Final Results

Hong Kong Land Hldgs Ld 28 February 2000 HONGKONG LAND HOLDINGS LIMITED 1999 PRELIMINARY ANNOUNCEMENT OF RESULTS * Asset values begin to recover * Negative rent reversions impact revenues * 11 Chater Road due for completion in 2002 * Good progress in letting new properties in Hong Kong and Singapore Results Year ended 31st December 1999 1998 Change US$m US$m % _______________________________________________________________ Operating profit 319 179 +78 Profit after taxation and minority interests 267 126 +112 Profit after taxation and minority interests excluding asset impairment reversals/provisions 265 370 -28 _____________________________________________________________ USc USc % _____________________________________________________________ Earnings per share 10.59 4.98 +113 Earnings per share excluding asset impairment reversals/provisions 10.48 14.65 -28 Dividends per share 9.00 9.00 - _____________________________________________________________ US$ US$ % _____________________________________________________________ Net asset value per share 2.07 2.01 +3 'The Group's strategy continues to focus on maximising the revenue from its Central portfolio in Hong Kong, developing investment and trading properties in the region, and growing its infrastructure portfolio.' Simon Keswick, Chairman 'Rent reversions were sharply negative in 1999 and this will continue through 2000, which will be reflected in further declines in average rents. A shortage of new office supply over the next two years and the resumption of growth in the Hong Kong economy encourage a more optimistic view in the medium term.' Nicholas Sallnow-Smith, Chief Executive Officer 28th February 2000 The final dividend of USc5.50 per share will be payable on 7th June 2000, subject to approval at the Annual General Meeting to be held on 31st May 2000, to shareholders on the register of members at the close of business on 24th March 2000. The ex-dividend date will be on 22nd March 2000, and the share registers will be closed from 27th to 31st March 2000, inclusive. HONGKONG LAND HOLDINGS LIMITED PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31ST DECEMBER 1999 OVERVIEW The total stock of Grade 'A' office space in Hong Kong's Central business district increased from 17m to 21m square feet between 1997 and 1999. This expansion coincided with a recession in Hong Kong's economy, leading to a sharp fall in both market rentals and capital values. By mid-1999, however, the great majority of the new space had been let, rents had stabilised and Hong Kong's economy was beginning to show signs of recovery. At the end of the year the improved outlook was reflected in modestly rising commercial property values. Business conditions have also strengthened in the other markets in which Hongkong Land operates, where the outlook for the Group's investments is continuing to improve. PERFORMANCE Hongkong Land Holdings Limited today announced that the net profit for the year ended 31st December 1999 increased by 112% to US$267 million from US$126 million in 1998. The increase was due to the movement in provisions against impairment of asset values, mainly development properties, which reduced profit in 1998 by US$248 million, while 1999 saw a small net write back of US$2 million. Excluding these items from both years, net profit declined by 28% from US$370 million to US$265 million, largely as a result of negative rent reversions in the Central portfolio. Earnings per share rose by 113% to USc10.59. Excluding asset impairment movements from both years, earnings per share fell by 28% to USc10.48 compared with recurring earnings per share in 1998 of USc14.65. The annual valuation of the Group's investment properties was carried out at the end of 1999 by independent professional valuers and produced a net valuation surplus for the year of US$160 million, which has been credited to reserves. Shareholders' funds at the year end were US$5,226 million, up 3% from US$5,072 million in 1998. Net asset value per share rose 3% in 1999, from US$2.01 to US$2.07. Net balance sheet gearing rose from 9% at the end of 1998 to 12%. The Directors recommend a final dividend of USc5.50 per share which, together with the interim dividend of USc3.50 per share, will make a total annual dividend of USc9.00 per share, unchanged from that of 1998. GROUP REVIEW Turning to the operations, the Chairman, Simon Keswick, said that the Group's strategy continues to focus on maximising the revenue from its Central portfolio