WHARF REIC(01997)2024-08-06 04:11Financial Performance - Basic net profit increased by 2% to HKD 3.123 billion (2023: HKD 3.059 billion)[3] - Group recorded a loss of HKD 1.052 billion due to non-cash investment property revaluation impairment of HKD 4.426 billion (2023: HKD 1.133 billion)[3] - Shareholders' loss was HKD 1.052 billion, with basic loss per share of HKD 0.35 (2023: profit of HKD 1.805 billion and earnings per share of HKD 0.59)[16] - Underlying net profit increased by 2% to HKD 3.123 billion (2023: HKD 3.059 billion), with underlying earnings per share of HKD 1.03 (2023: HKD 1.01)[16] - Revenue for the six months ended June 30, 2024, was HKD 6.501 billion, a slight increase from HKD 6.473 billion in the same period in 2023[30] - Operating profit before depreciation, amortization, interest, and taxes was HKD 5.035 billion, down from HKD 5.065 billion in 2023[30] - Net loss for the period was HKD 1.067 billion, compared to a net profit of HKD 1.780 billion in 2023[30] - Group total revenue for 2024 was HKD 6,501 million, compared to HKD 6,473 million in 2023[38] - Operating profit for 2024 was HKD 4,673 million, slightly up from HKD 4,671 million in 2023[38] - Basic loss per share for 2024 was HKD 1,052 million, compared to a profit of HKD 1,805 million in 2023[44] Dividend and Shareholder Information - First interim dividend of HKD 0.64 per share (2023: HKD 0.67 per share) with a total distribution of HKD 1.943 billion (2023: HKD 2.034 billion)[4] - Interim dividend ex-date set for August 23, 2024[50] - Deadline for submitting share transfer documents for the interim dividend is August 26, 2024, at 4:30 PM[50] - Record date and time for the interim dividend is August 26, 2024, at 6:00 PM[50] - Interim dividend payment date is September 10, 2024[50] - Shareholders must submit transfer documents and relevant share certificates to the company's Hong Kong share registrar by August 26, 2024, at 4:30 PM to receive the interim dividend[50] - First interim dividend for 2024 was HKD 0.64 per share, totaling HKD 1,943 million, down from HKD 0.67 per share and HKD 2,034 million in 2023[45] Investment Properties - Investment property revenue increased by 2% to HKD 5.542 billion (2023: HKD 5.455 billion), with operating profit up 1% to HKD 4.718 billion (2023: HKD 4.677 billion)[12] - Investment properties recorded a 2% revaluation impairment, with a net unrealized revaluation impairment of HKD 4.426 billion (2023: HKD 1.133 billion)[13] - Investment properties totaled HKD 223 billion, accounting for 94% of operating assets (2023: HKD 227.6 billion and 93%)[19] - Investment properties in Hong Kong accounted for HKD 583 million of the total capital expenditure[28] - Investment properties revenue increased to HKD 5,542 million in H1 2024, up from HKD 5,455 million in H1 2023[35] Retail and Office Market Performance - Overall retail sales in Q2 experienced a double-digit sharp decline[5] - Harbour City's overall revenue (including hotels) increased by 5%, with operating profit up 3%[6] - Office rental market remains weak with a June-end occupancy rate of 88% and a 5% decline in operating profit[7] - Times Square's shopping mall revenue increased by 4% and operating profit rose by 6%, with an end-period occupancy rate of 94%[9] Hotel Industry Performance - Hotel industry faces challenges with intense competition and pressure on room rates, though Marco Polo hotels maintained stable occupancy rates[8] - Hotel revenue rose to HKD 748 million in H1 2024 compared to HKD 697 million in H1 2023[35] Financial Expenses and Borrowing - Financial expenses amounted to HKD 882 million, including unrealized gains of HKD 189 million from cross-currency and interest rate swaps[15] - Actual borrowing interest rate increased to 5.7% (2023: 4.7%) due to rising Hong Kong Interbank Offered Rate[15] - Total interest expense for 2024 was HKD 1,042 million, up from HKD 1,031 million in 2023[41] Assets and Liabilities - Total assets reached HKD 238.9 billion, with 95% located in Hong Kong (2023: HKD 245.3 billion)[18] - Net debt decreased by HKD 1.2 billion to HKD 35.1 billion (2023: HKD 36.3 billion), with net debt to total equity ratio declining to 18.3% (2023: 18.6%)[23][24] - Total assets as of June 30, 2024, were HKD 238.942 billion, down from HKD 245.322 billion at the end of 2023[32] - Total liabilities decreased to HKD 47.370 billion from HKD 49.715 billion at the end of 2023[32] - Net assets stood at HKD 191.572 billion, down from HKD 195.607 billion at the end of 2023[32] Revenue Breakdown - Fixed rental income grew to HKD 4,352 million in H1 2024 from HKD 4,218 million in H1 2023[36] - Variable rental income decreased to HKD 454 million in H1 2024 from HKD 542 million in H1 2023[36] - Management and service income increased to HKD 607 million in H1 2024 from HKD 586 million in H1 2023[36] - Other rental-related income rose to HKD 106 million in H1 2024 from HKD 93 million in H1 2023[36] - Total revenue from operations under HKFRS 15 increased to HKD 1,469 million in H1 2024 from HKD 1,398 million in H1 2023[36] - Hong Kong region revenue for 2024 reached HKD 6,194 million, a slight increase from HKD 6,050 million in 2023[38] Corporate Governance and Board Structure - The company deviated from the Corporate Governance Code by having the same individual serve as both Chairman and CEO, which is deemed appropriate for long-term strategy planning and execution[49] - The Board of Directors consists of 4 executive members and 8 independent non-executive directors[50] Other Financial Information - Total committed and uncommitted credit facilities and issued debt securities amounted to HKD 50 billion, with HKD 36 billion utilized[25] - Operating cash inflow was HKD 4.9 billion (2023: HKD 4.8 billion), mainly from rental income, with net cash inflow from operating activities of HKD 3.3 billion (2023: HKD 3.2 billion)[27] - Total estimated capital expenditure for the coming years is HKD 1.1 billion, with HKD 231 million already committed[28] - Development properties revenue significantly decreased to HKD 8 million in H1 2024 from HKD 22 million in H1 2023[35] - Investment revenue dropped to HKD 140 million in H1 2024 from HKD 244 million in H1 2023[35] - Total depreciation and amortization for 2024 was HKD 120 million, down from HKD 125 million in 2023[39] - Employee costs increased to HKD 533 million in 2024 from HKD 476 million in 2023[39] - Other income net for 2024 was HKD 70 million, a significant improvement from a loss of HKD 282 million in 2023[40] - Tax expense for 2024 was HKD 607 million, down from HKD 627 million in 2023[42] - The company employed approximately 2,900 people as of June 30, 2024[29] - No purchase, sale, or redemption of any listed securities by the company or its subsidiaries during the financial period[50]