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HONG KONG, Sept 8, 2009 - (ACN Newswire) - Kowloon Development Company Limited ("Kowloon Development" or "the Group"; stock code: 34) today announces its unaudited interim results for the six months ended 30 June 2009 (the "Review Period"). Driven by promising revenue from Hong Kong and Macau properties, the Group's net profit attributable to shareholders rose 3.9% to HK$887 million. Excluding revaluation adjustments on the investment property portfolio net of deferred tax, the underlying net profit surged over 84% to HK$883 million. The underlying earnings per share was HK$0.77.
The Board of Directors has declared the payment of an interim dividend for the six months ended 30 June 2009 of HK$0.20 per share (2008: HK$0.19 per share), up by 5% as compared to the same period last year.
Financial Highlights (For the six months ended 30 June 2009)
(HK$ million)
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2009 2008 Change
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Net profit attributable to shareholders 887 854 +4%
Net profit - Excluding property revaluations 883 479 +84%
EPS (HK$) 0.77 0.74 +4%
EPS - Excluding property revaluations (HK$) 0.77 0.42 +84%
Interim dividend per share (HK$) 0.20 0.19 +5%
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During the Review Period, the Group has committed to enhance its core property business in Hong Kong, Macau and Mainland China. The Group has almost sold out all luxury residential units at 31 Robinson Road, Mid-levels of Hong Kong, with a total property sales increased 18.9% y-o-y to HK$463 million, reflecting continuous strong market demand for luxury properties. The said project together with the final income distribution received from the Group's co-investment Villa de Mer in Macau were the profit growth drivers of the Group during the Review Period. The Villa de Mer project has contributed a net profit of HK$821 million to the Group in the past two years.
Polytec Asset Holdings Limited ("Polytec Asset"; stock code: 208), a listed subsidiary and 73.44% owned by the Group, holds the project of Villa de Mer. During the Review Period, Polytec Asset brought in a net profit of HK$514 million for Kowloon Development, representing a 282% increase y-o-y.
Mr Or Wai Sheun, Chairman of Kowloon Development, said, "Since 2H 2008, economic activities were severely affected by financial tsunami, credit tightening and the spread of new influenza. However, during the Review Period, the world's major economic countries have jointly carried out the quantitative easing policies and aggressive fiscal expansion; armed with low interest rate in Great China region and rising inflation expectations, together with a concern of wealth preservation, affluent homebuyers and investors in Hong Kong, Macau and Mainland China become active in purchasing properties, which fuel the property demand, resulting in a rebound in the transaction volume and selling price for property market since 2Q 2009 in the Greater China region."
During the Review Period, the gross rental income generated from the Group's property investment portfolio, recorded a 5.9% increase y-o-y to HK$135 million, despite facing the negative market sentiment, leading to a drop in rents of all kind of properties. Pioneer Centre, the Group's flagship investment property, is situated in prime location of Mongkok and recorded almost full occupancy. Together with increased rental rates, the total rental income reached HK$108 million.
Despite global economy has severely affected by financial tsunami, the Group's financial investment portfolio has returned to black and recorded a total operating profit of HK$109 million, while the investment portfolio has significantly decreased by 53.4% to HK$110 million. There are only two forward agreements remaining with an insignificant maximum commitments of HK$69 million, which will be expired in September.
As at the interim end, Kowloon Development's land bank for development was approximately 4.4 million m2 of attributable GFA (refer to appendix for details).
As of 30 June 2009, the gearing ratio of Kowloon Development was 28.3% while cash and cash equivalents amounted to HK$600 million. In April 2009, the proposed acquisition of Shenzhen Properties & Resources Development (Group) Limited was terminated, bringing in a total cash inflow of approximately HK$276 million to Kowloon Development. In July, the Group has announced to sell a 12% interest of the Tianjin Project to a project partner and would receive a total proceeds of approximately HK$308 million upon completion of the disposal. These moves enable Kowloon Development to enhance its cash position.
In mid of August, the Group has announced to acquire two property development projects, "Mount East" located in Ming Yuen Western Street, North Point of Hong Kong and Hun Nan Xin District of Shenyang, from its parent company at discounts. Of the aggregate consideration of HK$857 million, approximately 90% can be settled by the first anniversary of completion with no interest cost. The terms of the acquisition are favorable to the Group. The above two projects are expected to generate solid revenue for the Group in 2010-2011.
Mr Or concluded, "Global economic downturn has eased, Mainland China has even moved back to the track of economic growth. In addition, the property market was fuelled by the exceptionally low interest rate environment together with the inflation fears resulting from easing monetary policy. Thus, the Group remains cautiously optimistic about the future prospects of property market in Greater China region. Upon the completion of acquiring the projects of "Mount East" in Hong Kong and Hun Nan Xin District of Shenyang, it is expected to expand the Group's development project portfolio and bring in solid revenue. Barring unforeseen circumstances, the Group is expected to deliver satisfactory results for the full year of 2009."
Contact:
Quam IR
Ms Anita Wan
Tel: +852 2217 2687
E-mail: anita.wan@quamgroup.com
Ms Sharon Au
Tel: +852 2217 2680
E-mail: sharon.au@quamgroup.com
Topic: Earnings
Source: Kowloon Development Company
Sectors: Real Estate & REIT
https://www.acnnewswire.com
From the Asia Corporate News Network
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