长实集团(01113) - 2023 - 中期财报

Financial Performance - Shareholders' profit attributable to the company for the first half of 2023 was HK$10.331 billion, a decrease of 4.0$2.88, down 4.0% from the same period in 2022[9][11] - The company declared an interim dividend of HK$0.43 per share for 2023, unchanged from 2022[9][12] - Property sales revenue for the first half of 2023 was HK$8.246 billion, a significant decrease from HK$20.397 billion in 2022, with Hong Kong contributing HK$4.316 billion, mainland China HK$3.542 billion, and overseas HK$388 million[26] - The group's revenue for the first half of 2023 was HK$3.53 billion, down from HK$8.054 billion in 2022, with Hong Kong contributing HK$1.666 billion, mainland China HK$1.677 billion, and overseas HK$187 million[27] - Property rental income for the first half of 2023 was HK$2.862 billion, slightly down from HK$2.993 billion in 2022, with retail contributing HK$1.051 billion, office HK$964 million, industrial HK$385 million, and other properties HK$462 million[31] - Group revenue for the first half of 2023 was HKD 24,605 million, a decrease from HKD 35,715 million in the same period in 2022[118] - Profit attributable to shareholders for the first half of 2023 was HKD 10,331 million, compared to HKD 12,936 million in the same period in 2022[118] - Earnings per share for the first half of 2023 was HKD 2.88, down from HKD 3.55 in the same period in 2022[118] - Total comprehensive income for the first half of 2023 was HKD 11,808 million, slightly higher than HKD 11,627 million in the same period in 2022[119] - Non-current assets increased to HKD 313,460 million as of June 30, 2023, compared to HKD 304,942 million as of December 31, 2022[120] - Current assets decreased to HKD 190,515 million as of June 30, 2023, from HKD 209,879 million as of December 31, 2022[120] - Net current assets were HKD 144,075 million as of June 30, 2023, down from HKD 154,899 million as of December 31, 2022[120] - Total equity increased to HKD 397,327 million as of June 30, 2023, compared to HKD 393,707 million as of December 31, 2022[120] - The company repurchased and canceled issued shares worth HKD 1,362 million during the first half of 2023[121] - The company declared a final dividend of HKD 1.85 per share for 2022, totaling HKD 6,644 million[121] - Total reserves increased from HKD 128,609 million in 2022 to HKD 144,700 million in 2023, driven by retained earnings growth[122] - Net cash outflow from operating activities was HKD 3,634 million in 2023, compared to a net inflow of HKD 8,123 million in 2022[123] - Cash and cash equivalents decreased by HKD 12,872 million in 2023, ending at HKD 43,518 million[123] - Property sales revenue declined by 59.5$14.822 billion, with HK$4.416 billion expected to be recognized in 2023 and HK$10.406 billion thereafter[29] - The group's land bank for development as of mid-2023 was approximately 76 million square feet, with 8 million square feet in Hong Kong, 64 million square feet in mainland China, and 4 million square feet overseas[30] - The group terminated a sale agreement for the 21 BORRETT ROAD development project, resulting in the forfeiture of a HK$2.077 billion deposit, which will be recognized in the second half of 2023[25] - Property development risks include rising construction costs, labor shortages, material price surges, and delays in project completion, which could impact profitability and operational timelines[102] - The company may face penalties or restrictions if it fails to comply with land use contracts, including delays in property project completion or potential land reclamation by authorities[103] - Property investments are illiquid, which may limit the company's ability to sell properties quickly to raise cash[102] - Changes in environmental laws, zoning regulations, and government policies could affect property values and rental income[102] Property Leasing and Investment - Property leasing revenue declined compared to the same period in 2022, but the company remains confident in the prospects of Grade A office buildings. The completion of Cheung Kong Center II in Central is expected by the end of 2023, which will enhance the company's investment property portfolio and asset value[15] - The group's investment property portfolio as of mid-2023 was approximately 17.1 million square feet, with Hong Kong accounting for 1.937 million square feet, mainland China 172 million square feet, and overseas 207 million square feet[33] - The group's Cheung Kong Center II, a premium office development in Central, is expected to be completed by the end of 2023, contributing to future rental income[34] - The fair value of investment properties increased by HKD 2.69 billion, including a HKD 1.691 billion increase from the redevelopment of Cheung Kong Center Phase II[35] - The company is exposed to potential public liability claims and insurance risks, as insurance coverage may not fully compensate for losses due to property damage or other