Hongkong Land Holdings (H78) H1 2024 earnings summary

Executive summary

• Initiated a comprehensive strategic review, the first in 135 years, to optimize operations and set long-term goals, with results to be shared by year-end.

• Reported an underlying loss of US$7 million for H1 2024, mainly due to non-cash provisions in China Development Properties; excluding provisions, underlying profit was US$288 million, down 32% year-over-year.

• Core office portfolios in Hong Kong and Singapore outperformed markets, with Hong Kong office vacancy at 7.3% vs. market's 12.1% and Singapore effectively fully occupied.

• Announced Tomorrow's CENTRAL, a US$1 billion strategic investment in Hong Kong luxury retail, with US$400 million from the company and US$600 million from partners, to be executed over three years.

• Opened The Ring, Chengdu, and expanded retail footprint in China, with strong tenant sales growth in Chongqing and Beijing.

Financial highlights

• Underlying loss of US$7 million in H1 2024, mainly due to China provision; excluding this, underlying profit was US$288 million.

• Loss attributable to shareholders was US$833 million, including US$826 million net loss from investment property revaluations.

• Interim dividend maintained at US$6.00 per share.

• Net debt stable at US$5.4 billion; net gearing at 18%; NAV per share declined to US$13.82, down from end-2023.

• Recurring rental income remains resilient; attributable gross rental income at US$1,306 million for H1 2024.

Outlook and guidance

• Operating conditions expected to remain challenging for the rest of 2024.

• Hong Kong office demand to stay weak; negative rent reversions to persist but moderate into 2025.

• LANDMARK retail expected to remain resilient; Singapore office to maintain low vacancies despite muted demand.

• Focus on capital recycling in China residential, with contributions expected to rise in H2 as projects are handed over.

• Full-year underlying profits expected to be significantly below 2023 due to non-cash provisions.