Kerry Properties : Interim Report 2018

2018

CORPORATE INFORMATION & KEY DATES

BOARD OF DIRECTORS

Executive Directors

Mr Wong Siu Kong,Chairman

Mr Ho Shut Kan,Chief Executive OfficerMr Bryan Pallop Gaw

Non-executive DirectorMr Kuok Khoon Hua

Independent Non-executive DirectorsMr Ku Moon Lun

Ms Wong Yu Pok, Marina,JPMr Chang Tso Tung, Stephen

AUDIT AND CORPORATE GOVERNANCE

COMMITTEE

Ms Wong Yu Pok, Marina,JP,ChairmanMr Ku Moon Lun

Mr Chang Tso Tung, Stephen

REMUNERATION COMMITTEE

Ms Wong Yu Pok, Marina,JP,ChairmanMr Wong Siu Kong

Mr Ho Shut Kan Mr Ku Moon Lun

Mr Chang Tso Tung, Stephen

NOMINATION COMMITTEEMr Wong Siu Kong,ChairmanMr Ho Shut Kan

Mr Ku Moon Lun

Ms Wong Yu Pok, Marina,JPMr Chang Tso Tung, Stephen

FINANCE COMMITTEE

Mr Wong Siu Kong

Mr Ho Shut Kan

EXECUTIVE COMMITTEEMr Wong Siu Kong

Mr Ho Shut Kan

Mr Bryan Pallop Gaw

AUDITORPricewaterhouseCoopers

REGISTERED OFFICE

Canon's Court, 22 Victoria Street Hamilton HM12, Bermuda

HEAD OFFICE AND PRINCIPAL PLACE OF

BUSINESS

25/F, Kerry Centre, 683 King's Road Quarry Bay, Hong Kong

PRINCIPAL SHARE REGISTRAR AND

TRANSFER OFFICE

MUFG Fund Services (Bermuda) Limited The Belvedere Building, 69 Pitts Bay Road Pembroke HM08, Bermuda

HONG KONG BRANCH SHARE REGISTRAR AND

TRANSFER OFFICE

Tricor Abacus Limited Level 22, Hopewell Centre

183 Queen's Road East, Hong Kong

CORPORATE COMMUNICATION DEPARTMENTKerry Properties Limited

25/F, Kerry Centre, 683 King's Road Quarry Bay, Hong Kong

Telephone: [phone] Facsimile: (852) 2967 2900

Email:[e-mail]

INVESTOR RELATIONS DEPARTMENTKerry Properties Limited

25/F, Kerry Centre, 683 King's Road Quarry Bay, Hong Kong

Telephone: [phone] Facsimile: (852) 2967 2900 Email:[e-mail]

WEBSITEwww.kerryprops.com

KEY DATES

Closure of Registers of Members6 September 2018

COMPANY SECRETARYMs Li Siu Ching, Liz

Proposed Payment of Interim Dividend18 September 2018

1

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

The Board of Directors (the "Board") of the Company reports the unaudited interim results of the Group for the six months ended 30 June 2018. The Audit and Corporate Governance Committee of the Company has met to review the results and the unaudited condensed consolidated interim financial statements of the Group for the six months ended 30 June 2018 prior to recommending them to the Board for approval.

The Group's profit attributable to shareholders for the six months ended 30 June 2018 was HK$3,990 million, representing an increase of 21% compared with HK$3,309 million reported for the same period in 2017. The Group measured its investment property portfolio on a fair value basis and recorded an increase in fair value of investment properties (net of deferred taxation) of HK$2,438 million for the six months ended 30 June 2018 (2017: HK$476 million). Before taking into account the effects of the aforementioned increase in fair value, the Group recorded a decrease of 45% in profit attributable to shareholders to HK$1,552 million for the six months ended 30 June 2018 (2017: HK$2,833 million). The decrease was mainly due to the adoption of new accounting standards starting from 1 January 2018 (Note 2) and the provision for impairment loss for property under development in Macau amounting to HK$1,175 million (2017: Nil) (Note 6).

Earnings per share for the six months ended 30 June 2018 was HK$2.75, representing an increase of 20% compared with HK$2.29 per share for the same period in 2017. The basis of calculating the earnings per share is detailed in Note 8 below.

The effect on the Group's profit attributable to shareholders due to the net increase in fair value of the Group's investment properties and related tax effects is as follows:

Six months ended 30 June 20182017

HK$ millionHK$ million

ChangeProfit attributable to shareholders before taking into account the net increase in fair value of investment properties and related tax effects

1,5522,833

-45%Add:

Net increase in fair value of investment properties and related tax effects

2,438476

Profit attributable to shareholders after taking into account the net increase in fair value of investment properties and related tax effects

3,9903,309

+21%The Directors have declared an interim dividend of HK$0.40 per share for the six months ended 30 June 2018 (the "Interim Dividend") (2017: HK$0.45), which is payable on Tuesday, 18 September 2018 to the shareholders of the Company (the "Shareholders") whose names appear on the registers of members of the Company (the "Registers of Members") on Thursday, 6 September 2018.

At the Company's Annual General Meeting held on 18 May 2018, the Shareholders approved the final dividend of HK$0.90 per share and a special dividend of HK$0.15 per share for the year ended 31 December 2017 which amounted to a total of approximately HK$1,524 million and was paid on 5 June 2018.

2018

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

Unaudited

Six months ended 30 June 20182017

Note

HK$'000HK$'000

Turnover	4	10,560,085	17,741,993
Cost of sales and direct expenses	(6,298,326)	(13,639,909)
Gross profit	4	4,261,759	4,102,084
Other income and net gains/(losses)	(726,631)	293,711
Administrative and other operating expenses	(532,260)	(486,293)
Increase in fair value of investment properties	3,386,745	474,400
Operating profit before finance costs	6,389,613	4,383,902
Finance costs	(350,858)	(215,970)
Operating profit	5	6,038,755	4,167,932
Share of results of associates and joint ventures	805,594	687,983
Profit before taxation	6,844,349	4,855,915
Taxation	7	(1,947,846)	(1,057,620)
Profit for the period	4,896,503	3,798,295
Profit attributable to:
Company's shareholders	3,990,095	3,309,224
Non-controlling interests	906,408	489,071
4,896,503	3,798,295
Earnings per share	8
- Basic	HK$2.75	HK$2.29
- Diluted	HK$2.75	HK$2.29

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

Unaudited

Six months ended 30 June

2018	2017
HK$'000	HK$'000
Profit for the period	4,896,503	3,798,295
Other comprehensive income
Items that may be reclassified to profit or loss
Cash flow hedges	9,341	(176,395)
Fair value loss on available-for-sale investments	-	(2,980)
Share of other comprehensive income of associates and joint ventures	(98,500)	160,583
Net translation differences on foreign operations	114,493	1,479,854
Items that will not be reclassified to profit or loss
Fair value loss on equity investments at fair value through other
comprehensive income	(15,805)	-
Other comprehensive income for the period, net of tax	9,529	1,461,062
Total comprehensive income for the period	4,906,032	5,259,357
Total comprehensive income attributable to:
Company's shareholders	3,945,253	4,442,866
Non-controlling interests	960,779	816,491
4,906,032	5,259,357