Half Yearly Results

RNS Number : 8227M

Hongkong Land Hldgs Ltd

03 August 2017

 

To: Business Editor                                                           3rd August 2017

                                                                                       For immediate release

The following announcement was issued today to a Regulatory Information Service approved by the Financial Conduct Authority in the United Kingdom.

 

HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2017

Highlights

·    Underlying profit up 32%

·    Positive performance from investment properties

·    Higher sales completions

·    New property developments in Singapore, Nanjing and Wuhan

"The good performance of the Group's investment property portfolio is expected to continue in the second half of the year, although the contribution from development properties will not benefit from further sales completions in Singapore."

Ben Keswick

Chairman

Results

	(unaudited)
	Six months ended 30th June
	2017		2016	Change
	US$m		US$m	%
Underlying profit attributable to shareholders#		517	393	+32
Profit attributable to shareholders		3,125	1,263	+147
Shareholders' funds		34,221	31,294*	+9
Net debt		1,882	2,008*	-6
		US¢	US¢	%
Underlying earnings per share#		21.99	16.70	+32
Earnings per share		132.83	53.70	+147
Interim dividend per share		6.00	6.00	-
		US$	US$	%
Net asset value per share		14.54	13.30*	+9
# The Group uses 'underlying profit attributable to shareholders' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 8 to the condensed financial statements.  Management considers this to be a key measure which provides additional information to enhance understanding of the Group's underlying business performance. * At 31st December 2016

The interim dividend of US¢6.00 per share will be payable on 19th October 2017 to shareholders on the

register of members at the close of business on 25th August 2017.

HONGKONG LAND HOLDINGS LIMITED

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2017

OVERVIEW

The Group's investment properties produced an increased contribution due to higher average rents achieved in Hong Kong.  Of the Group's development properties, being residential and mixed-use projects developed for sale in the short to medium-term, higher sales completions led to increased profits in both mainland China and Singapore.

PERFORMANCE

During the first half of the year, the Group's underlying profit attributable to shareholders was US$517 million, compared with US$393 million in 2016.  The profit attributable to shareholders was US$3,125 million after accounting for a net gain of US$2,608 million arising on the revaluation of the Group's investment properties.  This compares with a profit of US$1,263 million in 2016, after a net revaluation gain of US$870 million.

The net asset value per share at 30th June 2017 was US$14.54, compared to US$13.30 at 31st December 2016.

The Directors have declared an unchanged interim dividend of US¢6.00 per share.

GROUP REVIEW

Investment Properties

In Hong Kong, office rental reversions were positive as market supply remained tight.  Vacancy in the Group's Central office portfolio at 30th June 2017 was 1.5%, compared with 2.2% at the end of 2016 and 3.1% at 30th June 2016.  The Group's average office rent rose to HK$106 per sq. ft, compared to HK$103 per sq. ft in both the first and second halves of 2016.  The Group's Central retail portfolio was 99.4% occupied, compared to 100% at the end of 2016 and at 30th June 2016.  While base rents were little changed on reversion, the positive reversions seen in 2016 led to the average retail rent increasing to HK$224 per sq. ft, compared with HK$216 per sq. ft and HK$220 per sq. ft in the first and second halves of 2016, respectively.

Mildly negative rental reversions continued in the Group's Singapore office portfolio, reflecting the current relative surplus of market supply, with vacancy at the end of June of 0.2% compared with 0.1% at the end of 2016 and 1.0% at 30th June 2016.  The average office rent decreased slightly to S$9.1 per sq. ft, compared with S$9.4 per sq. ft and S$9.2 per sq. ft in the first and second halves of 2016, respectively.

In mainland China, the construction and leasing of the Group's luxury retail and hotel complex in Beijing, WF CENTRAL in Wangfujing, is progressing well, with the retail component scheduled to open in late 2017 and the 74-room Mandarin Oriental hotel in 2018.  In Jakarta, the 73,000 sq. m. fifth tower at Jakarta Land, the Group's 50%-owned joint venture, is due to complete in early 2018.  In Cambodia, space in the Group's 26,000 sq. m. prime mixed-use complex is being progressively taken up by tenants.

