Wharf (Holdings) Ltd. · HKEX:4
Wharf (Holdings) — FY2006 Earnings Presentation
30 slides from Wharf (Holdings)'s earnings presentation, Mar 21, 2007
Slide 1: 2006 Annual Results, 21 March 2007
2006 Annual Results．21 March 2007
Slide 2: Key Recaps for 2006
Key Recaps for 2006 Core properties Harbour City and Times Square represent close to 60% of Group’s total assets. Combined turnover: $4,722M (+12%), operating profit: $3,414M (+14%). Total China landbank and investment properties over 50M s.f. (1/1/06: 17M s.f.). New site acquired in Chengdu, Su
Slide 3: Results Highlights
Results Highlights FY 06 FY 05 % (HK$) (HK$) Change Turnover 13,364M 12,543M +7% Operating profit 6,471M 6,003M +8% Borrowing costs (824M) (562M) -47% Taxation (1,065M) *(538M) -98% Annual Results 2006 Net profit before property revaluation 4,285M 4,499M -5% * includes i-CABLE deferred tax
Slide 4: Results Highlights
Results Highlights FY 06 FY 05 % (HK$) (HK$) Change Net profit excluding revaluation surplus 4,285M 4,499M -5% Revaluation surplus (net of Tax & MI) 6,472M 9,389M -31% Profit attributable to shareholders 10,757M 13,888M -23% Earnings per share 4.39 5.67 -23% EPS (excluding revaluation surp
Slide 5: Results Highlights
Results Highlights FY 06 FY 05 % Change Borrowing Cost 824M 562M +47% Average Interest Rate 4.7% 3.6% 1.1pts Interest Cover 5.8 11.5 Net Debt 16.9B 16.1B +5% Debt to Shareholders’ Equity 22.5% 24.6% -2.1pts Annual Results 2006 5
Slide 6: Properties
Properties Revenue Segment Profit FY 06 FY 05 % FY 06 FY 05 % (HK$M) (HK$M) Change (HK$M) (HK$M) Change Property Investment 5,677 5,073 +12% 3,973 3,465 +15% 65% 84% Annual Results 2006 Segment Profit Allocation Share of Group NAV 6
Slide 7: Harbour City
Harbour City SEGMENT PERFORMANCE Revenue Occupancy FY 06 FY 05 % % (HK$M) (HK$M) Change Retail 1,472 1,287 +14% 96% Office 1,104 1,002 +10% 95% Serviced Apartment 202 220 -8% 75% Hotel 944 823 +15% 90% Annual Results 2006 Total 3,722 3,332 +12% 7
Slide 8: Harbour City Retail
Harbour City Retail Average occupancy: 96% (2005: 99%) Positive local sentiment and tourist arrivals fuelled retail sales Average tenant’s sales psf +16% YoY in 2006; record 12/06 sales of over HK$1,400 psf Retail area on level I of OC opened in 6/06 Conversion of Level 4 of OC: into 37,00
Slide 9: Harbour City Office and Serviced Apartments
Harbour City Office Average occupancy: 95% (2005: 95%) Expansion & upgrading requirements, growing trend of decentralization sustained demand for office space Spot rental growth slowed down in 2H06 Positive rental reversion 2006 Retention rate: 72% Serviced Apartments Occupancy: 75% (200
Slide 10: Times Square
Times Square SEGMENT PERFORMANCE Revenue Occupancy FY 06 FY 05 % % (HK$M) (HK$M) Change Retail 706 630 +12% 100% Office 294 256 +15% 93% Total 1,000 886 +13% Annual Results 2006 10
Slide 11: Times Square Retail and Office
Times Square Retail Average occupancy: ~100% (2005: 99%) Favourable rental growth on new leases and renewals Trade-mix refinement continued Strong branding & marketing programs underpin success, e.g. Apple Countdown captivates experience for HK Office Occupancy: 93% (2005: 96%) rental ra
Slide 12: China Properties: Property Investment