unforeseen events[103] Acquisitions and Investments - The company fully acquired UK-listed real estate investment trust Civitas, which specializes in providing supported housing and care homes. The acquisition is expected to provide immediate rental income in the second half of the year[15] - The group's subsidiary made a recommended cash offer to acquire Civitas Social Housing PLC for approximately £485 million (equivalent to HK$4.811 billion), with the offer becoming unconditional on June 23, 2023[24] - The group successfully acquired over 96% of Civitas Social Housing PLC's issued shares, expanding its investment property portfolio and providing immediate rental income[36] - The company continues to focus on acquiring high-quality infrastructure and utility assets globally, aiming to build a robust portfolio that generates stable recurring income[18] - The company is actively seeking new investment opportunities globally to enhance cash flow quality and strengthen its fixed income base, but faces challenges such as increased competition and uncertainties in new industries and markets[113] - Acquisitions, especially in overseas markets, are subject to regulatory approvals and may face delays or complex conditions, particularly for sensitive infrastructure assets like power grids and gas networks[114] - The company operates through joint ventures and strategic alliances, which may be affected by inconsistent economic or business interests, changes in equity control, or financial difficulties of partners[115] - Transactions with related parties, such as CK Hutchison Holdings Limited, are subject to strict regulatory requirements, including independent shareholder approval, which may introduce unpredictability and risks[116] Hotel and Serviced Suite Business - Hotel and serviced suite business saw an increase in revenue compared to the same period in 2022, driven by improved occupancy rates and flexible market strategies targeting both short-term and long-term guests[16] - Hotel and serviced suite business revenue increased by HKD 417 million to HKD 1.95 billion, with average occupancy rates rising from 58% to 75%[37] - The newly opened Metropolis Harbourview Hotel and Metropolis Harbourview Apartments in Shanghai have not yet contributed to the group's profit[38] - Hotel industry recovery depends on global economy, tourism recovery, and consumer confidence, with potential significant adverse impacts on the company's business, financial condition, and operational performance[104] UK Pub Business - UK pub business revenue decreased compared to the same period in 2022 due to inflationary pressures on energy, food, and labor costs, despite a year-on-year increase in income[17] - The UK pub business, Greene King, has set a short-term science-based emissions reduction target approved by SBTi, aiming to reduce greenhouse gas emissions by 50% by 2030 compared to 2019 levels[19] - The UK pub industry faces risks from potential new COVID-19 variants, inflation, rising energy and labor costs, and the ongoing Russia-Ukraine conflict, which could negatively impact consumer confidence and discretionary spending[105] - The company's supply chain for its UK pub business relies on key suppliers and distributors, and disruptions due to pandemics, sanctions, or strikes could lead to revenue losses and increased costs[107] - Rising operational costs, including energy, food prices, and wages, are pressuring the company's managed pubs, potentially reducing revenue and profitability[108] - Non-compliance with health, safety, and employment regulations could result in fines, reputational damage, and challenges in recruiting skilled employees[109] Infrastructure and Utility Assets - Infrastructure and utility assets business remained stable, with contributions of HKD 645 million from CK William, HKD 678 million from Reliance Home Comfort, and HKD 846 million from ista. Other infrastructure and utility assets contributed HKD 1.839 billion[18] - The company's infrastructure investments face regulatory challenges, including lower permitted profits, energy price caps, and potential reputational risks from non-compliance with community expectations[110] - The company faces significant risks from potential service interruptions in its utility investment projects due to natural disasters, terrorist attacks, or other unforeseen events, which could lead to substantial cash losses and repair costs[111] Corporate Governance and Shareholding - The company's Board of Directors consists of 15 members, including 7 executive directors and 8 independent non-executive directors, with over one-third being independent non-executive directors[76] - The Chairman and Managing Director roles are both held by Mr. Li Ka-shing, and the Board believes this arrangement is in the best interest of shareholders[75] - The company has adopted and regularly reviews comprehensive corporate governance policies, including anti-fraud, anti-bribery, and anti-money laundering