In June 2017, a joint venture agreement was reached to construct and manage a well-located site within the Marina Bay Financial District of Singapore with a developable area of 120,000 sq. m.  The Group will have a 33% interest in the project, which will be connected to its existing portfolio in the district.

Development Properties

In mainland China the business benefited from further completions of primarily residential units and positive market sentiment, resulting in both an increase in overall contracted sales and an improved profit contribution.  The attributable interest in contracted sales in mainland China was US$701 million in the first half of 2017, compared to US$432 million and US$673 million in the first and second halves of 2016, respectively.  At 30th June 2017, the Group had US$1,421 million in sold but unrecognised contracted sales, compared with US$1,083 million at the end of 2016.

During the period, the Group entered into two new markets in mainland China.  In February 2017, a conditional agreement was reached to develop jointly a mixed-use site in Wuhan, with a developable area of 494,000 sq. m., in which the Group will have a 50% interest.  In April 2017, an agreement was signed to develop jointly a mixed-use site in Nanjing, with a developable area of 217,000 sq. m., in which the Group will have a 33% interest.  Both projects will be developed over multiple phases through to 2021.

Results from the Group's residential development activities in Singapore reflected the recognition of profit on the 699-unit LakeVille project, which was completed during the first half of the year, while there were no completions in the first half of 2016.  Pre-sales continued at the Sol Acres and Lake Grande projects with satisfactory results.  In May 2017, the Group won a tender for a residential site with a developable area of 98,000 sq. m., which is expected to complete in 2021.

Of the Group's other properties, three joint venture residential projects in Indonesia are advancing on schedule.  In the Philippines, satisfactory progress is being made in the construction of a 40%-owned 182-unit luxury apartment block in Manila and a 40%-owned mixed-use development in Cebu.  In Thailand, the Group entered into a 49%-held joint venture to develop a residential site, with a developable area of 38,000 sq. m.  Construction is expected to commence in early 2018 and will complete in 2020.

Financing

The Group's financial position remains strong with net debt of US$1.9 billion at 30th June 2017, down from US$2.0 billion at the end of 2016.  Net gearing was 5%, compared with 6% at the end of the year.

OUTLOOK

The good performance of the Group's investment property portfolio is expected to continue in the second half of the year, although the contribution from development properties will not benefit from further sales completions in Singapore.

Ben Keswick

Chairman

Hongkong Land Holdings Limited Consolidated Profit and Loss Account
	(unaudited)
	Six months ended 30th June																									Year ended 31st December
		2017										2016														2016
		Underlying business performance US$m				Non- trading items US$m				Total US$m				Underlying business performance US$m				Non- trading items US$m				Total US$m								Underlying business performance US$m								Non- trading items US$m				Total US$m
Revenue (note 2)		1,296.7				-				1,296.7				782.8				-				782.8							1,993.9								-					1,993.9
Net operating costs (note 3)		(786.4)				-				(786.4)				(327.3)				-				(327.3)							(1,023.3)								-					(1,023.3)
Change in fair value of investment properties		-				2,693.6				2,693.6				-				986.2				986.2							-								2,549.9					2,549.9
Asset impairment reversals		-				-				-				-				-				-							-								1.2					1.2
Operating profit (note 4)		510.3				2,693.6				3,203.9				455.5				986.2				1,441.7							970.6								2,551.1					3,521.7
Financing charges		(57.4)				-				(57.4)				(54.4)				-				(54.4)							(110.4)								-					(110.4)
Financing income		21.6				-				21.6				22.1				-				22.1							41.5								-					41.5
Net financing charges		(35.8)				-				(35.8)				(32.3)				-				(32.3)							(68.9)								-					(68.9)
Share of results of associates and    joint ventures (note 5)		135.3				(76.4)				58.9				59.6				(120.9)				(61.3)							117.0								(57.9)					59.1
Profit before tax		609.8				2,617.2				3,227.0				482.8				865.3				1,348.1							1,018.7								2,493.2					3,511.9
Tax (note 6)		(91.5)				0.1				(91.4)				(89.0)				1.0				(88.0)							(168.1)								0.8					(167.3)
Profit after tax		518.3				2,617.3				3,135.6				393.8				866.3				1,260.1							850.6								2,494.0					3,344.6
Attributable to:
Shareholders of the Company		517.4				2,607.9				3,125.3				392.8				870.6				1,263.4							847.8								2,498.5					3,346.3
Non-controlling interests		0.9				9.4				10.3				1.0				(4.3)				(3.3)							2.8								(4.5)					(1.7)
		518.3				2,617.3				3,135.6				393.8				866.3				1,260.1							850.6								2,494.0					3,344.6
		US¢								US¢				US¢								US¢							US¢													US¢
Earnings per share (note 7)		21.99								132.83				16.70								53.70							36.03													142.23

