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HONGKONG Land, which operates in both Hong Kong and Singapore, saw a net loss of US$402 million for the first half of 2009 due to revaluation adjustments compared with a profit of US$1.6 billion in H1 2008.
Loss per share for the six months ended June 30 was 17.89 US cents, against earnings per share of 70.95 US cents for the first half of 2008
Revenue in H1 2008 was US$521.5 million, up from US$319.2 million. The group declared an interim dividend of six US cents per share, unchanged from H1 2008.
An independent valuation of the group's commercial investment properties at the end of June 2009, including the share of properties in joint ventures, produced an 8 per cent decrease, the decline being most marked in Singapore, where values fell by 28 per cent, said HK Land, the parent of Singapore's MCL Land.
The resultant net deficit charged to the profit and loss account was US$923 million. Against that, there was a net gain of US$241 million in respect of investment properties under development, which accounting standards require to be revalued for the first time.
However, higher net rental income in the first half of 2009 produced an underlying profit of US$281 million, up 16 per cent, resulting in an 18 per cent rise in underlying earnings per share to 12.47 US cents.
Despite weaker commercial property markets in both Hong Kong and Singapore, HK Land said that it continued to see reversionary increases in rental income in the first half of 2009.
The residential sector has seen some recent improvement in sentiment in most of the markets where the group is active, it added.
In Hong Kong, the challenges facing the financial services sector led to lower demand for office space in Hong Kong and resulted in reduced occupancy during the first half of 2009. Vacancy in the group's office portfolio was 5.5 per cent at the end of June. The group's retail portfolio in Central remains fully leased.
The group recorded rental income from its commercial properties of US$316 million in the first half of 2009, compared with US$251 million for the same period in 2008. Despite reduced activity in the Singapore property market, One Raffles Link, which is wholly owned, and One Raffles Quay, in which HK Land holds a one-third interest, both remain fully let, HK Land said.
Construction at Marina Bay Financial Centre, in which HK Land also holds a one-third interest, is continuing on schedule for a two-phased completion in 2010 and 2012.
Over 60 per cent of the office space in the two phases remains pre-leased at the end of June 2009. The residential tower in the first phase of Marina Bay Financial Centre is fully pre-sold and on schedule for completion in 2010.
Net debt at end June 2009 was US$2.6 billion. The group's liquidity continues to be strong with US$2.3 billion of cash on deposit and undrawn committed facilities in place at the end of June.
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