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Henderson Land posts 28pc rise in profit

Developer expected to do well in the short term, but years ahead are clouded with uncertainty

Henderson Land Development posted a 28 per cent increase in its underlying profit to HK$7.1 billion for last year, in line with market expectations.

Analysts expect to see a positive result in 2013 but the earnings in coming years are subject to the outlook of the property sector, which has been clouded by policy uncertainties.

Including gains in the fair value of investment properties, Henderson’s reported profit attributable to equity shareholders was HK$20.21 billion, representing an increase of 17.6 per cent over HK$17.18 billion in 2011. Reported earnings per share were HK$8.47.

Directors recommended the payment of a final dividend of 74 HK cents a share. Including the interim dividend of 32 HK cents a share already paid, the total dividend for the year to December 31 will amount to HK$1.06 per share, up from 2011’s HK$1 per share.

Chairman Lee Shau-kee was optimistic about the company’s outlook in 2013.
« Both Double Cove Phase 1 [development] in Ma On Shan and The Reach in Yuen Long, with the attributable sales revenue totalling HK$6.66 billion by the end of February 2013, are set to be recognised in the accounts in 2013, » Lee said.

Looking ahead, Henderson said it plans to launch 10 projects for sale. Together with the remaining unsold units from the major developments, a total of about 2.27 million square feet of space will be ready for sale in 2013.

Adrian Ngan Wai-hung, an executive director of Citic Securities’ real estate equity research department, agreed that the company’s earnings this year were secure.
Nomura Equity Research said earlier this month that Henderson Land has been aggressively building up its Hong Kong development land bank through acquisition and redevelopment of old buildings. But there has been discussion that the government may begin to regulate the presales of such buildings. This could push back the presales timing for some of Henderson’s projects, it has said.

On the mainland, Henderson sold and pre-sold an attributable HK$6.55 billion worth of properties during the year under review, a significant increase of 244 per cent over the previous year. The company said it expected more mainland units would be sold this year.

Henderson Land said the firm’s book value amounted to HK$84.97 per share, in contrast to yesterday’s closing price of HK$50.

Meanwhile, Henderson Land’s subsidiary Henderson Investment said its net profit for the year fell 77 per cent to HK$25 million because, commencing from March last year, the payment of toll fees for a Hangzhou bridge to its joint venture company was provisionally suspended.

Peggy Sito

The South China Morning Post, Mar 26, 2013