SHK reports a 9.9% rise for interim profit

Hong Kong’s largest property developer, Sun Hung Kai Properties Limited, reported a 9.9% increase for underlying interim profit and declared a 10.5% rise for its interim dividend amid the looming economic downturn.

Chairman cum managing director Raymond Kwok said increasing the interim dividend was to indicate its confidence on full-year performance.

“Barring unforeseen circumstances, it is expected that the Group will achieve encouraging results for the current financial year, and the dividend will increase accordingly”. Kwok said in the earnings statement. He added that the new residential flats to be occupied in the second-half had almost sold out so that the profit for the full year was guaranteed.

The underlying interim profit of the blue-chip property developer rose to HK$9.29 billion, up from HK$8.46 million a year earlier. Meanwhile, the interim dividend was risen the first time in five years at HK$1.05 per share, up from 95 cents a year earlier.

However, profit attributable to shareholders fell 6.3% to HK$14.7 billion as the revaluation gain was smaller on property investment.

Sun Hung Kai Properties, the largest property developer in Hong Kong by market capitalisation, has developed a variety of property projects with residential flats, office space and shopping malls around the city.

The company may cut the sales target up to June this year by 10-15%, from HK$32 billion to HK$27 billion.

The developer’s deputy managing director Victor Lui explained a decline in sales target was set as the number of transactions for first-hand residential flats for the whole year was expected to decrease as compared to last year. He said that the property prices of the company’s projects would still be set according to the market trend.

“We will slow down the pace of the promotion of new projects,” Lui said. He added that less than 4,000 units in eight projects would be released up to December this year.

The company decided to postpone the application for the occupation permit for Grand Yoho, a new residential project in Yuen Long, because of construction delay and abundant supply of new residential flats in the north-west New Territories town.

While Financial Secretary John Tsang insisted in this year’s budget speech that there was “no room” to scrap the government’s cooling measures on property prices, Lui believed the government would make the right decisions at an appropriate time.

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