TIDMAGP
RNS Number : 7771W
Asian Growth Properties Limited
21 August 2015
21 August 2015
Asian Growth Properties Limited
Immediate Release
Results for the period ended 30 June 2015
Asian Growth Properties Limited (the "Company") (AIM Stock Code:
AGP), the Hong Kong based China property development and investment
company, announces its unaudited condensed consolidated results for
the period ended 30 June 2015 as follows:
Financial Highlights
n Profit attributable to the Company's shareholders of HK$274.7
million (GBP22.6 million) (2014: HK$297.5 million (GBP22.4
million))
n Profit attributable to the Company's shareholders (excluding
revaluation surplus net of deferred tax) was HK$39.2 million
(GBP3.2 million) (2014: HK$65.1 million (GBP4.9 million))
n Earnings per share for profit attributable to the Company's
shareholders of HK31.0 cents (2.6 pence) (2014: HK33.6 cents (2.5
pence))
n Net asset value per share attributable to the Company's
shareholders as at 30 June 2015 of HK$15.2 (125.3 pence) (31
December 2014: HK$14.8 (122.7 pence))
n Geographical location of the Group's property assets were as
follows:
30 June 2015 31 December 2014
---------- ---------------------- ----------------------
Hong Kong HK$10,404.5 million HK$10,177.4 million
(GBP857.3 million) (GBP843.7 million)
Mainland HK$4,764.4 million HK$4,635.7 million
China (GBP392.6 million) (GBP384.3 million)
---------- ---------------------- ----------------------
Total HK$15,168.9 million HK$14,813.1 million
(GBP1,249.9 million) (GBP1,228.0 million)
========== ====================== ======================
n Gearing ratio of 9.1% (31 December 2014: 9.3%)
Operational Highlights
n Stable gross rental income generated from Dah Sing Financial
Centre in Hong Kong and its occupancy rate remains high.
n The hotel operation results of Crowne Plaza Hong Kong Causeway
Bay were in line with the weaker hotel business environment
starting especially in the second quarter.
n Major mixed use development projects in Chengdu and Kaifeng,
Mainland China are progressing. Site formation works for Phase I of
Chengdu project have been completed and superstructure works for
Phase I of Kaifeng project are in progress.
Notes:
1. Figures in Pounds Sterling are translated from Hong Kong
dollars based upon the exchange rates prevailing on the latest
practicable business day of the respective accounting periods. The
relevant exchange rates adopted are stated as follows:
For 30 June GBP1 = HK$12.1357
2015:
For 31 December GBP1 = HK$12.0627
2014:
For 30 June GBP1 = HK$13.2822
2014:
2. For the Company's shareholders' information, the exchange
rate on 20 August 2015 was GBP1 = HK$12.1272
Miscellaneous
The results included in this announcement are extracted from the
unaudited condensed consolidated financial statements of the
Company for the six months ended 30 June 2015, which have been
approved by the Board of Directors on 21 August 2015.
The 2015 Interim Report is expected to be posted to the
Company's shareholders and holders of depositary interests in late
September 2015.
For further information, please contact:
Lu Wing Chi TEL: +852 2828
6363
Executive Director
Asian Growth Properties
Limited
Richard Gray TEL: +44 207 886
2500
Andrew Potts
Panmure Gordon (UK) Limited
(Nominated Advisor)
Attached:-
1. Chairman's Review;
2. Executive Directors' Review;
3. Condensed Consolidated Statement of Profit or Loss;
4. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income;
5. Condensed Consolidated Statement of Financial Position;
6. Condensed Consolidated Statement of Changes in Equity;
7. Condensed Consolidated Statement of Cash Flows; and
8. Notes to the Condensed Consolidated Financial Statements.
This announcement can also be viewed on the Company's website
at:
http://www.asiangrowth.com/html/eng/news.asp
CHAIRMAN'S REVIEW
I am pleased to present the unaudited condensed consolidated
financial results of Asian Growth Properties Limited ("AGP" or the
"Company", together with its subsidiaries, the "Group") for the
first six months of 2015 to the shareholders of the Company.
Results
AGP reported a profit attributable to the Company's shareholders
of HK$274.7 million (GBP22.6 million) for the six months ended 30
June 2015 (2014: HK$297.5 million (GBP22.4 million)). The reported
profit included a revaluation surplus on investment properties net
of deferred taxation of HK$235.5 million (GBP19.4 million) (2014:
HK$232.4 million (GBP17.5 million)). By excluding the net effect of
such surplus, the Group's net profit attributable to the Company's
shareholders was HK$39.2 million (GBP3.2 million) (2014: HK$65.1
million (GBP4.9 million)).