in Hong Kong, developing investment and trading properties in the region, and growing its infrastructure portfolio. Redevelopment of 11 Chater Road, which lies at the heart of the Group's Central portfolio of properties, continued satisfactorily during 1999 and is on schedule for completion in mid-2002. It also undertook a number of initiatives to upgrade the fabric of the portfolio and keep it fully competitive. Importantly, overall occupancy was maintained above 94% throughout the year. The retail element of the portfolio showed a good recovery from a very difficult 1998. The Group's development properties at One Raffles Link, Singapore and 1063 King's Road, Hong Kong were completed and are letting well. Progress on the development of its infrastructure portfolio was slow, but the Group's investment in Hong Kong's Container Port has moved forward and construction of the new terminal will commence shortly. OUTLOOK In conclusion, Simon Keswick said, 'In the near term Hongkong Land's revenue stream will continue to be adversely affected by negative rent reversions. It is, however, encouraging that, notwithstanding the recent recession, Hong Kong continues to develop and expand its role as a regional financial centre. Hong Kong's financial heart lies in Central, where the Group continues to focus its investment in order to maximise the long-term return on its assets.' CHIEF EXECUTIVE'S REVIEW STRATEGIC FOCUS Hongkong Land's principal objectives remain: - To maximise the long-term returns on the portfolio of properties it owns in the heart of Hong Kong's Central business district. - To pursue profitable property investment opportunities both in Hong Kong and elsewhere in Asia. - To expand its portfolio of infrastructure investments. THE CENTRAL PORTFOLIO Commercial Asking rents, after falling for two years as a result of recession and major new supply stabilised in mid-1999 and are slowly recovering. Hongkong Land took steps to minimise the impact of the new space in Central well in advance of its completion and this has allowed occupancy levels to be maintained at around 95% over the last 3 years. Rent reversions were, however, sharply negative in 1999 and this will continue through 2000, which will be reflected in further declines in average rents. A shortage of new office supply over the next two years and the resumption of growth in the Hong Kong economy encourage a more optimistic view of asking rents in the medium term. Hongkong Land continued to invest vigorously in maintaining and improving its Central portfolio. The redevelopment of the 11 Chater Road site is going ahead on schedule for completion in mid-2002. The new building will comprise an office tower above a retail podium totalling some 580,000 square feet gross. In addition to this, the telecommunications infrastructure of the portfolio continues to be upgraded and a major refit of the mechanical and electrical installations in Edinburgh and Gloucester Towers will be completed in 2000. Retail Properties Trading conditions for Central retailers improved substantially in 1999 following a very difficult 1998. The confidence that international brand retailers have in Central was reflected in the opening of several large new 'flagship' stores in the portfolio during the year. In general sales activity has exceeded expectations. The refurbishments of the retail podium of Prince's Building and the basement of the Landmark were completed during 1999 and have been well received by both retailers and shoppers. The refurbished premises have been fully let on satisfactory terms. Hongkong Land currently derives some 17% of its Central portfolio revenues from retail activities and an increase in this level is anticipated. E-Commerce Demand for telecommunications capacity within the Central portfolio is increasing in line with the growth in e- commerce/internet activity. The Group continues to invest to ensure that all of its tenants have access to adequate capacity. A comprehensive review of the opportunities for Hongkong Land created by e-commerce has commenced. This review will seek the best way to harness, internally, the latest technology so as to improve the service we offer our tenants while exploring the commercial opportunities that may be generated. OTHER PROPERTIES Commercial The Group's office and retail development at One Raffles Link, Singapore was substantially completed during 1999. The office element of 240,000 square feet net has been over 90% pre-let. Tenants are fitting out and