Far East Consortium (35) H1 2026 earnings summary

Executive summary

• Adjusted revenue for the interim period was HK$4.94 billion, with adjusted cash profit at HK$203 million, mainly driven by property development settlements in the UK and Australia.

• Net loss attributable to shareholders was HK$988 million, primarily due to significant non-cash impairment losses on properties, deposits, and JV/associate investments.

• Gross profit margin improved to 34.8% from 31.2% year-over-year, driven by higher margins in property sales.

• Adjusted net gearing ratio decreased to 64.9% as at 30.09.2025, reflecting debt reduction and asset disposals.

• Strategic focus remained on monetising non-core assets, deleveraging, and enhancing liquidity.

Financial highlights

• Revenue declined 27.4% year-over-year to HK$3.8 billion due to fewer property development completions.

• Adjusted cash profit surged 509.8% to HK$203 million, while finance costs fell 24.9% to HK$373 million.

• No interim dividend declared for 1H FY2026, compared to 1.0 HK cent in the prior year.

• Net debt reduced by HK$1.25 billion to HK$20.2 billion; total bank loans, notes, and bonds reduced by HK$1,426 million to HK$23,945 million.

• Adjusted net asset value per share decreased 2.0% to HK$9.13.

Outlook and guidance

• Further reduction in net gearing targeted through continued asset disposals and project completions.

• Four new hotels are expected to open in the next 12 months, supporting recurring income growth.

• Pre-sales and contracted sales of HK$9.3 billion provide strong cash flow visibility, with HK$2.7 billion expected to be recognized in the second half.

• Active residential development pipeline of HK$61.8 billion GDV supports revenue growth for 6–8 years.

• No urgent need for land replenishment; selective approach to new acquisitions.