Kowloon Development Company (34) H1 2024 earnings summary

Executive summary

• Underlying profit attributable to shareholders for H1 2024 rose 0.3% year-over-year to HK$289 million, while reported profit fell 38.6% to HK$113 million due to fair value losses and market headwinds.

• Interim dividend declared at HK$0.10 per share, down from HK$0.26 in 2023, reflecting a more cautious capital return approach.

• Property sales in Hong Kong and Mainland China contributed significant cash inflows, with over 1,100 units sold at Manor Hill and RMB643 million in Mainland China presales/sales.

Financial highlights

• Revenue for H1 2024 was HK$1,940.9 million, up from HK$1,276.0 million year-over-year.

• Underlying EPS was HK$0.246 (2023: HK$0.245); reported EPS was HK$0.10 (2023: HK$0.16).

• Gross rental income from investment properties in Hong Kong was HK$148 million, with Pioneer Centre rental income down 3.3% year-over-year.

• Net cash generated from operating activities was HK$1,076 million; cash and bank balances at period end were HK$709 million.

• Profit from operations was HK$269.2 million, down from HK$313.4 million year-over-year.

Outlook and guidance

• Hong Kong property market expected to stabilize as interest rates fall and government support measures take effect.

• Major project completions and launches anticipated in 2024–2029, with new presales and ongoing sales in both Hong Kong and Mainland China, focusing on Manor Hill and High Street projects.

• Earnings contribution from Mainland China expected to remain limited due to low property prices.