the building will be operational from April 2000. The retail element of 70,000 square feet net mainly comprises an underground mall connecting the basement of the office building to Singapore's Mass Rapid Transit. Retailer response to this space, which is still being completed, has been strong and is commanding good rents. It is now over 85% committed. Fitting out of the retail units will begin in April and the mall will be fully operational by mid-2000. In Hong Kong, the Group's 230,000 square feet net office building at Quarry Bay, 1063 King's Road, was completed on schedule in July 1999 and has subsequently been fully let to a range of high quality tenants, many of whom operate in the internet arena. The rents obtained compare favourably with those prevailing in the area. The World Bank was secured as a major tenant at 63 Ly Thai To, the Group's second office building in central Hanoi. Both buildings, which comprise some 120,000 square feet net, are over 90% let in what continues to be a difficult market. Residential In Beijing the second and last phase of Maple Place was completed, and leasing of the 209 luxury residential units has progressed satisfactorily in a difficult market. This development, which has established itself as Beijing's premier residential location, is owned 40% by the Group. Roxas Triangle Tower, Manila, in which the Group has a 40% interest in partnership with Ayala, continued to make progress to completion, now scheduled for late-2000. The Manila property market remains depressed but there were some encouraging signs of new activity towards the end of 1999. In Hong Kong the Group's residential holdings - principally Stanley Court - were fully occupied at satisfactory rents. The residential market in Hong Kong remains, at all levels, sluggish. In December 1999, Hongkong Land formalised a joint venture with Grosvenor Estates of London. The objective of this venture, Grosvenor Land, is to invest in prime residential real estate in major Asian cities. Once Grosvenor Land becomes fully operational third-party investors will be approached and invited to participate in its further growth. Infrastructure Asia Container Terminals (ACT), in which the Group has a 28.5% interest, made further progress towards its involvement in operations at Hong Kong's container port during 1999. Financing arrangements for this long-awaited project have been concluded and construction will commence in May 2000. It is planned that ACT will take over two deepwater container berths at Container Terminal 8 in 2004. Throughput at the container port rose during 1999, and planned infrastructural upgrades will help to reinforce Hong Kong's importance as a regional container hub in the long term. In China both Central China Power (in which the Group has a 25% interest) and China Water Company (40%) made further progress. The restructurings of the Chinese economy, however, has meant that this progress has not been as brisk as might be desired. The 75 km Tangerang to Merak toll road in Indonesia, in which Hongkong Land has a 13% interest, benefited from improved traffic levels and lower interest rates but an increase in tolls remains elusive. Connaught Investors The market value of the Group's 45% holding in Connaught Investors rose from US$243 million at the beginning of 1999 to US$465 million at the end of the year. Nicholas Sallnow-Smith Chief Executive Officer 28th February 2000 ______________________________________________________________ Hongkong Land Holdings Limited Consolidated Profit and Loss Account for the year ended 31st December 1999 ______________________________________________________________ 1999 1998 US$m US$m ______________________________________________________________ Revenue (note 2) 418.9 527.4 Recoverable and non-recoverable costs (76.9) (78.3) _______ _______ Net income from properties 342.0 449.1 Other income 0.4 3.4 Administrative and other expenses (25.2) (26.2) _______ _______ 317.2 426.3 Asset impairment reversals/ (provisions) (note 3) 2.2 (247.6) _______ _______ Operating profit (note 4) 319.4 178.7 Net financing charges (30.9) (17.5) Share of results of associates and joint ventures (note 5) 10.2 10.9 _______ _______ Profit before taxation 298.7 172.1 Taxation (note 6) (30.6) (50.3) _______ _______ Profit after taxation 268.1 121.8 Minority interests (1.0) 4.0 _______ _______ Profit after taxation and minority interests 267.1 125.8 ======= ======= ______________________________________________________________ USc Usc ______________________________________________________________ Earnings per share (note 7) 10.59 4.98 Earnings per share excluding asset Impairment reversals/provisions (note 7) 10.48 14.65 Diluted earnings per share (note 7) 10.59 4.98 Diluted earnings per share excluding asset Impairment reversals/provisions (note 7) 10.48 14.65 ______________________________________________________________ ______________________________________________________________ Hongkong Land Holdings Limited Consolidated Balance Sheet at 31st December 1999 ______________________________________________________________ 1999 1998 US$m US$m ______________________________________________________________ Net operating assets Tangible assets (note 8) Investment properties 4,848.8 4,668.8 Development properties 697.6 610.8 Others 16.1 16.6 _______ _______ 5,562.5 5,296.2 Associates and joint ventures 397.1 374.9 Other investments 12.9 12.9 Deferred tax assets 2.4 2.7 Pension assets 9.3 9.6 _______ _______ Non-current assets 5,984.2 5,696.3 Current assets (note 9) 1,449.0 1,473.4 Current liabilities (note 10) (522.0) (446.3) Net current assets 927.0 1,027.1 Term loans (note 11) (1,674.0) (1,644.0) Deferred tax liabilities (11.3) (8.5) _______ _______ 5,225.9 5,070.9 ======= ======= Capital employed Share capital 259.2 259.2 Revenue and other reserves Property revaluation reserve 3,654.3 3,525.2 Exchange fluctuation reserve (44.2) (26.7) Revenue reserves 1,434.0 1,391.7 5,044.1 4,890.2 Own shares held (77.7) (77.7) _______ _______ Shareholders' funds 5,225.6 5,071.7 Minority interests 0.3 (0.8) _______ _______ 5,225.9 5,070.9 ======= ======= ______________________________________________________________ US$ US$ ______________________________________________________________ Net asset value per share 2.07 2.01 ______________________________________________________________ ______________________________________________________________ Hongkong Land Holdings Limited Consolidated Statement of Changes in Shareholders' Funds for the year ended 31st December 1999 ______________________________________________________________ 1999 1998 US$m US$m ______________________________________________________________ At 1st January - as previously reported 4,924.8 8,831.9 - effect of adopting IAS 10 (revised 1999) 138.8 215.7 - effect of adopting IAS 19 (revised 1998) 8.1 7.9 _______ _______ - as restated 5,071.7 9,055.5 Net revaluation surplus/(deficit) 162.5 (3,470.4) Provision against a development property (29.5) (316.4) Share of reserve movements of associates and joint ventures (0.7) (3.2) Provision against a short-term leasehold investment property (5.6) - Deferred tax on provision against a short- term leasehold investment property 1.0 - Net exchange translation differences (13.8) 3.0 Net gains/(losses) not recognised in the Consolidated profit and loss account 113.9 (3,787.0) Profit after taxation and minority interests 267.1 125.8 Dividends (note 12) (227.1) (303.0) Repurchase of ordinary shares - (19.6) _______ _______ At 31st December 5,225.6 5,071.7 ======= ======= ______________________________________________________________ Hongkong Land Holdings Limited Consolidated Cash Flow Statement for the year ended 31st December 1999 ______________________________________________________________ 1999 1998 US$m US$m ______________________________________________________________ Cash flows from operating activities Operating profit 319.4 178.7 Depreciation 5.7 5.6 Asset impairment (reversals)/provisions (2.2) 247.6 Disposal of unlisted investments - (2.8) Increase in stock and store (0.1) - Increase in debtors and prepayments (10.9) (4.9) Increase/(decrease) in creditors and accruals 2.0 (14.1) Interest received 73.0 90.6 Interest and other financing charges paid (101.8) (105.5) Tax paid (32.1) (49.2) Dividends received 0.3 1.3 253.3 347.3 Cash flows from investing activities Developments capital expenditure (133.8) (101.0) Major renovations expenditure (12.5) (12.3) Investments in and loans to joint ventures (13.3) (31.4) Purchase of other investments - (4.2) Disposal of other investments 0.4 260.8 (159.2) 111.9 Cash flows from financing activities Drawdown of secured bank loans 151.1 50.4 Repayment of unsecured bank loans (49.7) - Drawdown of unsecured bank loans - 10.4 Repurchase of ordinary shares - (20.2) Repurchase of 4% convertible bonds (27.2) (12.0) Dividends paid by the Company (226.1) (301.2) (151.9) (272.6) _______ _______ Net (decrease)/increase in cash and cash equivalents (57.8) 186.6 