As at 30 June 2015, the Group's equity attributable to the
Company's shareholders amounted to HK$13,429.2 million (GBP1,106.6
million) (31 December 2014: HK$13,148.1 million (GBP1,090.0
million)). The net asset value per share attributable to the
Company's shareholders as at 30 June 2015 was HK$15.2 (125.3 pence)
as compared with HK$14.8 (122.7 pence) as at 31 December 2014.
Figures in Pounds Sterling are translated from Hong Kong dollars
based upon the exchange rates prevailing on the latest practicable
business day of the respective accounting periods.
Operations
During the period ended 30 June 2015, the Group has continued
the development of various property projects in Hong Kong and
Mainland China.
The rental income from investment properties situated in both
Hong Kong and Mainland China continue to provide stable returns to
the Group. Crowne Plaza Hong Kong Causeway Bay's performance
dropped significantly in the second quarter which was in line with
the weaker hotel business environment in Hong Kong arising from,
among other things, the tense relationship between Hong Kong
residents and China visitors during the period and the adjustment
of multiple-entry endorsements for Shenzhen residents under the
Individual Visit Scheme. Nevertheless, the hotel was able to
achieve a relatively better performance among its primary
competitors.
For details of the Group's operations, please refer to the
Executive Directors' Review.
Outlook
In the year ahead, the global economy remains uncertain amid
volatility in the global financial markets. While the US economy
continued its recovery trend, the economic growth of the Eurozone
and Japan were below the desired level. The timing and quantum of
the interest rate rise of the US remain uncertain and are affected
by both the US's domestic economic performance and the volatility
of global economic conditions.
China's economy is growing at a moderate but steady pace. The
government of Mainland China has taken various measures in order to
sustain the growth. The government in the past few months has
relaxed certain tax regulations and cut down payments for
second-home buyers from 60% to 40%. The government's policy, which
included four cuts to benchmark interest rates since November 2014,
also helped boost property sales and improve the sentiment of the
residential real estate market.
Interim Dividend
The Board does not propose the payment of an interim dividend
for the period ended 30 June 2015 (2014: Nil).
Acknowledgement
The Board would like to take this opportunity to thank the
executive and management team for the execution of the Board's
strategy and their ongoing support.
Richard Prickett
Non-Executive Chairman
Hong Kong, 21 August 2015
EXECUTIVE DIRECTORS' REVIEW
FINANCIAL SUMMARY
Turnover for the period ended 30 June 2015 amounted to HK$308.6
million (GBP25.4 million) (2014: HK$327.3 million (GBP24.6
million)). The turnover was principally attributable to the
recognition of rental income from investment properties and revenue
from hotel operation.
Profit attributable to the Company's shareholders for the period
amounted to HK$274.7 million (GBP22.6 million) (2014: HK$297.5
million (GBP22.4 million)), equivalent to a basic earnings per
share of HK31.0 cents (2.6 pence) (2014: HK33.6 cents (2.5 pence)).
The reported profit included a revaluation surplus on investment
properties net of deferred taxation of HK$235.5 million (GBP19.4
million) (2014: HK$232.4 million (GBP17.5 million)). By excluding
the net effect of such surplus, the Group's net profit attributable
to the Company's shareholders was HK$39.2 million (GBP3.2 million)
(2014: HK$65.1 million (GBP4.9 million)), equivalent to HK4.4 cents
(0.4 pence) (2014: HK7.3 cents (0.5 pence)) per share.
As at 30 June 2015, the Group's equity attributable to the
Company's shareholders amounted to HK$13,429.2 million (GBP1,106.6
million) (31 December 2014: HK$13,148.1 million (GBP1,090.0
million)). The net asset value per share attributable to the
Company's shareholders as at 30 June 2015 was HK$15.2 (125.3 pence)
as compared with HK$14.8 (122.7 pence) as at 31 December 2014.
For the Company's shareholders' information, figures in Pounds
Sterling are translated from Hong Kong dollars based upon the
exchange rates prevailing on the latest practicable business day of
the respective accounting periods and the relevant exchange rates
adopted are stated as follows:
For 30 June 2015: GBP1 = HK$12.1357
For 31 December 2014: GBP1 = HK$12.0627
For 30 June 2014: GBP1 = HK$13.2822
BUSINESS REVIEW
Property Investment and Development
The Group continues to focus on its development and investment
projects in Hong Kong and Mainland China. It is the Group's
approach to review and optimise the project portfolios from time to
time. The Group's core projects located in Hong Kong and Mainland
China are listed below.
