Kerry Properties' (0683) underlying profit decreased 45 percent to HK$1.6 billion in the first half of 2018. It was mainly due to the provision for impairment loss for property under development in Macau and the adoption of new accounting standards starting from 1 January 2018, the company explained.
However, if including HK$2.4 billion from increase in fair value gain of investment properties, the net profit rose 21 percent year on year to HK$4 billion.
Earnings per share were HK$2.75 against HK$2.29 per share, a 20-percent increase. But the interim dividend of 40 HK cents per share Kerry is paying is 11 percent down on last year.
Turnover, including proceeds from property sales, rental income and revenue from hotels, fell by 40 percent to HK$10.5 billion from HK$17.7 billion for the corresponding six months in 2017.
The decrease was attributed mainly to the adoption of new accounting standards from January 1 and a provision for an impairment loss for property at Nam Van Lake in Macau. That amounts to HK$1.17 billion. The Macau government has not renewed the land lease, which ended on July 30, 2016.
Key projects in Hong Kong sold included residential units in The Bloomsway in Tuen Mun and Mantin Heights in Kowloon.
Kerry also noted that its Hong Kong property business will be exposed to "greater uncertainty in the macro-economic environment," including issues generated by interest rate hikes and continuing international trade disputes.
On commercial properties, Kerry said there has been progress at developments being built in Qianhai and Shenyang, which will be added to the rental portfolio in the next few years.