HONG KONG — Minmetals Land Limited (“Minmetals Land” or the “Company”) (Stock code: 0230) is pleased to announce its unaudited interim results for the six months ended 30 June 2017. The Company’s consolidated revenue increased 15.5% YoY to HK$4.38 billion. Revenue from real estate development, which accounted for 88.2% of the consolidated revenue, increased 16.6% YoY to HK$3.86 billion. As a result of higher-margin products being recognized during the period, the gross margin of real estate development segment surged considerably from 23% to 40%, whilst consolidated gross margin surged 14.8 percentage points to 37.2%. Profit for the period surged substantially to HK$752 million, up 63.2% YoY. Excluding the increase in fair value of investment properties, the Company’s core operating profit increased 68.4% to HK$741million.
Profit attributable to equity holders of the Company surged 53.8% YoY to HK$395 million. Basic earnings per share improved to HK11.82 cents (30 June 2016: HK7.69 cents), whilst core earnings per share increased 62.0% YoY to HK11.5 cents. The Board does not recommend the payment of interim dividend.
As of 30 June 2017, net asset value per share (excluding minority interests) was HK$2.21 (31 December 2016: HK$1.97). Cash and bank deposits were HK$8.40 billion (31 December 2016: HK$5.43 billion), whilst unutilised banking facilities amounted to HK$4.37 billion (31 December 2016: HK$3.46 billion). The Company’s net gearing improved to 61.6% (31 December 2016: 69.5%).
During the period under review, the Company entered into the Wuhan market successfully through public land auction. Together with the successful acquisition of two residential land sites located in Nanjing Jiangpu District and Hexi District in July, these three sites provides a total developable GFA of approximately 500,000 sq.m. , which are testimony to the Group’s investment strategy of “establishing footprint in hot cities and deepen our footprint in cities with existing competitive advantage”. As of 30 June 2017, the Company’s land bank stood at 3.2 million sq.m.
Mr. He Jianbo, Deputy Chairman and Managing Director of Minmetals Land, commented, “In the first half of 2017, the overall property market has become more rational and property price has also been curbed under the influence of numerous rounds of tightening and control measures. In response to a slower release rate of pre-sale permits and increasing pricing restrictions, some real estate developers have decided to suspend sales. Nevertheless, riding on favorable sales momentum from last year, industry players still achieved good sales performance and we are also confident about our future performance and earnings growth. Beside, real estate developers are also active in land replenishment and inventory restoration, particularly in hot cities with severe land supply shortage. However, land pricing restriction, selling price restriction and bidding for self-owned portion have become new curbing measures to repress land price in these cities. As a result, obtaining land through joint ventures or consortiums has become mainstream practice. We will also adopt such approach to expand our footprint at reasonable cost while lowering our development risk. Since the acquisition of Yau Tong site in Hong Kong last year, we have been closely monitoring the Hong Kong market and will continue to do so. In terms of finance, we will take advantage of our competitive edge in accessing low cost funding over a wide range of fundraising channels through our listing platform and the SOE background. We will also continue to apply stringent control over cash collection rate, improve projects’ capital turnover and maintain our gearing at a relatively reasonable level. We are confident that with strong support from our parent company and joint effort from all of our staff, we will deliver good results for this year and coming years, and provide a solid foundation for the future development of Minmetals Land.”