Hong Kong
(MORE TO FOLLOW) Dow Jones Newswires
August 21, 2015 11:36 ET (15:36 GMT)
The office leasing market was stable during the period. With
several tenancies of Dah Sing Financial Centre, a 39-storey
commercial building, being renewed at market rates, rental income
received during the period increased. The occupancy rate of Dah
Sing Financial Centre remains at a high level of approximately 93%
as at 30 June 2015 (31 December 2014: 94%).
The negotiation of the land premium with the Government for the
development project at Fo Tan remains in progress. This development
project has a site area of approximately 20,000 square metres and
envisages, among other facilities, residential units, car parks,
educational facilities and a bus terminus. The foundation work of
the project has been completed and advanced pile cap is in
progress.
Mainland China
Chengdu, Sichuan Province
During the period under review, the occupancy rate for the two
30-storey office towers of Plaza Central remained at a high level
and its retail podium with a gross floor area of about 29,000
square metres is fully let principally to Chengdu New World
Department Store on a long-term lease. As at 30 June 2015, the
aggregate occupancy rate for the two office towers and the retail
podium was approximately 86% (31 December 2014: 89%). Leasing
activities for the remaining areas of Plaza Central continue.
The shopping arcade of New Century Plaza with a gross floor area
of about 16,300 square metres was fully let to a hotel on a
long-term lease in late 2014.
The master layout plan of the Longquan project (known as
"Chengdu Nova City"), which has a site area of 506,000 square
metres, was approved by the local government in January 2014.
Preliminary site works and site formation works for Phase I of the
project have been completed. Superstructure works for Phase I are
now scheduled to commence in the third quarter of 2015.
Kaifeng, Henan Province
The Kaifeng project, known as "Kaifeng Nova City", is situated
in Zheng-Kai District, a new town in Kaifeng and envisages a
shopping mall, premium offices, exhibition hall, hotel, serviced
apartments and residential towers. This project has a site area of
735,000 square metres and for providing a better living
environment, the gross floor area of the development will vary from
2,000,000 to 2,500,000 square metres only. The master layout plan
has been approved by the local government and foundation work for
Phase I of the residential has been completed. The superstructure
works for Phase IB of the residential are in progress. The
superstructure works and landscape works of Phase IA of the
residential are scheduled to complete in the fourth quarter of
2015. Pre-sale consent for Phase IA was issued and 50% of the
residential units was launched to the market. VIP sales program is
being conducted.
Guangzhou, Guangdong Province
As at 30 June 2015, the occupancy rate of the 14-storey office
tower of Westmin Plaza Phase II of about 16,100 square metres was
98% with more than one-third of the total office space being leased
to AIA (31 December 2014: 100%). Leasing activities for the
3-storey shopping arcade of Westmin Plaza Phase II with a total
gross floor area of about 26,400 square metres are in progress.
Huangshan, Anhui Province
The project in Huangshan has a site area of about 337,000 square
metres comprising of development land of about 117,000 square
metres and landscape land of 220,000 square metres. The master
layout plan for the development of the project comprising a hotel,
serviced apartments and resort villas in the integrated resort site
has been approved by the local government and site formation work
for Phase I of the project has been completed. Phase I substructure
works are in progress.
Chi Shan, Nanjing, Jiangsu Province
The Group has established two 51%-owned joint venture companies
to participate in the tenant relocation arrangements and excavation
and infrastructure works on certain pieces of land in Chi Shan. The
Group intends to acquire such lands through land auctions by
different stages.
Hotel Operation
Crowne Plaza Hong Kong Causeway Bay is a 29-storey five-star
hotel comprising 263 guest rooms with ancillary facilities and is
managed by the InterContinental Hotels Group. Its performance was
in line with the weaker hotel business environment starting
especially in the second quarter, however, the hotel will strive to
gain market share in the challenging market situation.
WORKING CAPITAL AND LOAN FACILITIES
As at 30 June 2015, the Group's total cash balance was
HK$2,581.2 million (GBP212.7 million) (31 December 2014: HK$2,646.8
million (GBP219.4 million)) and unutilised facilities were HK$830.0
million (GBP68.4 million) (31 December 2014: HK$845.0 million
(GBP70.1 million)).
The gearing ratio as at 30 June 2015, calculated on the basis of
net interest bearing debts minus cash and restricted and pledged
deposits as a percentage of total property assets, was 9.1% (31
December 2014: 9.3%).