Hongkong Land Holdings Limited Consolidated Statement of Comprehensive Income
					(unaudited) Six months ended 30th June													Year ended 31st December
					2017 US$m								2016 US$m								2016 US$m
Profit for the period					3,135.6								1,260.1								3,344.6
Other comprehensive income/(expense)
Items that will not be reclassified to
profit or loss:
Remeasurements of defined benefit
plans					-								-								(1.2)
Tax on items that will not be reclassified					-								-								0.2
					-								-								(1.0)
Items that may be reclassified
subsequently to profit or loss:
Net exchange translation differences					(25.1)								26.4								(172.1)
Revaluation of other investments					36.7								(7.9)								(9.1)
Cash flow hedges
- net (loss)/gain arising during the period					(31.4)								36.0								41.8
- transfer to profit and loss					(1.6)								(1.3)								(2.5)
					(33.0)								34.7								39.3
Tax relating to items that may be
reclassified					5.4								(5.7)								(6.5)
Share of other comprehensive
income/(expense) of associates
and joint ventures					125.7								52.0								(144.9)
					109.7								99.5								(293.3)
Other comprehensive income/(expense)
for the period, net of tax					109.7								99.5								(294.3)
Total comprehensive income for the
period					3,245.3								1,359.6								3,050.3
Attributable to:
Shareholders of the Company					3,232.9								1,364.0								3,055.2
Non-controlling interests					12.4								(4.4)								(4.9)
					3,245.3								1,359.6								3,050.3

 

Hongkong Land Holdings Limited Consolidated Balance Sheet
			(unaudited) At 30th June							At 31st December
			2017 US$m				2016 US$m				2016 US$m
Net operating assets
Tangible fixed assets			50.0				36.6				44.9
Investment properties (note 10)			30,360.0				26,079.4				27,712.3
Associates and joint ventures			4,659.3				4,583.6				4,460.7
Other investments			88.4				53.3				52.2
Non-current debtors			36.8				80.8				60.1
Deferred tax assets			11.0				9.4				8.7
Pension assets			-				0.1				-
Non-current assets			35,205.5				30,843.2				32,338.9
Properties for sale			1,971.7				2,745.6				2,217.4
Current debtors			564.4				377.1				480.3
Current tax assets			19.0				18.5				9.2
Bank balances			1,902.0				1,560.3				1,908.9
Current assets			4,457.1				4,701.5				4,615.8
Current creditors			(1,354.1)				(1,640.2)				(1,490.3)
Current borrowings (note 11)			(364.4)				(18.8)				(220.7)
Current tax liabilities			(116.9)				(119.9)				(80.0)
Current liabilities			(1,835.4)				(1,778.9)				(1,791.0)
Net current assets			2,621.7				2,922.6				2,824.8
Long-term borrowings (note 11)			(3,419.4)				(3,863.0)				(3,695.7)
Deferred tax liabilities			(122.9)				(101.9)				(121.5)
Pension liabilities			(2.4)				(0.2)				(1.8)
Non-current creditors			(29.1)				(26.8)				(30.3)
			34,253.4				29,773.9				31,314.4
Total equity
Share capital			235.3				235.3				235.3
Share premium			386.9				386.9				386.9
Revenue and other reserves			33,599.3				29,121.0				30,672.2
Shareholders' funds			34,221.5				29,743.2				31,294.4
Non-controlling interests			31.9				30.7				20.0
			34,253.4				29,773.9				31,314.4

