SHK PPT(00016)2023-09-07 08:33Financial Performance - The company's basic profit attributable to shareholders for the year ended June 30, 2023, was HKD 23.885 billion, down from HKD 28.72 billion the previous year, representing a decrease of approximately 17.5%[2] - The basic earnings per share decreased to HKD 8.24 from HKD 9.91, reflecting the decline in property sales profits[2] - The group reported a revenue of HKD 71,195 million for the year ended June 30, 2023, compared to HKD 77,747 million in the previous year, reflecting a decrease of approximately 8.5%[38] - The net profit for the year was HKD 24,575 million, down from HKD 26,131 million in the prior year, representing a decline of about 5.9%[39] - Basic and diluted earnings per share were HKD 8.25 for the current year, compared to HKD 8.82 in the previous year, indicating a decrease of approximately 6.5%[38] - The group reported a significant other comprehensive loss of HKD 9,572 million for the year, compared to HKD 3,104 million in the previous year, primarily due to foreign exchange differences[39] - The fair value changes of investment properties resulted in a loss of HKD 3,145 million, compared to a loss of HKD 3,033 million in the previous year[38] Property Sales and Revenue - The profit from property sales was HKD 11.299 billion, down from HKD 15.847 billion the previous year, indicating a decline of approximately 29.1%[4] - Property sales in Hong Kong generated revenue of HKD 23,853 million, contributing to a profit of HKD 8,467 million[43] - Hong Kong property sales revenue decreased by 27% to HKD 23.86 billion, with a significant drop in residential unit deliveries[62] - Mainland property sales revenue increased by 108% to HKD 5.25 billion, driven by higher sales deliveries[62] - The group has unrecognized contract property sales revenue of HKD 32.4 billion, with HKD 28 billion expected to be recognized in the next fiscal year[62] Rental Income and Property Management - Total rental income for the year decreased by 2% to HKD 24.322 billion, while net rental income fell by 4% to HKD 18.461 billion[5] - Total rental income in Hong Kong increased by 1% year-on-year to HKD 17.73 billion, maintaining a healthy overall occupancy rate of 95%[11] - The group’s office properties achieved an average occupancy rate of approximately 92%, reflecting satisfactory performance despite a challenging operating environment[12] - The group’s investment properties continue to generate substantial recurring income, contributing to overall financial stability[11] - The average rental rate for the group’s office properties in Kowloon East remains satisfactory despite intense competition[13] Dividends and Financial Policy - The company plans to maintain its dividend policy, distributing 40% to 50% of its basic profit as dividends, with a final dividend of HKD 3.70 per share[3] - The interim dividend declared was HKD 1.25 per share, consistent with the previous year, totaling HKD 3.622 billion[53] - The proposed final dividend is HKD 3.70 per share, totaling HKD 10.722 billion, unchanged from the previous year[53] Land Reserves and Development Projects - The company added three commercial land reserves, totaling approximately 2.3 million square feet, with a significant project in Mong Kok expected to be completed by the end of 2030[6] - Approximately 5.58 million square feet of land reserves are held in Hong Kong, with 3.64 million square feet being diversified completed properties[7] - As of June 30, 2023, the group's land reserves in mainland China amounted to approximately 6.75 million square feet, with about 4.71 million square feet under development[15] - The group anticipates the opening of several new properties, including TOWNPLACE WEST KOWLOON in Q4 2023 and expansions in Yuen Long and Shanghai ITC by 2024, which will enhance recurring income[34] Sustainability and Innovation - The company aims to integrate technology and natural elements into its projects to meet customer demands for smart homes and healthy living[8] - The group has achieved LEED Platinum certification for its International Finance Centre and headquarters, reflecting its commitment to high standards in green building[12] - The group has set a ten-year environmental goal and is making progress in adopting green building technologies to reduce waste and emissions[29] - NOVO LAND has become the first residential project in Hong Kong to receive three international health building certifications[29] - The group is developing one of Hong Kong's largest solar power networks, including the first solar power plant located in a landfill area[29] Financial Health and Debt Management - The group maintained a strong financial policy, receiving credit ratings of A1 and A+ from Moody's and S&P, respectively, both with stable outlooks[25] - The group achieved a five-year syndicated loan amounting to HKD 27.5 billion, the largest in its history, in May 2023[26] - The group’s net debt as of June 30, 2023, was HKD 109.773 billion, with a debt-to-equity ratio of 18.2%[66] - Interest coverage ratio decreased to 6.8 times from 12.8 times last year, reflecting higher net financial expenses[67] - The group’s debt composition indicates that 85% is denominated in HKD, 14% in RMB, and 1% in GBP as of June 30, 2023[71] Market Outlook and Strategic Initiatives - The group is focusing on high-selectivity investment strategies, concentrating on core areas in first-tier and major second-tier cities in mainland China[15] - The group is optimistic about the prospects in Hong Kong and mainland China, planning to invest in major cities in both regions[34] - The group plans to launch several residential projects in Hong Kong and mainland China, including developments in Yuen Long and Shanghai[33] - The group continues to enhance its ESG standards and was included in the "S&P Global Sustainability Yearbook 2023"[28] Employee and Governance - The total employee compensation for the year is approximately HKD 14.164 billion, with over 40,000 employees as of June 30, 2023[79] - The financial statements for the year have been reviewed by the Audit and Risk Management Committee and audited by Deloitte, with an unqualified opinion issued[84] - The company has complied with the corporate governance code as per the listing rules, although the roles of Chairman and CEO are not separated[85]