Sun Hung Kai Properties (16) H2 2024 earnings summary

Executive summary

• Underlying profit for FY2024 was HK$21,739 million, down 9% year-on-year, mainly due to lower property development profit in Hong Kong and Mainland China, partially offset by higher rental and hotel income.

• Reported profit attributable to shareholders was HK$19,046 million, a 20% decrease from last year, impacted by a net revaluation loss on investment properties.

• Prudent financial discipline, strong recurring income, and selective land banking supported resilience amid market challenges.

• Total dividend per share was HK$3.75, down 24% year-on-year.

Financial highlights

• Underlying EPS fell 9% to HK$7.50; reported EPS dropped 20% to HK$6.57.

• Net debt stood at HK$110,866 million as of June 30, 2024; net gearing ratio at 18.3%.

• Interest cover at 4.6x, down from 6.8x a year ago due to higher interest expenses.

• Final dividend proposed at HK$2.80 per share.

• Hotel operations revenue surged 25% to HK$5,261 million; operating profit jumped 304% to HK$650 million.

Outlook and guidance

• Modest economic growth expected in Hong Kong; potential interest rate cuts may support the housing market.

• Construction capex to decrease meaningfully in coming years; focus on high asset turnover and disposal of non-core properties.

• Several new projects and major residential launches in Hong Kong and Mainland China to drive recurring income growth.

• Over HK$28 billion of sales proceeds expected by June 2025; lower net gearing ratio anticipated by end of FY2025.