Hongkong Land Holdings Limited Consolidated Statement of Changes in Equity
		Attributable to shareholders															Attributable to non-
				Share capital US$m				Share premium US$m		Revenue reserves US$m		Hedging reserves US$m		Exchange reserves US$m		of the Company US$m	controlling interests US$m			Total equity US$m
Six months ended 30th June 2017 (unaudited)
At 1st January 2017				235.3				386.9		31,093.6		18.6		(440.0)		31,294.4		20.0		31,314.4
Total comprehensive income				-				-		3,162.0		(30.0)		100.9		3,232.9		12.4		3,245.3
Dividends paid by the Company (note 9)				-				-		(305.8)		-		-		(305.8)		-		(305.8)
Dividends paid to non-controlling shareholders				-				-		-		-		-		-		(0.5)		(0.5)
At 30th June 2017				235.3				386.9		33,949.8		(11.4)		(339.1)		34,221.5		31.9		34,253.4
Six months ended 30th June 2016 (unaudited)
At 1st January 2016				235.3				386.9		28,205.8		(9.1)		(133.9)		28,685.0		35.4		28,720.4
Total comprehensive income				-				-		1,255.5		24.6		83.9		1,364.0		(4.4)		1,359.6
Dividends paid by the Company (note 9)				-				-		(305.8)		-		-		(305.8)		-		(305.8)
Dividends paid to non-controlling shareholders				-				-		-		-		-		-		(0.3)		(0.3)
At 30th June 2016				235.3				386.9		29,155.5		15.5		(50.0)		29,743.2		30.7		29,773.9
Total comprehensive income for the six months ended 30th June 2017 included in revenue reserves mainly comprises profit attributable to shareholders of the Company of US$3,125.3 million (2016: US$1,263.4 million) and a fair value gain on other investments of US$36.7 million (2016: a loss of US$7.9 million).  The cumulative fair value gain on other investments amounted to US$51.1 million (2016: US$15.6 million).
Year ended 31st December 2016
At 1st January 2016			235.3				386.9			28,205.8		(9.1)		(133.9)		28,685.0		35.4		28,720.4
Total comprehensive income			-				-			3,336.2		27.7		(308.7)		3,055.2		(4.9)		3,050.3
Dividends paid by the Company			-				-			(447.0)		-		-		(447.0)		-		(447.0)
Dividends paid to non-controlling shareholders			-				-			-		-		-		-		(4.2)		(4.2)
Unclaimed dividends forfeited			-				-			0.5		-		-		0.5		-		0.5
Change in interests in subsidiaries			-				-			(1.9)		-		2.6		0.7		(6.3)		(5.6)
At 31st December 2016			235.3				386.9			31,093.6		18.6		(440.0)		31,294.4		20.0		31,314.4
The comprehensive income for the year ended 31st December 2016 included in revenue reserves mainly comprises profit attributable to shareholders of the Company of US$3,346.3 million and a fair value loss on other investments of US$9.1 million.  The cumulative fair value gain on other investments amounted to US$14.4 million.

