11] - Logistics revenue decreased by 12% to HKD 1.073 billion (2023: HKD 1.221 billion), with operating profit down 39% to HKD 123 million (2023: HKD 203 million)[14] - Logistics segment revenue fell to HKD 1,073 million in H1 2024 from HKD 1,221 million in H1 2023, a reduction of 12.1%[43] - Logistics segment operating profit dropped to HKD 123 million in H1 2024 from HKD 203 million in H1 2023, a decrease of 39.4%[43] - Revenue from logistics decreased to HKD 1,073 million in 2024 from HKD 1,221 million in 2023, a decline of 12.1%[44] Financial Position and Debt - The group maintains a low debt ratio of 6.2%, with most borrowings denominated in RMB to mitigate the impact of high US interest rates[5] - Net debt increased by 11% to HKD 8.7 billion, with a net debt to total equity ratio of 6.2%, maintaining a low level[29] - Available credit facilities and issued debt securities totaled HKD 347 billion, with HKD 193 billion utilized, and HKD 116 billion of liabilities secured by properties and equipment with a total book value of HKD 393 billion[30] - The company's average effective borrowing rate decreased to 3.9% in 2024 from 4.9% in 2023[48] Dividends and Shareholder Returns - The first interim dividend remains unchanged at HKD 0.20 per share, with a total payout of HKD 611 million (2023: HKD 611 million)[4] - The company declared an interim dividend of HKD 0.20 per share, totaling HKD 611 million, unchanged from 2023[49] - The interim dividend ex-date is set for August 27, 2024, with the payment date on September 12, 2024[56] Operating Assets and Liabilities - Total operating assets (excluding bank deposits, cash, certain financial and deferred tax assets) decreased by 7% to HKD 1,787 billion, with Hong Kong, Mainland China, and overseas assets accounting for 51%, 44%, and 5% respectively[24] - Development properties assets decreased by 4% to HKD 358 billion, with Hong Kong and Mainland China properties valued at HKD 299 billion and HKD 59 billion respectively[27] - Long-term investments totaled HKD 377 billion, with listed equities accounting for HKD 300 billion, primarily held for long-term capital growth and/or reasonable dividend income[28] - Total assets as of June 30, 2024, are HKD 190,012 million, down from HKD 204,877 million as of December 31, 2023[39] - Total liabilities as of June 30, 2024, are HKD 50,147 million, down from HKD 56,674 million as of December 31, 2023[39] - Net assets as of June 30, 2024, are HKD 139,865 million, down from HKD 148,203 million as of December 31, 2023[39] Operating Cash Flow and Expenditure - Operating cash inflow before working capital changes was HKD 2.3 billion, with a net cash inflow from operating activities of HKD 500 million, and a net cash outflow from investing activities of HKD 700 million, mainly due to net purchases of long-term investments[31] - Total capital and development expenditure for 2024 is HKD 2,387 million, with HKD 1,099 million in Hong Kong and HKD 1,142 million in Mainland China[32] - Future fiscal year's major expenditure is estimated at HKD 21.425 billion, with HKD 7.432 billion already committed and HKD 13.993 billion not yet committed[33] Employee and Operational Costs - The company employs approximately 5,700 people, with about 1,000 in management roles[34] - Employee costs decreased to HKD 817 million in 2024 from HKD 825 million in 2023, a decline of 1.0%[46] - Total depreciation and amortization decreased to HKD 352 million in 2024 from HKD 356 million in 2023, a slight decline of 1.1%[46] - Net other expenses decreased to HKD 864 million in 2024 from HKD 997 million in 2023, a decline of 13.3%[47] Payables and Trade Liabilities - Trade payables decreased to HKD 748 million from HKD 883 million, with a notable reduction in the 0-30 days category from HKD 345 million to HKD 240 million[53] - Rent and customer deposits decreased to HKD 1,391 million from HKD 1,354 million[53] - Construction cost payables decreased to HKD 3,931 million from HKD 4,851 million[53] - Payables to associates increased to HKD 8,023 million from HKD 8,013 million[53] - Payables to joint ventures increased to HKD 2,005 million from HKD 1,823 million[53] - Other payables decreased to HKD 2,748 million from HKD 2,920 million[53] - Total group payables decreased to HKD 18,846 million from HKD 19,844 million[53] Audit and Compliance - The company's unaudited interim financial data for the six months ended June 30, 2024, was reviewed by the audit committee with no differing opinions[54] - The company did not purchase, sell, or redeem any of its listed securities during the financial period[56] Regional Performance - Hong Kong property sales saw a temporary boost post-stamp duty removal, with Mount Nicholson selling a unit for HKD 600 million at HKD 131,000 per square foot[6] - Operating profit in Hong Kong decreased to HKD 1,166 million in 2024 from HKD 1,301 million in 2023, a decline of 10.4%[45] - Operating profit in Mainland China increased to HKD 1,865 million in 2024 from HKD 1,736 million in 2023, a growth of 7.4%[45] Hotel Segment - Hotel segment revenue decreased by 2% to HKD 291 million, with operating profit down 73% to HKD 12 million[10] - The group opened a new hotel under the Park Hyatt brand in Changsha, marking the first non-self-operated hotel owned by the group since the 1980s[10]