Hongkong Land Holdings (H78) H1 2025 earnings summary

Executive summary

• Achieved $1.3 billion in capital recycling, reaching 33% of the $4 billion 2027 target, including a landmark transaction with the Hong Kong Stock Exchange.

• Underlying profit excluding China provisions rose 11% year-on-year to $320 million, with underlying EPS up 12% to $14.56, driven by higher contributions from Singapore build-to-sell projects.

• Interim dividend maintained at $0.06 per share, with a strong commitment to mid-single-digit annual growth in DPS.

• Net debt reduced by $0.2 billion to $4.9 billion, with net gearing at 17%.

• Share buyback program of $200 million is underway, with over 67% executed by June 2025.

Financial highlights

• Underlying EPS increased 12% year-on-year to $14.56, benefiting from share buybacks.

• Net asset value per share increased to $13.62, the first rise since 2018.

• Gross rental income declined 6% year-on-year to $652 million, mainly due to lower Hong Kong contributions.

• Operating profits from prime property investments decreased by $57 million year-on-year due to negative rent reversions and renovations.

• Profit attributable to shareholders was $221 million, reversing a loss of $833 million in the prior year.

Outlook and guidance

• Expect further stabilization in Hong Kong office market, with negative rental reversions narrowing in the second half of the year.

• Singapore office market outlook remains robust, with positive rent reversions anticipated due to limited supply.

• Cautious on short-term outlook in China; focus remains on West Bund, monetization of build-to-sell, and active management of lifestyle retail pipeline.

• Commitment to deliver mid-single-digit growth in full-year DPS and double dividends by 2035.

• Full-year underlying profits expected to be higher than 2024, but trading performance (excluding provisions) to be lower.