Hongkong Land Holdings Limited Consolidated Cash Flow Statement
							(unaudited) Six months ended 30th June							Year ended 31st December
							2017 US$m				2016 US$m				2016 US$m
Operating activities
Operating profit						3,203.9					1,441.7				3,521.7
Depreciation						1.4					1.5				3.1
Reversal of writedowns on properties for sale						-					(1.5)				(3.2)
Change in fair value of investment properties						(2,693.6)					(986.2)				(2,549.9)
Asset impairment reversals						-					-				(1.2)
Decrease in properties for sale						323.7					17.7				392.4
Increase in debtors						(40.6)					(20.0)				(131.7)
(Decrease)/increase in creditors						(150.4)					70.5				(7.5)
Interest received						18.2					21.2				36.4
Interest and other financing charges paid						(58.0)					(57.7)				(111.4)
Tax paid						(61.2)					(49.7)				(140.6)
Dividends from associates and joint ventures						29.3					29.9				88.1
Cash flows from operating activities						572.7					467.4				1,096.2
Investing activities
Major renovations expenditure						(47.3)					(47.0)				(91.3)
Developments capital expenditure						(52.5)					(62.2)				(148.2)
Investments in and loans to associates and
joint ventures						(262.1)					(4.7)				(104.2)
Advances and repayments from associates
and joint ventures						230.6					33.3				102.8
Payment of deposit for a joint venture						(43.5)					-				(4.2)
Cash flows from investing activities						(174.8)					(80.6)				(245.1)
Financing activities
Drawdown of borrowings						74.1					102.8				266.7
Repayment of borrowings						(219.9)					(169.6)				(240.6)
Dividends paid by the Company						(302.0)					(302.9)				(443.8)
Dividends paid to non-controlling shareholders						(0.5)					(2.1)				(4.2)
Change in interests in subsidiaries						15.0					-				(20.2)
Cash flows from financing activities						(433.3)					(371.8)				(442.1)
Net cash (outflow)/inflow						(35.4)					15.0				409.0
Cash and cash equivalents at beginning of
period						1,898.4					1,565.9				1,565.9
Effect of exchange rate changes						28.5					(22.4)				(76.5)
Cash and cash equivalents at end of period						1,891.5					1,558.5				1,898.4

Hongkong Land Holdings Limited

Notes to Condensed Financial Statements

1.   ACCOUNTING POLICIES AND BASIS OF PREPARATION

The condensed financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting'.  The condensed financial statements have been prepared on a going concern basis.  The condensed financial statements have not been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.

There are no new or amendments, which are effective in the current accounting period and relevant to the Group's operations, that have a significant effect on the Group's accounting policies.  There have been no changes to the accounting policies described in the 2016 annual financial statements.

2.   REVENUE

	Six months ended 30th June
				2017 US$m				2016 US$m
	Rental income			445.5				427.7
	Service income			67.3				64.9
	Sales of properties			783.9				290.2
				1,296.7				782.8

Service income includes service and management charges and hospitality service income.

3.   NET OPERATING COSTS

	Six months ended 30th June
				2017 US$m				2016 US$m
	Cost of sales			(729.7)				(280.6)
	Other income			6.1				5.0
	Administrative expenses			(62.8)				(51.7)
				(786.4)				(327.3)

4.  OPERATING PROFIT

	Six months ended 30th June
				2017 US$m				2016 US$m
	By business
	Investment Properties			433.5				410.6
	Development Properties			110.4				73.4
	Corporate			(33.6)				(28.5)
	Underlying business performance			510.3				455.5
	Change in fair value of investment properties			2,693.6				986.2
				3,203.9				1,441.7

5.   SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES

	Six months ended 30th June
				2017 US$m				2016 US$m
	By business
	Investment Properties
	- operating profit			70.9				76.4
	- net financing charges			(17.8)				(21.0)
	- tax			(8.7)				(8.9)
	- net profit			44.4				46.5
	Development Properties
	- operating profit			195.6				25.5
	- net financing charges			3.7				1.6
	- tax			(105.3)				(10.5)
	- non-controlling interests			(3.1)				(3.5)
	- net profit			90.9				13.1
	Underlying business performance			135.3				59.6
	Change in fair value of investment properties
	(net of deferred tax)			(76.4)				(120.9)
				58.9				(61.3)

6.   TAX

	Six months ended 30th June
				2017 US$m				2016 US$m
	Tax charged to profit and loss is analysed as follows:
	Current tax			(87.7)				(90.3)
	Deferred tax
	- changes in fair value of investment properties			0.1				1.0
	- other temporary differences			(3.8)				1.3
				(91.4)				(88.0)
	Tax relating to components of other comprehensive income is analysed as follows:
	Cash flow hedges			5.4				(5.7)

Tax on profits has been calculated at the rates of taxation prevailing in the territories in which the Group operates.

