Hongkong Land net loss widens 150% amid weak sales of mainland China projects

Hongkong Land, the biggest landlord in Hong Kong’s Central business district, recorded widening losses for the first half of this year, placing the blame on poor sales in mainland China’s long-suffering property market.

The company’s net loss in the first six months expanded 150 per cent to US$833 million from US$333 million in the same period last year, according to an announcement released late on Thursday. The company said this reflects non-cash losses related to revaluations of investment properties.

The underlying loss was US$7 million for the first half, including a non-cash provision of US$295 million for development properties in mainland China during the period, the developer said. If the impact of the provision is excluded, underlying profit was US$288 million, 32 per cent lower than last year, it said.

Weak sentiment in mainland China’s residential market affected sales of Hongkong Land’s development projects and resulted in the provision, the company said. The underlying loss was “modest”, and contributions from investment properties were “stable” despite the market headwinds, said Michael Smith, the company’s CEO.

The company’s fundamentals “remain sound, with resilient operating cash flows from its Investment Properties portfolio and a strong balance sheet” despite a mild reduction in office rental income in Hong Kong, the announcement said, citing stable contributions from the luxury retail and Singapore office segments.