Hongkong Land has reported earnings of US$221 million for 1HFY2025 ended June, reversing from the year-earlier loss of US$833 million.
Underlying earnings attributable to shareholders, which the company says is a more accurate measure of its ongoing business performance, was US$297 million in the same period, versus marginal red ink of US$7 million.
The company's bottom line was weighed down by provisions made for its businesses in China. If excluded, Hongkong Land's underlying profit would be US$320 million, up 11% y-o-y.
Thanks to consistent share buybacks, a well as stable valuation of its "prime" properties in Hong Kong, the company's net asset value as at June 30 was US$13.62, up from US$13.57 - reversing a downward trend since 2018.
Hongkong Land plans to pay an interim dividend of 6 US cents, the same amount it paid for 1HFY2024.
CEO Michael Smith warns that results for the current 2HFY2025 will be impacted by ongoing renovations of Landmark, one of its key mixed-use properties in Hong Kong.
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Persistently soft Hong Kong office market is not helping either.
Smith warns that geopolitical uncertainties will likely to persist for the remainder of the year. Nonetheless, the company remains "firmly committed" to delivering its plan to boost value for shareholders as part of its "Strategic Vision 2035" announced last year, where, among others, it aims to double its underlying PBIT and double its dividend by 2035.
"Capital recycling continues to be prioritised to reduce net debt and increase investment capacity, with a number of significant initiatives currently underway," says Smith.
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As of June, the company has secured 33% of its US$4 billion capital recycling target via the sale of some office and retail space. The longer-term target is to recycle US$10 billion worth of assets by 2035.
"The group is also focused on the successful execution of its portfolio anchor projects in Hong Kong (Tomorrow’s CENTRAL) and Shanghai (Westbund Central),” says Smith.
As of July 28, Hongkong Land has used 67% of the US$200 million allocated for share buybacks.
Hongkong Land shares closed at US$6.39 on July 29, up 2.08% for the day and up 44.24% year to date.