Share of tax charge of associates and joint ventures of US$90.3 million (2016: US$8.8 million) is included in share of results of associates and joint ventures.

7.   EARNINGS PER SHARE

Earnings per share are calculated on profit attributable to shareholders of US$3,125.3 million (2016: US$1,263.4 million) and on the weighted average number of 2,352.8 million (2016: 2,352.8 million) shares in issue during the period.

Earnings per share are additionally calculated based on underlying profit attributable to shareholders.  A reconciliation of earnings is set out below:

			Six months ended 30th June
			2017				2016
			US$m	Earnings per share US¢			US$m		Earnings per share US¢
	Underlying profit attributable to shareholders		517.4		21.99		392.8		16.70
	Non-trading items (note 8)		2,607.9				870.6
	Profit attributable to shareholders		3,125.3		132.83		1,263.4		53.70

8.   NON-TRADING ITEMS

Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance.  Items classified as non-trading items include fair value gains or losses on revaluation of investment properties; gains and losses arising from the sale of businesses, investments and investment properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.

An analysis of non-trading items is set out below:

	Six months ended 30th June
			2017 US$m		2016 US$m
	Change in fair value of investment properties		2,693.6		986.2
	Deferred tax on change in fair value of investment properties		0.1		1.0
	Share of change in fair value of investment properties of
	associates and joint ventures (net of deferred tax)		(76.4)		(120.9)
	Non-controlling interests		(9.4)		4.3
			2,607.9		870.6

9.   DIVIDENDS

	Six months ended 30th June
			2017 US$m		2016 US$m
	Final dividend in respect of 2016 of US¢13.00 (2015: US¢13.00) per share		305.8		305.8

An interim dividend in respect of 2017 of US¢6.00 (2016: US¢6.00) per share amounting to a total of US$141.2 million (2016: US$141.2 million) is declared by the Board and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2017.

10. INVESTMENT PROPERTIES

	Six months ended 30th June					Year ended 31st December
			2017 US$m		2016 US$m		2016 US$m
	Net book value at beginning of period		27,712.3		24,957.3		24,957.3
	Exchange differences		(127.1)		(12.4)		(71.0)
	Additions		81.2		148.3		276.1
	Increase in fair value		2,693.6		986.2		2,549.9
	Net book value at end of period		30,360.0		26,079.4		27,712.3

11. BORROWINGS

		At 30th June								At 31st December
				2017 US$m				2016 US$m				2016 US$m
	Current
	Bank overdrafts			10.5				1.8				10.5
	Current portion of long-term borrowings
	- bank loans			317.3				17.0				175.1
	- medium term notes due 2017			36.6				-				35.1
				364.4				18.8				220.7
	Long-term
	Bank loans			557.9				919.8				838.0
	Medium term notes
	- due 2017			-				37.8				-
	- due 2019			102.4				103.0				103.1
	- due 2020			304.1				309.0				299.6
	- due 2021			68.0				71.0				66.8
	- due 2022			608.5				623.7				605.1
	- due 2023			178.3				179.3				179.5
	- due 2024			406.2				420.9				405.5
	- due 2025			650.9				652.5				651.8
	- due 2026			38.4				38.6				38.6
	- due 2027			185.0				186.0				186.1
	- due 2028			79.2				79.7				79.7
	- due 2029			50.6				50.8				50.9
	- due 2030			102.5				103.1				103.2
	- due 2031			25.3				25.4				25.4
	- due 2032			30.2				30.3				30.3
	- due 2040			31.9				32.1				32.1
				2,861.5				2,943.2				2,857.7
				3,419.4				3,863.0				3,695.7
				3,783.8				3,881.8				3,916.4

12. FINANCIAL INSTRUMENTS

Financial instruments by category

The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2017 and 31st December 2016 are as follows:

	Loans and  receivables US$m		Derivatives used for hedging US$m		Available- for-sale US$m		Other  financial instruments  at amortised cost US$m			Other  financial instruments at fair value  through profit and loss US$m		Total carrying amount US$m			Fair value US$m
	30th June 2017
	Assets
	Other investments	-		-		88.4		-			-		88.4			88.4
	Debtors	305.2		20.2		-		-			11.9		337.3			337.3
	Bank balances	1,902.0		-		-		-			-		1,902.0			1,902.0
		2,207.2		20.2		88.4		-			11.9		2,327.7			2,327.7
	Liabilities
	Borrowings	-		-		-		(3,783.8)			-		(3,783.8)			(3,923.9)
	Creditors excluding
	non-financial
	liabilities	-		(11.0)		-		(494.8)			-		(505.8)			(505.8)
		-		(11.0)		-		(4,278.6)			-			(4,289.6)		(4,429.7)
	31st December 2016
	Assets
	Other investments	-		-		52.2		-			-			52.2		52.2
	Debtors	276.3		44.5		-		-			11.8			332.6		332.6
	Bank balances	1,908.9		-		-		-			-			1,908.9		1,908.9
		2,185.2		44.5		52.2		-			11.8			2,293.7		2,293.7
	Liabilities
	Borrowings	-		-		-		(3,916.4)			-			(3,916.4)		(3,988.3)
	Creditors excluding
	non-financial
	liabilities	-		(7.6)		-		(533.3)			-			(540.9)		(540.9)
		-		(7.6)		-		(4,449.7)			-			(4,457.3)		(4,529.2)

Fair value estimation

(i) Financial instruments that are measured at fair value

    For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements are disclosed by level of the following fair value measurement hierarchy:

(a)  Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')

The fair value of listed securities, which are classified as available-for-sale, is based on quoted prices in active markets at the balance sheet date.  The quoted market price used for listed investments held by the Group is the current bid price.

(b)  Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly ('observable current market transactions')

The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date.  The rates for interest rate swaps and forward foreign exchange contracts are calculated by reference to market interest rates and foreign exchange rates.

There were no changes in valuation techniques during the six months ended 30th June 2017 and the year ended 31st December 2016.

The table below analyses financial instruments carried at fair value at 30th June 2017 and 31st December 2016, by the levels in the fair value measurement hierarchy:

			Quoted prices in active markets US$m	Observable current  market transactions US$m			Total US$m
	30th June 2017
	Assets
	Available-for-sale financial assets
	- listed securities		88.4		-		88.4
	Derivative designated at fair value
	- through other comprehensive income		-		3.2		3.2
	- through profit and loss		-		17.0		17.0
			88.4		20.2		108.6
	Liabilities
	Derivative designated at fair value
	- through other comprehensive income		-		(7.2)		(7.2)
	- through profit and loss		-		(3.8)		(3.8)
			-		(11.0)		(11.0)
	31st December 2016
	Assets
	Available-for-sale financial assets
	- listed securities		52.2		-		52.2
	Derivative designated at fair value
	- through other comprehensive income		-		28.0		28.0
	- through profit and loss		-		16.5		16.5
			52.2		44.5		96.7
	Liabilities
	Derivative designated at fair value
	- through profit and loss		-		(7.6)		(7.6)

There were no transfers among the two categories during the six months ended 30th June 2017 and the year ended 31st December 2016.

(ii)   Financial instruments that are not measured at fair value

The fair values of current debtors, bank balances, current creditors and current borrowings are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.

The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates.

13. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Total capital commitments at 30th June 2017 and 31st December 2016 amounted to US$819.2 million and US$623.0 million, respectively.

Various Group companies are involved in litigation arising in the ordinary course of their respective businesses.  Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.

14. RELATED PARTY TRANSACTIONS

The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate holding company is Jardine Matheson Holdings Limited ('JMH').  Both companies are incorporated in Bermuda.