As at 30 June 2015, the maturity of the Group's outstanding
borrowings was as follows:
30 June 2015 31 December 2014
HK$' million HK$' million
---------------- ------------------------- ----------------
Due
Within 1 year 1,703.7 438.4
1-2 years 158.4 1,385.9
3-5 years 1,085.5 1,139.1
Over 5 years 1,033.5 1,078.7
---------------- ------------------------- ----------------
3,981.1 4,042.1
Less: Front-end
fee (26.3) (22.4)
---------------- ------------------------- ----------------
3,954.8 4,019.7
================ ========================= ================
Pledge of Assets
For the Company's subsidiaries operating in Hong Kong and
Mainland China, the total bank loans drawn as at 30 June 2015
amounted to HK$3,981.1 million (31 December 2014: HK$4,042.1
million) which comprised secured bank loans of HK$3,881.1 million
(31 December 2014: HK$3,942.1 million) and unsecured bank loans of
HK$100.0 million (31 December 2014: HK$100.0 million). The secured
bank loans were secured by properties valued at HK$12,322.8 million
(31 December 2014: HK$12,086.4 million) and note receivables of
HK$54.3 million (31 December 2014: HK$54.3 million).
Treasury Policies
The Group adheres to prudent treasury policies. As at 30 June
2015, all of the Group's borrowings were raised through its
wholly-owned or substantially controlled subsidiaries on a
non-recourse basis.
International Financial Reporting Standards ("IFRS")
The Group has adopted IFRS and the unaudited condensed
consolidated financial statements accompanying this Review have
been prepared in accordance with IFRS.
OUTLOOK
In Mainland China, GDP growth of 7.0% in the first half year of
2015 was reported. Mainland China home prices rose for a second
month in June 2015, on a monthly basis, indicating that
government's efforts to boost the property market have started to
gain traction. Overall average new home prices increased 0.56% in
June 2015 versus May 2015, which is higher than the 0.45% increase
in May 2015, the first monthly increase since April 2014. Such
second month of increasing prices is a sign of bottoming out for
the property market.
The Hong Kong economy is also expected to continue to grow
moderately in 2015, given rising household income from favourable
employment conditions and steady growth in domestic consumption.
The Grade-A office leasing market remained positive with continual
expansion demand coming from the Mainland financial institutions,
fund and asset management companies. In residential markets,
housing prices in Hong Kong reached a record high in May 2015 with
sales volume continuing to rebound, especially in the primary
market, despite the government's series of property market cooling
measures. Having said that, we remain cautious that Hong Kong's
property market could be facing a downturn in the coming years,
given the government's measures to an increase in housing supply
and uncertainties in light of a potential rise in interest
rates.
Negotiation of the land premium of our Fo Tan project is still
in progress. This is a lengthy process, and we are awaiting a
revised land premium to be offered from the Hong Kong Lands
Department. The overall hotel industry business in Hong Kong was
soft in the first half of 2015 as a result of, among other things,
the tense relationship between Hong Kong residents and China
visitors during the period and the adjustment of multiple-entry
endorsements for Shenzhen residents under the Individual Visit
Scheme. Crowne Plaza Hong Kong Causeway Bay's performance dropped
significantly in the second quarter which was in line with the
weaker hotel business environment in Hong Kong. Nevertheless, the
hotel was able to achieve a relatively better performance among its
primary competitors. For the second half of 2015, the general hotel
market is still expected to be challenging, but the hotel is
striving to gain market share in this challenging market
situation.
In respect to our development projects in Mainland China, Phase
IA of Kaifeng project with 444 residential units is still under
construction, of which 128 units were sold in the pre-sale. The
sales of these units will be recognized as revenue upon obtaining
an occupation permit which is expected for the end of this year. In
Chengdu, the master layout plan of Longquan project was approved
and superstructure works are being planned to commence in the third
quarter of 2015.