Cash and cash equivalents at 1st January 1,410.9 1,224.3 _______ _______ Cash and cash equivalents at 31st December 1,353.1 1,410.9 ======= ======= ______________________________________________________________ USc USc ______________________________________________________________ Cash flow per share (note 13) 9.54 13.27 ______________________________________________________________ Hongkong Land Holdings Limited Notes 1. ACCOUNTING POLICIES AND BASIS OF PREPARATION The financial information contained in this announcement has been based on the audited results for the year ended 31st December 1999 which have been prepared under the historical cost convention as modified by the revaluation of certain non-current assets, and comply with International Accounting Standards. In 1999, the Group implemented IAS 1 (revised 1997), Presentation of Financial Statements; IAS 14 (revised 1997), Segment Reporting; IAS 17 (revised 1997), Leases; IAS 19 (revised 1998), Employee Benefits and IAS 35, Discontinuing Operations. The provisions of IAS 10 (revised 1999), Events After the Balance Sheet Date; IAS 16 (revised 1998), Property, Plant and Equipment; IAS 22 (revised 1998), Business Combinations; IAS 28 (revised 1998), Accounting for Investments in Associates; IAS 31 (revised 1998), Financial Reporting of Interests in Joint Ventures; IAS 36, Impairment of Assets; IAS 37, Provisions, Contingent Liabilities and Contingent Assets and IAS 38, Intangible Assets are applied in advance of their effective dates. With the exception of IAS 10 (revised 1999) and IAS 19 (revised 1998), there are no changes in accounting policy that affect profit or Shareholders' funds resulting from the adoption of the above standards as the Group was already following the recognition and measurement principles in those standards. In accordance with IAS 10 (revised 1999) on Events After the Balance Sheet Date, dividends proposed or declared after the balance sheet date are not recognised as a liability at the balance sheet date. In previous years, dividends proposed or declared after the balance sheet date were recognised as a liability at the balance sheet date. The effect of this change has been to increase the Shareholders' funds at 1st January 1998 and 1999 by US$215.7 million and US$138.8 million respectively. In accordance with IAS 19 (revised 1998) on Employee Benefits, pension costs are assessed using the projected unit credit method. Under this method, the costs of providing pensions are charged to the consolidated profit and loss account so as to spread the regular cost over the service lives of employees in accordance with an annual independent professional actuarial valuation. The plan assets are measured at fair value and the pension obligations are measured as the present value of the estimated future cash flows by reference to market yields on high quality corporate bonds which have terms to maturity approximating the terms of the related liability. Actuarial gains and losses to the extent of the amount in excess of 10% of the greater of the present value of the plan obligations and the fair value of plan assets are recognised in the consolidated profit and loss account over the expected average remaining service lives of the participating employees. In previous years, pension costs were assessed using the attained age normal method and pension obligations were discounted at the expected rate of return on plan assets. The effect of this change has been to increase the profit after taxation and minority interests for the year ended 31st December 1998 by US$0.2 million. Shareholders' funds at 1st January 1998 and 1999 have been increased by US$7.9 million and US$8.1 million respectively. There have been no other changes to the Group's accounting policies described in the 1998 Financial Statements. 2. REVENUE 1999 1998 US$m US$m _______ _______ By business Property Rental income 364.8 469.8 Service and management charges 53.3 55.5 Income from property trading 0.8 2.1 _______ _______ 418.9 527.4 ======= ======= By geographical area Hong Kong 415.8 525.0 Southeast Asia 3.1 2.4 _______ _______ 418.9 527.4 ======= ======= 3. ASSET IMPAIRMENT REVERSALS/(PROVISIONS) 1999 1998 US$m US$m _______ _______ Provision against development properties - (190.0) Other asset impairment reversals and provisions 2.2 (57.6) _______ _______ 2.2 (247.6) ________ _________ By business Property 2.2 (236.5) Infrastructure - (11.1) _______ _______ 2.2 (247.6) ======= ======= Asset impairment reversals after taxation and minority interests amounted to US$2.6 million (1998: provisions of US$244.0 million). 