Pacific Century Premium Developments (432) H1 2024 earnings summary

Executive summary

• Consolidated revenue rose 21% year-over-year to HK$545 million for the six months ended June 30, 2024, driven by strong hotel and recreational operations in Japan.

• Operating profit reached HK$49 million, reversing an operating loss of HK$21 million in the prior year period.

• Net loss attributable to equity holders narrowed to HK$153 million from HK$221 million year-over-year; basic loss per share improved to 7.52 HK cents from 10.85 HK cents.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit increased 26% to HK$385 million, with gross margin improving to 71% from 68% year-over-year.

• Finance costs decreased to HK$170 million from HK$183 million, mainly due to lower costs after settling 4.75% guaranteed notes in 2023.

• Cash and cash equivalents stood at HK$544 million as of June 30, 2024, down from HK$865 million at year-end 2023.

• Net cash used in operating activities was HK$78 million, compared to net cash generated of HK$39 million in the prior year period.

• General and administrative expenses rose 3% to HK$337 million.

Outlook and guidance

• Management remains cautiously optimistic for the remainder of 2024, expecting continued strong performance from hotel and leisure operations in Japan.

• Plans to launch targeted sales and promotional initiatives across markets to attract high-quality travelers, tenants, and buyers.

• Cautious optimism for property sectors in Hong Kong, Japan, Thailand, and Indonesia, with strategies to maximize returns and mitigate risks.

• Vigilance maintained regarding external risks, including potential US Federal Reserve rate cuts and ongoing geopolitical tensions.