On behalf of the Executive Directors
Lu Wing Chi
Executive Director
Hong Kong, 21 August 2015
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
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FOR THE SIX MONTHS ENDED 30 June 2015
Six months ended
30 June
NOTES 2015 2014
HK$'000 HK$'000
(unaudited) (unaudited)
Revenue 4 308,568 327,274
Interest income 8,677 7,590
Other income 8,315 4,693
Costs:
Property and related costs 5 (25,550) (22,868)
Staff costs (43,656) (43,176)
Depreciation and amortisation (38,900) (37,317)
Other expenses 6 (101,097) (109,246)
---------------- ----------------
(209,203) (212,607)
---------------- ----------------
Profit from operations
before fair value changes
on investment properties 116,357 126,950
Fair value changes on
investment properties 238,001 240,840
---------------- ----------------
Profit from operations
after fair value changes
on investment properties 354,358 367,790
Finance costs 7 (53,935) (41,366)
---------------- ----------------
Profit before taxation 8 300,423 326,424
Income tax expense 9 (27,926) (31,469)
---------------- ----------------
Profit for the period 272,497 294,955
========= =========
Attributable to:
Company's shareholders 274,712 297,514
Non-controlling interests (2,215) (2,559)
---------------- ----------------
272,497 294,955
========= =========
HK cents HK cents
Earnings per share for
profit attributable to
the Company's shareholders 10
- Basic 31.0 33.6
========= =========
Earnings per share excluding
fair value changes on
investment properties
net of deferred tax
* Basic 10 4.4 7.3
========= =========
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 June 2015
Six months ended
30 June
2015 2014
HK$'000 HK$'000
(unaudited) (unaudited)
Profit for the period 272,497 294,955
---------------- ----------------
Other comprehensive income (expense):
Item that may be subsequently
reclassified to profit or loss:
Exchange differences arising
on translation of foreign operations 6,419 (41,206)
---------------- ----------------
Total comprehensive income for
the period 278,916 253,749
========= =========
Total comprehensive income (expense)
attributable to:
Company's shareholders 281,116 256,794
Non-controlling interests (2,200) (3,045)
---------------- ----------------
278,916 253,749
========= =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 June 2015
NOTES 30.6.2015 31.12.2014
HK$'000 HK$'000
(unaudited) (audited)
Non-current assets
Investment properties 12 10,597,270 10,358,285
Property, plant and equipment 1,412,954 1,437,456
Properties for development 13 1,248,328 1,248,432
loan receivables 3,999 4,118
Note receivables 54,265 54,289
Other receivables 14 391,327 391,173
Other financial assets 7,764 7,764
Restricted bank deposits 6,341 6,338
---------------- ----------------
13,722,248 13,507,855
---------------- ----------------
Current assets
Properties held for sale
Completed properties 482,942 482,752
Properties under development 1,459,708 1,322,290
Other inventories 1,134 1,333
loan receivables 362 362
Trade receivables, deposits
and prepayments 15 152,412 150,562
Tax recoverable 4,278 4,548
Amounts due from non-controlling
interests 16 691 70
Bank balances and cash 2,574,906 2,640,466
---------------- ----------------
4,676,433 4,602,383
---------------- ----------------
Current liabilities
Payables, deposits and
accrued charges 17 326,374 301,984
Sales deposits 94,145 64,389
Tax liabilities 116,426 101,455
Amounts due to non-controlling
interests 16 99,544 99,505
Bank borrowings - due
within one year 18 1,699,627 436,569
---------------- ----------------
2,336,116 1,003,902
---------------- ----------------
Net current assets 2,340,317 3,598,481
---------------- ----------------
Total assets less current
liabilities 16,062,565 17,106,336
========= =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION -
continued
AT 30 June 2015
NOTES 30.6.2015 31.12.2014
HK$'000 HK$'000
(unaudited) (audited)
Capital and reserves
Share capital 19 345,204 345,204
Reserves 13,084,040 12,802,924
---------------- ----------------
Equity attributable to
the Company's shareholders 13,429,244 13,148,128
Non-controlling interests 53,340 55,540
---------------- ----------------
Total equity 13,482,584 13,203,668
---------------- ----------------
Non-current liabilities
Bank borrowings - due
after one year 18 2,255,219 3,583,165
Deferred taxation 20 324,762 319,503
---------------- ----------------
2,579,981 3,902,668
---------------- ----------------
16,062,565 17,106,336
========= =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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August 21, 2015 11:36 ET (15:36 GMT)
FOR THE SIX MONTHS ENDED 30 JUNE 2015
' Attributable to the Company's
shareholders
--------------------------------------------------------------------------------------------------------------
Non-
Share Share Translation Other Retained controlling
capital premium reserve reserves profits Total interests Total
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
At 1 January
2014 (audited) 345,204 4,836,225 527,655 766,370 5,983,231 12,458,685 57,706 12,516,391
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Profit for
the period - - - - 297,514 297,514 (2,559) 294,955
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Exchange
differences
arising on
translation
of foreign
operations - - (40,720) - - (40,720) (486) (41,206)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Other
comprehensive
expense for
the period - - (40,720) - - (40,720) (486) (41,206)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total
comprehensive
(expense)
income for
the period - - (40,720) - 297,514 256,794 (3,045) 253,749
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 30 June
2014
(unaudited) 345,204 4,836,225 486,935 766,370 6,280,745 12,715,479 54,661 12,770,140
