Henderson Land, Hong Kong’s third biggest developer, sees challenging year ahead as 2019 profit slumps 26 per cent

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Henderson Land Development, the third largest developer in Hong Kong, sees a “challenging” year ahead after posting a 26 per cent drop in core profit for 2019.

Chairmen Peter Lee Ka Kit and Martin Lee Ka-shing on Monday reported the company’s first set of annual results since taking over last year from their father, Lee Shau-kee, the city’s richest man.

“Hong Kong’s economic outlook is still hindered by unfavourable factors, including those stemming from the protracted local social unrest and spread of the novel coronavirus infection … It is expected that the operating environment for the group’s various businesses will be challenging this year,” said the company in its annual results statement filed to the Hong Kong stock exchange late on Monday.

Lee Shau-kee becomes Hong Kong’s wealthiest man on his retirement day

“Rental returns and market values of the group’s properties in Hong Kong have been adversely affected,” said the company, which owns retail space in more than 20 shopping malls across the city, including the IFC Mall in Central.

Hong Kong’s economy is projected to shrink 7.5 per cent in the second quarter, putting it on track for a 4.8 per cent decline this year, according to Standard Chartered Global Research.

Known affectionately as Fourth Uncle in Hong Kong, Lee Shau-kee, who turned 91 in March, stepped down last May.

Lee is the wealthiest tycoon in Hong Kong with a net worth estimated by Forbes at US$26.5 billion.

The company’s core profit dropped 26 per cent to HK$14.6 billion on revenue of HK$24.2 billion in 2019.

Henderson Land plans to pay a final dividend of HK$1.3 per share on June 26, bringing the full-year dividend to HK$1.8 per share, on par with that in 2018.

Henderson’s shares dropped 5.5 per cent to HK$28.35 before the earnings were announced on Monday, amid a 4.86 per cent slump in Hong Kong’s benchmark Hang Seng Index.

Meanwhile, Chinese Estates Holdings, founded and owned by billionaire Joseph Lau Luen-hung, reported that profit fell 22 per cent to HK$790 million last year.

China’s second largest developer says coronavirus is making survival difficult

“Coupled with the outbreak of Covid-19 and various measures including travel restrictions and new border control measures implemented in many countries to prevent the spread of the virus, local retail consumption and tourist arrivals are experiencing significant downward pressure,” said the company in a filing to the stock exchange on Monday.

“It is therefore expected that a longer time will be required for our investment properties to be fully healed.”

Chinese Estates has a portfolio of HK$14.8 billion investment properties in Hong Kong including the retail complex of Windsor House, Causeway Place in Causeway Bay and The One in Tsim Sha Tsui.

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