HangLung Profits South on Property Revaluation
Jan 28th, 2016
Hang Lung Group, one of Hong Kong's leading real estate congolomerates, reported net profit attributable to shareholders in the financial year of 2015 decreased 53 percent to HKD 2.7 billion (USD347million) from the previous financial year, on smaller revaluation gain on investment properties against a year ago. Operating profit retreated 48 percent year on year to HKD 6.96 billion.
For the financial year ended December 31, 2015, total revenue of the group decreased by 46 percent to HKD 9.53 billion as fewer residential units were sold when compared to a year ago, total operating profit decreased correspondingly. Hang Lung Group, which owns Hong Kong's highest mall on the island's peak, recorded earnings per share HKD 2.37 for the latest financial year. HangLung's board of directors proposed HK61 cents per share cash dividend for the final dividend for shareholders.
By business segment breakdown, the group's leasing property business made profit growth. Total revenue of property leasing and profit increased by 7 percent and 2 percent. HangLung said mainland China leasing portfolio accounted for 56 percent of the group’s total leasing revenue and 49 percent of the leasing operating profit, respectively.
On reporting the company's annual result today, HangLung Group chairman Ronnie Chan said due to fewer units launched in 2015, revenue from property sales decreased 88 percent in the year to HKD1.19 billion. Overall profit margin realized was 71 percent.
The company has one of the lowest gearing ratios among industry peers in the region. Net debt to equity ratio was 1.1 percent for 2015, in 2014 it had zero debt with net cash. Debt to equity ratio stood at 24.3percent for 2015 down from 25.2percent in 2014.
"The market conditions on mainland China and Hong Kong will remain very challenging in 2016", said Chan, adding the group will sell some of the residential units on hand when the residential market conditions are favorable in the new year.