Kerry Properties 1H15 underlying profit jumps 21% to HK$2.2b

Balance sheet position is also solid.

Kerry Properties' underlying profit increased 21% YoY to HK$2.2 bn in 1H 2015.

According to a release from Kerry Properties, further, an increase in fair value of investment properties (net of deferred taxation) of HK$607 million were recorded in 1H 2015 (1H 2014: HK$586 million).

After taking into account the net increase in fair value, profit attributable to shareholders rose 17% YoY to HK$2,789 million (1H 2014: HK$2,390 million).

Also, balance sheet position is solid, with HK$ 11.2bn in cash and bank balances and HK$ 16.0bn in available undrawn bank loan facilities, making up a total of HK$ 27.2bn in available funds as of June 30, 2015.

Net debt to total equity increased slightly to 26.1% as of June 30, 2015 from 24.5% as of December 31, 2014.

Here's more from Kerry Properties:

Net asset value increased by 2.3% from beginning of the year to HK$ 56.73 per share as of June 30, 2015.

Interim dividend per share at HK$0.30 per share has been declared.

During the period, the Group increased its land bank by acquiring a site in Qianhai, Shenzhen, PRC, for RMB3.9 bn in January 2015 and a site in Beacon Hill, Kowloon, HK, for HK$2.4 bn in February 2015 through public land sales.

In terms of contracted sales, the Group achieved HK$ 2.4bn from projects in HK, and HK$ 2.6bn from projects in the PRC, totalling HK$5.0bn in 1H 2015, on track to achieve the full year sales target of HK$ 12bn.

In HK, sales momentum remained strong. Key projects sold include the inventory units of One and Three Ede Road, 8 LaSalle and Dragons Range.

In the PRC, the Group was able to achieve contracted sales growth of 24% YoY, as a result of a mild relaxation of government control policies and the satisfactory market responses to the pre-sale of Castalia Court in Zhijiang in Hangzhou and Phase II of The Metropolis-Arcadia Court in Chengdu.

Other key projects sold include the inventory units of Putian, Tianjin, Nanchang, Shenyang, and Changsha Xiangjiang Arcadia Court.

In pursuance of the Group’s focus on developing large-scale mixed-use properties in core locations of first-tier cities and certain provincial capitals, the resulting rental property portfolio is now posting rental and occupancy rates that meet expectations.

Property rental and hotel revenue increased 21% YoY to HK$ 2.5 bn and gross profit increased 29% YoY to HK$1.5 bn in 1H 2015.

Overall occupancy for office, commercial and serviced apartments reached 96% as of June 30, 2015, comparing to 86% as of June 30, 2014.

Property rental income growth during the period was mainly attributable to Jing An Kerry Centre.

Hotel revenue increase mainly due to the improving performance of the existing hotels at Jing An Kerry Centre and Beijing Kerry Centre. Nanchang Shangri-La hotel was soft-opened in February 2015.

Share of results of associates increased 111% to HK$1,197 million in 1H 2015 from HK$566 million in 1H2014 mainly due to the sales recognition of Dragons Range in 1H 2015.