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Profit for
the period - - - - 405,587 405,587 1,786 407,373
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Exchange
differences
arising on
translation
of foreign
operations - - 27,062 - - 27,062 308 27,370
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Other
comprehensive
income for
the period - - 27,062 - - 27,062 308 27,370
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total
comprehensive
income for
the period - - 27,062 - 405,587 432,649 2,094 434,743
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Dividends
paid to
non-controlling
interests - - - - - - (1,215) (1,215)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 December
2014 (audited) 345,204 4,836,225 513,997 766,370 6,686,332 13,148,128 55,540 13,203,668
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Profit for
the period - - - - 274,712 274,712 (2,215) 272,497
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Exchange
differences
arising on
translation
of foreign
operations - - 6,404 - - 6,404 15 6,419
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Other
comprehensive
income for
the period - - 6,404 - - 6,404 15 6,419
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total
comprehensive
income
(expense)
for the period - - 6,404 - 274,712 281,116 (2,200) 278,916
-------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
At 30 June
2015
(unaudited) 345,204 4,836,225 520,401 766,370 6,961,044 13,429,244 53,340 13,482,584
======== ======== ======== ======== ======== ======== ======== ========
Other reserves comprise (i) a discount on acquisition/assumption
of certain assets and liabilities from the intermediate holding
company, S E A Holdings Limited ("SEA") and the excess of the
consideration over the market closing price of the shares issued
for the acquisition. The amounts attributable to those assets and
liabilities derecognised in subsequent years will be recognised in
profit or loss; and (ii) the excess of the consideration paid for
acquisition of an additional interest in a subsidiary from a
non-controlling shareholder over the carrying amount of the
non-controlling interests acquired.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 June 2015
Six months ended
30 June
2015 2014
HK$'000 HK$'000
(unaudited) (unaudited)
Net cash from operating activities 31,863 68,536
---------------- ----------------
Investing activities
Purchase of property, plant
and equipment (751) (771)
Net proceeds received on disposal
of property, plant and equipment - 30
Acquisition of and additional
costs on properties for development (13,044) (29,520)
Increase in bank deposits (431,251) (214,166)
Bank deposits refunded 309,380 455,340
Increase in other receivables - (2,826)
Decrease in loan receivables 119 1,242
Interest received 12,418 15,697
---------------- ----------------
Net cash (used in) from investing
activities (123,129) 225,026
---------------- ----------------
Financing activities
Draw down of bank loans 150,000 1,631,697
Repayments of bank loans (211,114) (1,165,881)
Payment of front-end fee (7,000) (7,500)
Advances from non-controlling
interests - 2,837
Repayment of advances from non-controlling
interests (621) (635)
---------------- ----------------
Net cash (used in) from financing
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activities (68,735) 460,518
---------------- ----------------
Net (decrease) increase in cash
and cash equivalents (160,001) 754,080
Cash and cash equivalents at
beginning of period 2,296,618 1,304,667
Effect of foreign exchange rate
changes 4,750 (6,192)
---------------- ----------------
Cash and cash equivalents at
end of period 2,141,367 2,052,555
========= =========
Represented by:
Bank balance and cash 2,574,906 2,266,721
Less: Fixed deposits with original
maturity date more than 3 months (431,251) (214,166)
Less: Guarantee deposit (2,288) -
---------------- ----------------
2,141,367 2,052,555
========= =========
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 June 2015
1. GENERAL
The Company is a public company incorporated in the British
Virgin Islands with limited liability and its shares are admitted
for trading on the AIM Market of London Stock Exchange plc.
The Company acts as an investment holding company. The principal
subsidiaries of the Company are engaged in property investment,
property development and the operation of a hotel.
2. BASIS OF PREPARATION
The condensed consolidated financial statements have been
prepared in accordance with International Accounting Standard
("IAS") 34 "Interim Financial Reporting" issued by the
International Accounting Standards Board (the "IASB").
3. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been
prepared on the historical cost basis except for investment
properties, which are measured at fair values, as appropriate.
Except as described below, the accounting policies and methods
of computation used in the condensed consolidated financial
statements for the six months ended 30 June 2015 are the same as
those followed in the preparation of the Group's annual financial
statements for the year ended 31 December 2014.
In the current interim period, the Group has applied, for the
first time, the following amendments to International Financial
Reporting Standards ("IFRSs") issued by the IASB that are relevant
for the preparation of the Group's condensed consolidated financial
statements.
Amendments to IAS 19 Defined Benefit Plans: Employee Contributions
Amendments to IFRSs Annual Improvements to IFRSs 2010 - 2012 Cycle
Amendments to IFRSs Annual Improvements to IFRSs 2011 - 2013 Cycle
The application of the above amendments to IFRSs in the current
interim period has had no material effect on the amounts reported
in these condensed consolidated financial statements and/or
disclosures set out in these condensed consolidated financial
statements.