In the normal course of business, the Group has entered into a variety of transactions with the subsidiaries, associates and joint ventures of JMH ('Jardine Matheson group members').  The more significant of these transactions are described below:

Management fee 

The management fee payable by the Group, under an agreement entered into in 1995, to Jardine Matheson Limited ('JML') in 2017 was US$2.6 million (2016: US$2.0 million), being 0.5% per annum of the Group's underlying profit in consideration for management consultancy services provided by JML, a wholly-owned subsidiary of JMH.

Property and other services 

The Group rented properties to Jardine Matheson group members.  Gross rents on such properties in 2017 amounted to US$10.3 million (2016: US$10.0 million).

The Group provided consultancy services to Jardine Matheson group members in 2017 amounting to US$0.2 million (2016: US$0.2 million).

Jardine Matheson group members provided property maintenance and other services to the Group in 2017 in aggregate amounting to US$22.2 million (2016: US$20.0 million).

Hotel management services 

Jardine Matheson group members provided hotel management services to the Group in 2017 amounting to US$1.2 million (2016: US$1.1 million).

Outstanding balances with associates and joint ventures

Amounts of outstanding balances with associates and joint ventures are included in debtors and creditors as appropriate.  The amounts are not material.

Hongkong Land Holdings Limited

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control.  The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain unchanged:

•    Economic Risk and Financial Risk

•    Commercial Risk

•    Regulatory and Political Risk

•    Terrorism, Pandemic and Natural Disasters

For greater detail, please refer to page 74 of the Company's Annual Report for 2016, a copy of which is available on the Company's website www.hkland.com.

Responsibility Statement

The Directors of the Company confirm to the best of their knowledge that:

(a) the condensed financial statements have been prepared in accordance with IAS 34; and

(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.

For and on behalf of the Board

Robert Wong

Simon Dixon

Directors

	The interim dividend of US¢6.00 per share will be payable on 19th October 2017 to shareholders on the register of members at the close of business on 25th August 2017.  The shares will be quoted ex-dividend on the Singapore Exchange and the London Stock Exchange on 23rd and 24th August 2017, respectively.  The share registers will be closed from 28th August to 1st September 2017, inclusive. Shareholders will receive their cash 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 for the 2017 interim dividend by notifying the United Kingdom transfer agent in writing by 29th September 2017.  The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 4th October 2017. Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in sterling only as calculated above.  Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive their cash dividends in United States dollars unless they elect, through CDP, to receive Singapore dollars. Shareholders on the Singapore branch register who wish to deposit their shares into the CDP system by the dividend record date, being 25th August 2017, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar, no later than 5.00 p.m. (local time) on 24th August 2017.

Hongkong Land Group

Hongkong Land is a listed leading property investment, management and development group.  Founded in 1889, Hongkong Land's business is built on excellence, integrity and partnership.

The Group owns and manages almost 800,000 sq. m. of prime office and luxury retail property in key Asian cities, principally in Hong Kong and Singapore.  Hongkong Land's properties attract the world's foremost companies and luxury brands.

Its Hong Kong Central portfolio represents some 450,000 sq. m. of prime property.  It has a further 165,000 sq. m. of prestigious office space in Singapore mainly held through joint ventures, and a 50% interest in a leading office complex in Central Jakarta.  The Group also has a number of high quality residential and mixed-use projects under development in cities across Greater China and Southeast Asia, including a luxury retail centre at Wangfujing in Beijing.  In Singapore, its subsidiary, MCL Land, is a well-established residential developer.

Hongkong Land Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore.  The Group's assets and investments are managed from Hong Kong by Hongkong Land Limited.  Hongkong Land is a member of the Jardine Matheson Group.

- end -

For further information, please contact:

Hongkong Land Limited
Robert Wong	(852) 2842 8428
Simon Dixon	(852) 2842 8101
Brunswick Group Limited
Marie Filotti	(852) 3512 5059

As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders.  The Half-Yearly Results announcement will remain available on the Company's website, www.hkland.com, together with other Group announcements.

 

END

 

 

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