Kerry Properties (683) H2 2024 earnings summary

Executive summary

• Combined revenue rose 18% year-over-year to HK$21,361 million, driven by strong property sales in Hong Kong and a 33% increase in development property revenue, despite subdued markets in both Hong Kong and Mainland China.

• Reported profit attributable to shareholders dropped 75% to HK$808 million due to significant non-cash provisions and fair value losses, while underlying profit (excluding exceptional items) increased 25% to HK$3,973 million.

• Adjusted EPS based on underlying profit was HK$2.74 (up 25%), while reported EPS dropped to HK$0.56.

• Final dividend per share maintained at HK$1.35, reflecting a stable payout policy.

Financial highlights

• Combined revenue: HK$21,361 million (+18% year-over-year); development properties: HK$13,830 million (+33%); investment properties and hotels: HK$7,531 million (-2%).

• Gross margin declined from 44% to 32% year-over-year, mainly due to a different product mix in development properties.

• Contracted sales: HK$12,605 million (-10%), with Hong Kong up 195% and Mainland down 77%.

• Net debt increased to HK$48.4 billion, with a gearing ratio rising to 41.5%.

• Taxation expense decreased 60% due to lower deferred tax and land appreciation tax.

Outlook and guidance

• Maintains a conservative stance amid low visibility for recovery in business and consumer confidence in both Hong Kong and Mainland China.

• Focus remains on deleveraging the balance sheet, stable dividends, and prudent landbanking.

• Long-term optimism for both Hong Kong and Mainland China due to structural growth, urban development, and emerging middle-class consumption.