Kerry Properties (683) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 declined 8% year-over-year to HK$5,040 million, mainly due to lower property sales and rental income.

• Profit attributable to shareholders dropped 55% to HK$788 million, impacted by a one-off provision and lower fair value of investment properties.

• 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, totaling approximately HK$581 million.

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

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.

• Adjusted EPS based on underlying profit was HK$0.97, down 19% year-over-year; reported EPS was HK$0.54, down from HK$1.20.

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

• Net cash from operations was negative HK$1,535 million, compared to positive HK$1,852 million in 1H 2023.

• Gearing ratio increased to 40.9% from 34.1% at year-end 2023, mainly due to land payments for the Shanghai Huangpu project.

Outlook and guidance

• Residential 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.

• Noted trend of high-net-worth individuals relocating to Hong Kong, supporting luxury segment.