HYSAN DEV(00014)2025-02-18 04:01Revenue and Profit Performance - Revenue increased by 6.2% year-on-year to HKD 3,409 million, with recurring basic profit rising by 6.8% to HKD 1,956 million, benefiting from improved operational performance despite challenging market conditions [3]. - Revenue for the year 2024 increased by 6.2% to HKD 3,409 million, compared to HKD 3,210 million in 2023 [16]. - The recurring basic profit for 2024 was HKD 1,956 million, reflecting a 6.8% increase from HKD 1,832 million in 2023 [16]. - The gross profit for the same period was HKD 2,763 million, reflecting a 6.7% increase compared to HKD 2,589 million in 2023 [90]. - The net profit for the year was HKD 271 million, a significant recovery from a loss of HKD 1,026 million in 2023 [90]. - The group reported a pre-tax profit of HKD 567 million for the year ended December 31, 2024, compared to a pre-tax loss of HKD 731 million in 2023 [102]. - The company reported a profit attributable to shareholders of HKD 35 million for 2024, a significant recovery from a loss of HKD 872 million in 2023 [112]. Business Segment Performance - The retail business revenue grew by 9.5% year-on-year, supported by the expansion of luxury flagship stores and rising rental levels, with a year-end occupancy rate of 92% [3]. - Retail segment revenue rose by 9.8% to HKD 1,684 million, while office segment revenue increased by 2.4% to HKD 1,507 million [16]. - The office business revenue decreased by 1.5% year-on-year, with a maintained occupancy rate of 90% [3]. - Hysan Place's revenue from office business increased by 2.4% to HKD 1,507 million in 2024, compared to HKD 1,472 million in 2023 [32]. - The mainland office business saw a significant increase in revenue to HKD 67 million in 2024, up from HKD 10 million in 2023, with an occupancy rate rising to 66% [39]. - Rental income from investment properties was HKD 2,989 million for 2024, up from HKD 2,826 million in 2023, reflecting a growth of 5.8% [101]. Investment and Development Projects - The Lee Gardens area optimization plan began to yield financial contributions, with over ten newly renovated luxury flagship stores set to open, including Hermès, Dior, and Cartier [9]. - The Lee Gardens Phase 8 project will expand the total area of the Lee Gardens by nearly 30%, with a total area exceeding 1 million square feet, including 60,000 square feet of green open space [9]. - The new pedestrian passage system connecting the Lee Gardens area to the MTR station is expected to be completed in the second half of 2026 [3]. - The construction of the Lee Garden Eight project is progressing smoothly and is expected to be completed by 2026, marking a significant milestone in the company's long-term development plan [41]. - The healthcare investment project maintained growth momentum, including a strategic partnership with a Hong Kong investment management company to promote cross-border healthcare innovation in the Greater Bay Area [10]. Financial Position and Capital Management - Shareholders' equity decreased by 1.8% to HKD 65,993 million, with net asset value per share declining by 1.7% to HKD 64.3 [4]. - The total equity attributable to owners decreased to HKD 65,993 million in 2024 from HKD 67,182 million in 2023, a decline of 1.8% [96]. - Total debt rose to HKD 26,717 million as of December 31, 2024, compared to HKD 25,717 million in 2023, primarily due to capital expenditures for strategic projects [71]. - The debt-to-equity ratio increased to 31.4% in 2024 from 27.2% in 2023, while the net interest coverage ratio decreased to 8.8 times from 9.6 times [76]. - The company maintained a credit rating of Baa2 from Moody's and BBB from Fitch as of December 31, 2024, reflecting strong financial strength and prudent capital management [77]. Market Conditions and Future Outlook - The company is optimistic about future market conditions and plans to continue upgrading the Lee Garden area to meet evolving consumer demands [13]. - Hong Kong retail industry faced pressure due to changing consumer preferences, with a shift from traditional shopping to experiential shopping [24]. Operational Efficiency - The property expenditure ratio decreased to 18.9% of revenue in 2024 from 19.3% in 2023, indicating improved cost efficiency [21]. - The company's operating expenses as a percentage of revenue decreased to 28% in 2024 from 29% in 2023, with total operating expenses rising by 2.8% to HKD 954 million [54]. - Employee costs, including directors' remuneration, were HKD 327 million in 2024, slightly down from HKD 331 million in 2023 [111]. Shareholder Returns - The second interim dividend declared for the year is HKD 0.81 per share, consistent with the previous year [17]. - The second interim dividend will be distributed on March 19, 2025, to shareholders registered by March 5, 2025 [125]. - The ex-dividend date is set for March 3, 2025 [125]. - The annual general meeting will be held on June 5, 2025, with the notice to be sent to shareholders by the end of March 2025 [126].