4. SEGMENT INFORMATION
Information reported to the executive directors of the Company,
being the chief operating decision makers, for the purposes of
resource allocation and assessment of segment performance is mainly
focused on the property development, property investment and hotel
operation. No operating segments identified by the chief operating
decision markers have been aggregated in arriving at the reportable
segments of the Group.
Property investment and development activities are in Hong Kong
and the People's Republic of China (the "PRC") whereas the hotel
operation is in Hong Kong.
The following is an analysis of the Group's revenue and results
by reportable segment:
Six months ended 30 June 2015
Property Property Hotel
development investment operation Consolidated
HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External sales - 195,817 112,751 308,568
========= ========= ========= =========
SEGMENT RESULTS
Segment (loss)
profit (66,838) 392,146 23,460 348,768
========= ========= =========
Interest income 8,677
Corporate income
less expenses (3,087)
Finance costs (53,935)
----------------
Profit before
taxation 300,423
=========
Six months ended 30 June 2014
Property Property Hotel
development investment operation Consolidated
HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External sales 520 195,311 131,443 327,274
========= ========= ========= =========
SEGMENT RESULTS
Segment (loss)
profit (64,131) 388,848 38,593 363,310
========= ========= =========
Interest income 7,590
Corporate income
less expenses (3,110)
Finance costs (41,366)
----------------
Profit before
taxation 326,424
=========
4. SEGMENT INFORMATION - continued
Segment profit of the property investment division for the six
months ended 30 June 2015 included an increase in fair value of
investment properties of HK$238,001,000 (2014: HK$240,840,000).
The Group does not allocate interest income, corporate income
less expenses and finance costs to individual reportable segment
profit or loss for the purposes of resource allocation and
performance assessment by the chief operating decision makers.
The accounting policies adopted in preparing the reportable
segment information are the same as the Group's accounting
policies.
No segment assets and liabilities are presented as the
information is not reportable to the chief operating decision
makers in the resource allocation and assessment of
performance.
5. PROPERTY AND RELATED COSTS
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Cost of properties sold
and related expenses - 613
Selling and marketing expenses 3,834 1,116
Direct operating expenses
on investment properties 21,716 21,139
---------------- ----------------
25,550 22,868
========= =========
6. OTHER EXPENSES
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Included in other expenses
are:
Fees paid to a related company
(note 22 (a)) 46,221 46,522
Less: Amount capitalised
to property development
project (7,354) (7,349)
---------------- ----------------
38,867 39,173
Hotel operating expenses 30,226 32,491
Legal and professional fees 2,808 2,538
========= =========
7. FINANCE COSTS
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Interest on:
Bank borrowings wholly repayable
within 5 years 26,566 19,095
Bank borrowings not wholly
repayable within 5 years 31,027 22,430
---------------- ----------------
57,593 41,525
Less: Amount capitalised
to property development
project (7,699) (3,934)
---------------- ----------------
49,894 37,591
Front end fee 3,053 2,510
Other charges 988 1,265
(MORE TO FOLLOW) Dow Jones Newswires
August 21, 2015 11:36 ET (15:36 GMT)
---------------- ----------------
53,935 41,366
========= =========
8. PROFIT BEFORE TAXATION
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Profit before taxation has
been arrived at after charging:
Net exchange loss 1,212 4,398
and crediting:
Interest earned on bank
deposits 8,527 7,424
Interest income from second
mortgage loans 123 166
========= =========
9. INCOME TAX EXPENSE
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Current tax
Hong Kong Profits Tax 16,260 14,906
PRC Enterprise Income Tax 6,533 5,631
---------------- ----------------
22,793 20,537
Deferred tax 5,133 10,932
---------------- ----------------
27,926 31,469
========= =========
Hong Kong Profits Tax is calculated at 16.5% of the estimated
assessable profits for each of the periods.
PRC Enterprise Income Tax is calculated at 25% of the estimated
assessable profits for each of the periods.
10. EARNINGS PER SHARE
The calculation of the basic earnings per share attributable to
the Company's shareholders is based on the following data:
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Earnings for the purpose
of basic earnings per share
Profit for the period attributable
to the Company's shareholders 274,712 297,514
========= =========
2015 2014
Number of ordinary shares
for the purpose of basic
earnings per share 886,347,812 886,347,812
========= =========
No diluted earnings per share is presented as the Company did
not have any potential ordinary shares in issue during both periods
or at the end of each reporting period.