4. OPERATING PROFIT 1999 1998 US$m US$m _______ _______ Segment results by business Property 334.6 201.1 Infrastructure (1.4) (12.6) _______ _______ 333.2 188.5 Other income from infrastructure 0.4 - Unallocated other income - 3.4 Unallocated administrative and other expenses (14.2) (13.2) _______ _______ 319.4 178.7 ======= ======= 5. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES 1999 1998 US$m US$m _______ _______ Connaught Investors 6.5 9.6 Joint ventures 3.7 1.9 Goodwill - (0.6) _______ _______ 10.2 10.9 ======= ======= By business Property 1.0 0.5 Infrastructure 2.7 0.8 Connaught Investors 6.5 9.6 _______ _______ 10.2 10.9 ======= ======= 6. TAXATION 1999 1998 US$m US$m _______ _______ Current tax Company and subsidiaries Hong Kong 26.0 46.2 Southeast Asia 0.1 0.1 _______ _______ 26.1 46.3 Associates and joint ventures Hong Kong 0.1 0.1 Mainland China 0.3 0.1 Connaught Investors 0.1 0.1 0.5 0.3 _______ _______ 26.6 46.6 Deferred tax Hong Kong subsidiaries Reversal of temporary differences 4.0 2.0 Utilisation of tax losses - 1.6 Change in tax rate - 0.1 4.0 3.7 _______ _______ 30.6 50.3 ======= ======= 1999 1998 US$m US$m _______ _______ Reconciliation of taxation and profit Tax at the applicable tax rate 37.4 1.7 Asset impairment reversals/provisions not Taxable or deductible in determining taxable profit (0.6) 51.4 Expenses not deductible in determining taxable profit 0.4 0.5 Other income not subject to tax (2.7) (3.8) Losses not recognised 2.0 0.4 Tax rebates for previous year (5.6) - Overprovision for prior years (0.3) - Change in tax rate - 0.1 _______ _______ 30.6 50.3 ======= ======= Taxation on profits is provided at the rates of taxation prevailing in the territories in which the Group operates. The applicable tax rate represents the weighted average of the rates of taxation prevailing in the territories in which the Group operates. 7. EARNINGS PER SHARE 1999 1998 US$m US$m _______ _______ Profit after taxation and minority Interests for calculation of earnings per share 267.1 125.8 Asset impairment reversals/provisions (see note 3) (2.6) 244.0 _______ _______ Adjusted earnings for calculation of earnings per share excluding asset impairment reversals/provisions 264.5 369.8 ======= ======= 1999 1998 Millions Millions of Shares of Shares _________ _________ Weighted average number in issue 2,592.4 2,594.4 Own shares held (69.6) (69.6) _______ _______ Number used to compute earnings per share and earnings per share excluding asset impairment reversals/provisions 2,522.8 2,524.8 ======= ======= The convertible bonds were anti-dilutive and therefore ignored in calculating diluted earnings per share. As a result, earnings per share and diluted earnings per share were the same. 8. TANGIBLE ASSETS AND CAPITAL COMMITMENTS 1999 1998 US$m US$m _______ _______ Tangible assets At 1st January 5,296.2 9,161.6 Exchange translation differences (17.1) 4.5 Additions 164.4 114.5 Depreciation (5.7) (5.6) Net revaluation surplus/(deficit and provision) 124.7 (3,978.8) _______ _______ At 31st December 5,562.5 5,296.2 ======= ======= Capital commitments 622.7 768.5 ======= ======= 9. CURRENT ASSETS 1999 1998 US$m US$m _______ _______ Property held for sale 41.1 36.2 Debtors, prepayments and others 34.6 24.0 Bank balances and other liquid funds 1,373.3 1,413.2 _______ _______ 1,449.0 1,473.4 ======= ======= Bank balances and other liquid funds include liquid investments of US$106.3 million (1998: US$124.4 million). Bank balances included an amount of US$134.6 million (1998: US$134.8 million) subject to collateralised arrangements. 10. CURRENT LIABILITIES 1999 1998 US$m US$m _______ _______ Creditors and other accruals 201.5 177.5 Unsecured bank loans 73.2 123.3 Bank overdrafts 20.2 2.3 Current portion of term loans (see note 11) 213.5 123.5 Taxation 13.6 19.7 _______ _______ 522.0 446.3 ======= ======= 11. TERM LOANS 1999 1998 US$m US$m _______ _______ Hong Kong Dollar Secured bank loans 1,116.3 1,018.5 Unsecured bank loans wholly repayable within five years 141.6 142.0 7.625% bonds - 1993/2001 64.3 64.5 _______ _______ 1,322.2 1,225.0 Singapore Dollar Secured bank loans 90.5 39.6 United States Dollar Secured bank loans 3.4 4.5 Unsecured bank loans wholly repayable within five years 113.8 113.8 4% convertible bonds due 2001 357.6 384.6 _______ _______ 474.8 502.9 _______ _______ 1,887.5 1,767.5 Less current portion (see note 10) 213.5 123.5 _______ _______ 1,674.0 1,644.0 ======= ======= The 4% convertible bonds due 2001 issued in February 1994 are convertible into fully paid ordinary shares of the Company at a price of US$4.02 per share. The bonds are listed on the Luxembourg Stock Exchange. The equity component of the convertible bonds amounts to US$58.1 million (1998: US$62.7 million) based on the prevailing market interest rate of 7% at the time of issue for similar debt without conversion options. Of the total term loans of US$1,887.5 million (1998: US$1,767.5 million), the convertible bonds were at a fixed interest rate of 4%, US$579.5 million equivalent of Hong Kong Dollar loans was at an average fixed interest rate of 8.1% (1998: US$574.9 million at 8.2%) and US$6.0 million equivalent of Singapore Dollar loans was at an average fixed interest rate of 4.5% (1998: nil). After taking account of interest rate swaps, the overall average interest rates were 7.5% (1998: 7.3%) for Hong Kong Dollar loans, 4.6% (1998: 4.3%) for United States Dollar loans and 4.3% (1998: 5.6%) for Singapore Dollar loans. Mortgages have been granted over certain properties of total value of US$1,721.7 million (1998: US$1,585.6 million) as security for the obligations of the Group to various banks in respect of the secured term loans. 12. DIVIDENDS 1999 1998 US$m US$m _______ _______ Final dividend in respect of 1998 of USc5.50 (1997: USc8.50) per share 138.8 214.7 Interim dividend in respect of 1999 of USc3.50 (1998: USc3.50) per share 88.3 88.3 _______ _______ 227.1 303.0 _______ _______ A final dividend in respect of 1999 of USc5.50 per share amounting to a total of US$138.8 million is proposed by the Board. The dividend proposed is not accounted for until it has been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2000. 13. CASH FLOW PER SHARE Cash flow per share is based on cash flows from operating activities less major renovations expenditure amounting to US$240.8 million (1998: US$335.0 million) and is calculated on the weighted average of 2,522.8 million (1998: 2,524.8 million) shares in issue during the year, which excludes 69.6 million shares in the Company held by a subsidiary. 14. CONTINGENT LIABILITIES A subsidiary of the Group has given guarantees in respect of the Group's obligations to the Container Terminal 9 development in Hong Kong. The anticipated capital commitment to the build out of two berths in the project is estimated to be approximately US$160.0 million. However, were the subsidiary required to provide additional funds for the build out cost of the other berths, the maximum contingent liability assumed in respect of the guarantees would be US$276.3 million (1998: US$279.3 million). 15. ANNUAL REPORT The Annual Report will be posted to shareholders on or about 25th April 2000. Copies may be obtained from Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda; IRG plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England and M & C Services Private Limited, 16 Raffles Quay 23-01, Hong Leong Building, Singapore 048581. The final dividend of USc5.50 per share will be payable on 7th June 2000, subject to approval at the Annual General Meeting to be held on 31st May 2000, to shareholders on the register of members at the close of business on 24th March 2000. The ex-dividend date will be on 22nd March 2000, and the share registers will be closed from 27th to 31st March 2000, inclusive. Shareholders will receive their dividends in United States Dollars, unless they are registered on the Jersey branch register where they will have the option to elect for Sterling. These shareholders may make new currency elections by notifying the United Kingdom transfer agent in writing by 19th May 2000. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing ten business days prior to the payment date. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States Dollars unless they elect, through CDP, to receive Singapore Dollars. For further information, please contact: Hongkong Land Limited (852) 2842 8300 (office) N R Sallnow-Smith Matheson & Co. Limited (44) 171 816 8135 (office) Martin Henderson Forrest International Limited (852) 2522 6475 (office) Sue Gourlay/Rosemary Sayer Ludgate Communications (44) 171 253 2252 (office) Richard Hews Full text of this and other Group announcements, and the Preliminary Financial Statements for the year ended 31st December 1999 can be accessed through the Internet at 'http://www.irasia.com/listco/sg/hkland'.

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