HONG KONG: Henderson Land Development Co, the Hong Kong-based builder controlled by billionaire Lee Shau-kee, said 12-month profit tumbled 64 percent as revenue and the value of its investment holdings dropped.

Net income in the 12 months ended June 30 declined to HK$5.54 billion ($715 million), or HK$2.58 a share, from HK$15.5 billion, or HK$7.54, a year earlier, the company said in a statement to Hong Kong's stock exchange Friday.

Excluding changes in the value of its investment properties, Henderson's net income fell to HK$3.5 billion, from HK$5.71 billion last year. That is below the median HK$4.04 billion estimate of seven analysts surveyed by Bloomberg.Henderson Land's revenue from property sales in Hong Kong plunged by half to HK$4.66 billion from HK$9.29 billion a year earlier. The company had more than 1,000 units available for sale last year, according to the statement.

On the other hand, net rental income from offices and malls, including the International Finance Centre, Hong Kong's second-tallest building, rose 9.3 percent to HK$2.79 billion, the company said today. Sales fell to HK$8.46 billion from HK$13.5 billion.

Home prices in Hong Kong, where values of luxury residences are Asia's second highest after Tokyo, slid 23 percent from a 10-year high in March 2008 to December after a global economic slowdown dragged the city into its worst recession in a decade. Prices have since rebounded, erasing the loss as record-low mortgage costs and near-zero savings rates on bank deposits drive investors to buy real estate.

"Even though the figures are not that good, you should look ahead, because home prices are still rising," Francis Lun, general manager at Fulbright Securities Ltd, said Friday. Henderson "could improve in the current half-year," Lun said.

Another Hong Kong billionaire's property holdings fared better: Cheung Kong (Holdings) Ltd, the builder owned by Asia's second-richest man Li Ka-shing, said on August 13 that first-half profit excluding unit Hutchison Whampoa Ltd rose 29 percent on higher home sales and values of investment properties. Sun Hung Kai Properties Ltd, the world's biggest by value, will report full-year profit on September 15.

Also accenting the positive, Henderson's shares rose 0.3 percent to close at HK$47.05 in Hong Kong Friday, before the company announced its earnings. The stock has jumped 64 percent this year, compared with the 52 percent advance in the Hang Seng Property Index that tracks the city's six-biggest developers, including Henderson.

The company, which changed its financial year to end in December instead of June, will treat the 18 months to December 31 as its complete 2009 results.

Bloomberg News

(HK Edition 08/29/2009 page2)