Kerry Properties Limited (KERRY PPT) reported mixed interim results for the six months ended 30 June 2026.
• Financial Performance – Combined revenue fell 33.00 % year on year to HK$6.67 billion, dragged by a 53.00 % slide in development-property income to HK$3.03 billion. – Revenue from the company and its subsidiaries alone declined 31.00 % to HK$5.56 billion. – Profit attributable to shareholders increased 20.10 % to HK$0.74 billion, benefitting from a markedly smaller fair-value loss on investment properties (HK$47 million vs HK$251 million a year earlier). – Underlying profit (excluding fair-value changes) contracted 8.60 % to HK$0.78 billion. – Gross margin improved 12 percentage points to 39 %. – Basic EPS rose 21.40 % to HK$0.51; adjusted EPS slipped 8.50 % to HK$0.54.
• Segment Highlights – Property sales: revenue plunged 53.00 % to HK$3.03 billion; Hong Kong sales recognition dropped 59 % while Mainland China grew 180 % from a low base. – Property rental and others: revenue edged up 2.72 % to HK$2.57 billion. – Hotel operations: revenue improved 3.88 % to HK$1.07 billion.
• Contracted Sales & Pipeline – Group contracted sales decreased 57.55 % to HK$6.87 billion, with Hong Kong projects contributing over 80 %. – Unrecognised contracted sales stood at roughly HK$29.80 billion, of which HK$23.90 billion relates to the Mainland and HK$5.90 billion to Hong Kong.
• Balance Sheet & Liquidity – Net debt fell to HK$37.83 billion; gearing ratio improved to 31.3 % from 33.3 % at end-2025. – Total borrowings were little changed at HK$55.22 billion with an average cost of 3.5 % and 2.4-year average tenor; 51 % of debt is fixed-rate or hedged. – Cash and bank deposits increased to HK$17.39 billion, covering 88 % of total borrowings when combined with undrawn facilities.
• Dividend An interim dividend of HK$0.40 per share was declared, unchanged from last year; payable on 25 September 2026 to shareholders on record as of 16 September 2026 (ex-dividend date: 14 September 2026).
• Operational Context – Hong Kong: Residential demand improved, pushing inventory absorption to a three-year low; developers’ land bids rose over 40 % year on year. Rental apartments reached near full occupancy; office leasing remained soft. – Mainland China: Residential market stayed weak; office rents faced downward pressure, but retail malls maintained steady performance through tenant-mix optimisation.
Kerry Properties noted its focus on disciplined landbank expansion in Hong Kong, sustained deleveraging and continued investment in mixed-use projects on the Mainland, underpinned by a sustainable-finance framework that now accounts for 76 % of total loan facilities. The company remains optimistic on long-term prospects in both core markets despite near-term macroeconomic headwinds.
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