Kerry Properties (0683) saw its first-half net profit drop 22 percent year-on-year to HK$612 million, and maintained its interim dividend at 40 cents.
Underlying profit, excluding property revaluation and impairment provision, also fell 30 percent to HK$978 million, pressured by lower gross profit margins on development properties, lower rental revenue, increased taxation, and higher costs.
However, total revenue jumped 59.9 percent to HK$8.06 billion, while its contracted sales reached HK$16.2 billion, driven by the strong contribution from its Jinling project in Shanghai.
The company's combined revenue rose 65 percent to HK$9.96 billion, powered by higher sales recognition for development properties, primarily Mont Verra and La Montagne in Hong Kong.
Due to the persistent challenges in the commercial property market, combined revenue was partially offset by a 5 percent decline in combined rental income from investment properties and hotels, the developer said.
Combined revenue for development properties surged 176 percent to HK$6.4 billion, primarily driven by higher revenue recognition in Hong Kong, while that of investment properties and hotels saw a decline of 5 percent.
Chairman Kuok Khoon-hua said that residential prices seemed to be stabilizing, with overall transaction volumes at the half-year mark showing modest improvement yearly in Hong Kong.
But the city's residential prices have dropped close to 30 percent over the past four years, and a significant overhang of completed yet unsold flats continues to temper expectations of any meaningful near-term rebound, he added.
Looking ahead, as meaningful headwinds for the general economy and property market remained and the mainland’s path to economic repositioning would not be without bumps and the odd convulsions, the company said it would continue to be vigilant and prioritize the health and resiliency of its operation.
HELEN ZHONG