10. EARNINGS PER SHARE - continued
For the purpose of assessing the performance of the Group, the
directors of the Company are of the view that the profit for the
period should be adjusted for the fair value changes on investment
properties recognised in profit or loss and the related deferred
taxation in arriving at the "adjusted profit attributable to the
Company's shareholders". A reconciliation of the adjusted earnings
is as follows:
Six months ended
30 June
2015 2014
HK$'000 HK$'000
Profit for the period attributable
to the Company's shareholders
as shown in the condensed
consolidated statement of
profit or loss 274,712 297,514
fair value changes on investment
properties (238,001) (240,840)
Deferred tax thereon 2,498 8,460
----------------- ----------------
Adjusted profit attributable
to the Company's shareholders 39,209 65,134
----------------- ----------------
Basic earnings per share
excluding fair value changes
on investment properties HK4.4 HK7.3
net of deferred tax cents cents
========== =========
The denominators used in the calculation of adjusted earnings
per share are the same as those detailed above.
11. DIVIDENDS
No dividends were paid, declared or proposed during the reported
period. The directors of the Company do not recommend the payment
of any interim dividend.
12. INVESTMENT PROPERTIES
In estimating the fair value of investment properties, the Group
uses market-observable data to the extent it is available. The
Group engages third party qualified valuers to perform the
valuation of the Group's investment properties. At the end of each
reporting period, the Group works closely with the qualified
external valuers to establish and determine the appropriate
valuation techniques and inputs to the model.
The fair values of investment properties as at 30 June 2015 and
31 December 2014 were arrived at on the basis of valuations carried
out at those dates by Savills Valuation and Professional Services
Limited ("Savills"), a firm of Chartered Surveyors not connected to
the Group, recognised by The Hong Kong Institute of Surveyors, that
has appropriate qualifications and recent experience in the
valuation of properties in the relevant locations.
12. INVESTMENT PROPERTIES - continued
The valuation, which conforms to the appropriate sections of
both the current Practice Statements, and United Kingdom Practices
Statements contained in the RICS Valuation Standards published by
the Royal Institution of Chartered Surveyors in the United Kingdom
(the "Red Book"), was arrived at by reference to market evidence of
transaction prices or by capitalisation of future rental which is
estimated by reference to comparable rental as available in the
relevant markets. In the valuation, the market rentals of all
lettable units as well as those of similar properties are made by
reference to the rentals achieved by the Group in the lettable
units as well as those of similar properties in the neighbourhood.
The capitalisation rate adopted is by reference to the yield rates
observed by the valuer for similar properties in the locality and
adjusted for the valuer's knowledge of factors specific to the
respective properties.
The resulting increase in the fair value of investment
properties of HK$238,001,000 (1.1.2014 - 30.6.2014: HK$240,840,000)
has been recognised directly in the condensed consolidated
statement of profit or loss.
13. PROPERTIES FOR DEVELOPMENT
The carrying amount represents the Group's interest in certain
pieces of land located in the PRC to be held for future
development.
The carrying amount is amortised on a straight-line basis over
the lease terms ranging from 40 to 70 years.
14. OTHER RECEIVABLES
At 30 June 2015, the Group had incurred a total amount of
RMB321,060,000 (31.12.2014: RMB321,060,000) equivalent to
HK$407,136,000 (31.12.2014: HK$406,976,000) for the tenant
relocation arrangements, excavation and infrastructure work on
certain pieces of land in Nanjing, the PRC. The amount, together
with further costs to complete the work, are wholly refundable from
the relevant PRC local government either by deduction against the
consideration payable if the Group is successful in bidding for the
land or out of the proceeds received by the relevant PRC local
government from another successful tenderer. The directors of the
Company estimated that, based on the Group's development plan, the
time schedule for auction of the relevant land will be initiated
before the end of 2016 and by then the full amount will be
recovered.
The balance of HK$391,327,000 (31.12.2014: HK$391,173,000)
represents the Hong Kong dollar equivalent of the present value of
the original amount of RMB321,060,000 (31.12.2014: RMB321,060,000)
expected to be recovered in 2016 discounted at the rate of 2% per
annum.
15. TRADE RECEIVABLES, DEPOSITS AND PREPAYMENTS
30.6.2015 31.12.2014
HK$'000 HK$'000
Trade receivables 8,353 10,603
Accrued income 102,512 99,415
Deposits and prepayments 41,547 40,544
---------------- ----------------
152,412 150,562
========= =========
Trade receivables mainly represent rental receivable from
tenants for the use of the Group's properties and receivables from
corporate customers and travel agents for the use of hotel
facilities. No credit is allowed to tenants. Rentals are payable
upon presentation of demand notes. An average credit period of 30
days is allowed to corporate customers and travel agents.
16. AMOUNTS DUE FROM/TO NON-CONTROLLING INTERESTS
(MORE TO FOLLOW) Dow Jones Newswires
August 21, 2015 11:36 ET (15:36 GMT)
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