policies[75] - The Audit Committee, led by an independent non-executive director, reviewed the effectiveness of the Group's risk management and internal control systems for the six months ended June 30, 2023[78] - The company has established an internal audit mechanism to independently assess the Group's risk management and internal control systems, focusing on financial, operational, and compliance controls[78] - The Remuneration Committee, chaired by an independent non-executive director, is responsible for recommending the remuneration policy and structure for directors and senior management[80] - The Nomination Committee, chaired by an independent non-executive director, reviews the Board's structure, size, diversity, and the independence of independent non-executive directors[81] - The company has adopted a standard code for securities transactions by directors, which is reviewed and revised periodically to reflect changes in the Listing Rules[77] - The Board has established written guidelines for employees' securities transactions, which are in line with the standard code for directors[77] - The company has implemented policies for handling confidential information, disclosure, and securities trading, applicable to employees in possession of confidential or insider information[77] - Li Ka-shing holds a total of 1,697,789,393 shares in the company, representing approximately 47.25% of the total equity[66] - Li Ka-shing's shareholding includes 368,467,448 shares held by companies controlled by him and 1,328,696,745 shares held by trusts associated with him[66][68] - The Li Ka Shing Foundation holds 366,195,098 shares, which are part of Li Ka-shing's total shareholding[68] - Li Ka-shing's shareholding in associated companies includes 15 shares in Precise Result Global Limited (15% equity), 2,000 shares in Jabrin Limited (20% equity), and 168,375 shares in Mightycity Company Limited (1.53% equity)[67] - Other directors hold significantly smaller stakes, with the highest being 600,000 shares (0.01% equity) held by Ye Tak-chuen[66] - Li Ka-Shing Unity Trustee Company Limited holds 1,171,881,779 shares, representing 32.61% of the company's equity[73] - Li Ka-Shing Unity Trustee Corporation Limited holds 1,171,881,779 shares, representing 32.61% of the company's equity[73] - Li Ka-Shing Unity Trustcorp Limited holds 1,171,881,779 shares, representing 32.61% of the company's equity[73] - Li Ka-Shing holds 1,694,891,843 shares, representing 47.17% of the company's equity[73] - Li Ka-Shing Foundation Limited holds 366,195,098 shares, representing 10.19% of the company's equity[73] - TUT1 holds 913,378,704 shares as trustee of UT1[74] - TUT1 controls 258,503,075 shares through related companies[74] - Li Ka-Shing Castle Trustee Company Limited holds 72,387,720 shares as trustee of UT3[69] - TDT3 holds 84,427,246 shares as trustee of DT3[70] - The total issued share capital of the company is 3,592,671,333 shares as of June 30, 2023[74] Risks and Challenges - The company's business, financial condition, and operational performance may be affected by risks such as global economic slowdown, trade protectionism, and supply chain disruptions[87] - The company operates in multiple regions, including Hong Kong, Mainland China, Singapore, Europe, Australia, Canada, and the UK, making it susceptible to adverse economic, social, and political factors in these regions[87] - The ongoing impact of COVID-19 and potential future outbreaks of highly infectious diseases could adversely affect the company's business and operational performance[88] - Rising inflation and interest rate hikes by central banks globally may impact the company's business due to changes in total demand across industries[89] - The company's regulated businesses are subject to local interest rates when calculating regulated capital costs, which could affect allowable returns[90] - Financial market volatility may negatively impact the company's financial and treasury income[90] - The UK's exit from the EU has introduced significant uncertainties, potentially impacting trade intensity, labor supply, supply chains, and currency exchange rates, which may affect the company's business, asset values, and profitability in the UK[91] - The company faces potential currency fluctuation risks due to its multinational operations, with subsidiaries, associates, and joint ventures using various currencies, which could impact financial conditions and operational performance[92] - The company is exposed to risks from local, national, and international regulations, including political, social, legal, tax, and environmental changes, which could lead to increased operational and capital expenditures and reduced investment returns[93] - Economic sanctions imposed by governments and international organizations could disrupt the company's operations, supply chains, and partnerships, potentially leading to financial losses and operational challenges[94] - The company is subject to