Kerry Properties (683) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 was HK$5,040 million, down 8% year-over-year, mainly due to lower property sales and rental income, with profit attributable to shareholders dropping 55% to HK$788 million.

• Underlying profit, excluding one-off provisions and fair value changes, decreased 19% to HK$1,403 million.

• Interim dividend maintained at HK$0.40 per share.

• Contracted sales totaled HK$7,044 million, down 14% year-over-year, with Hong Kong offsetting weaker Mainland sales.

• Profit was impacted by a one-off provision for land in Kwu Tung North and non-cash fair value changes.

Financial highlights

• Property sales revenue fell 16% to HK$1,792 million; rental and other income dropped 3% to HK$2,426 million; hotel operations revenue declined 3% to HK$822 million.

• Gross profit for 1H 2024 was HK$2,470 million, down from HK$2,761 million in 1H 2023.

• EPS was HK$0.54, down from HK$1.20; adjusted EPS based on underlying profit was HK$0.97.

• Gearing ratio increased to 40.9% from 34.1% at year-end 2023; net debt at HK$48,479 million.

• Available financial resources stood at HK$37,351 million, covering over 60% of total borrowings.

Outlook and guidance

• Residential property demand in Hong Kong and Mainland expected to remain subdued due to weak sentiment and high interest rates.

• Longer-term optimism for core markets, with focus on financial discipline and timely project delivery.

• High net-worth individuals relocating to Hong Kong seen as a positive for premium residential sales.