Kerry Properties Posts
Strong Rise in Earnings
by Jonathan Li
From The Wall Street Journal Online
March 28, 2006
Hong Kong-listed Kerry Properties Ltd. said its 2005 net profit rose 35%, helped by gains from property revaluation and higher profit from Hong Kong property sales and logistics operations.
The midsize property developer said its 2005 net profit rose to HK$3.07 billion (US$395.7 million) from HK$2.27 billion the year earlier.
Kerry Properties said that stripping out revaluation gains, 2005 underlying net profit rose 11% to HK$1.76 billion, from HK$1.58 billion in 2004.
The company reported a gain of HK$1.31 billion from the revaluation of its investment properties, against HK$691 million for the previous year.
Revenue in 2005 rose 57% to HK$8.01 billion from HK$5.1 billion a year earlier.
The company said profit from Hong Kong property sales in 2005 surged 29% to HK$780 million from HK$603 million. Property prices in Hong Kong rose an average of 6%-7% last year, according to property consultants.
However, profit from China's property sales fell 33% to HK$295 million from HK$441 million, due to lower sales.
Steven Ho, executive director, said the company plans to sell a luxury residential project in Ho Man Tin Hill in Hong Kong's Kowloon district this year. The project, with 155,000 square feet (14,400 square meters) of floor space, is scheduled for completion in the second quarter.
Mr. Ho said Kerry Properties recently signed an agreement to buy a property in Quarry Bay on Hong Kong Island for commercial development. The planned property will have 550,000 square feet of floor space, according to Mr. Ho. He didn't disclose the purchase cost.
He said Kerry Properties is in advanced talks with the Macau government to secure approval for a planned residential development with a maximum floor space of 2.8 million square feet.
Profit from the logistics division -- with a portfolio of warehouses, logistics centers and port facilities of more than 16 million square feet and a fleet of more than 2,000 vehicles -- jumped 16% to HK$507 million from HK$438 million.
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