China Properties Property Investment 3 Times Squares (Shanghai, Beijing, & Chongqing) performed satisfactorily FY06 Revenue: HK$343M, +15%, Operating profit: HK$130M, +53% 1717, Nanjing Xi Road, Shanghai 1.6M s.f. GFA top quality Grade A office tower Completion: Mid 2009 More Times Squar
Slide 13: China Properties: Property Development
China Properties Property Development Development landbank in China – approaching 50M s.f., including Chengdu (3 sites), Suzhou & Wuxi. Acquired 4 new prime sites in 2006 / early 2007 Chengdu – No. 10 Gaoxin District (4/06) ¾ High-end residential + retail, 6.1M s.f. Suzhou (12/06) ¾ Premier
Slide 14: China Properties: Other On-going Projects
China Properties Property Development Other on-going projects Wellington Garden ¾ Residential, completion: 1H2007 ¾ 57% of units launched pre-sold Wuhan Times Square ¾ Mix complex, completion: late 2007 ¾ Towers 3 & 4 residential: 72% of units launched pre-sold Dalian Times Square ¾ Retail &
Slide 15: Other Properties: Hong Kong Property Developments
Other Properties Hong Kong Property Developments Revenue: HK$293M, +453% Sales of 72 units at 60 Victoria Road development Two houses at Gough Hill Path sold in 2006 @HK$28,000 psf. Profit recorded in “Investment & Others”; sold 3rd house in 3/07 at HK$30,000 psf. Remaining stock to be sold
Slide 16: Other Properties: Marco Polo Hotels
Other Properties – Marco Polo Hotels Current profile 11 hotels (8 in operation, 3 under construction) in the Asia Pacific Region 3 hotels under construction – Beijing, Wuhan, & Chengdu Hong Kong Hotel and club revenue: HK$944M, +15% 20% growth in average room rates and higher occupancy (
Slide 17: Logistics
Logistics Revenue Segment Profit FY 06 FY 05 % FY 06 FY 05 % (HK$M) (HK$M) Change (HK$M) (HK$M) Change Logistics 3,506 3,534 -0.8% 1,887 1,935 -2.5% Annual Results 2006 11% 31% Segment Profit Allocation Share of Group NAV 17
Slide 18: Logistics: Modern Terminals Revenue and Throughput
Logistics Revenue Throughput FY 06 FY 05 % FY 06 FY 05 % (HK$M) (HK$M) Change TEUs(M) TEUs(M) Change Modern Terminals 3,096 3,149 -1.7% 5.42 5.04 +7% FY 06 FY 05 % (HK$M) (HK$M) Change MTL’s Associates & jointly Annual Results 2006 112 105 +7% controlled entity (post-tax) 18
Slide 19: Modern Terminals: Hong Kong
Modern Terminals Hong Kong Throughput: 5.42M TEUs, +7% Market share: 33.8% (2005: 35.3%) 4% drop in operating profit Operating profit 2H06 (+8%) vs 1H06 (-16%) Box mix shift with more transshipment / feeder cargos Increasing competition in HK & South China Annual Results 2006 19
Slide 20: Modern Terminals: China
Modern Terminals China Dachan Bay Phase I (65%) – 5 berths, 2.5M TEUs, 1st berth will commence operation towards end 2007, it will increase MTL’s own operating capacity in Pearl River Delta from 7.5 to 12.5 berths Taicang ¾ Phase I (51%) – FY06 throughput: 467,000 TEUs, +86% ¾ Phase II (70%) – 4
Slide 21: Communication, Media & Entertainment (CME)
Communication, Media & Entertainment (CME) Revenue Segment Profit FY 06 FY 05 % FY 06 FY 05 % (HK$M) (HK$M) Change (HK$M) (HK$M) Change CME 3,947 3,937 +0.3% 270 486 -44.3% Annual Results 2006 4% 5% Segment Profit Allocation Share of Group NAV 21
Slide 22: CME Revenue and Subscribers
CME Revenue No. of Subscribers/fixed lines FY 06 FY 05 % % FY 06 FY 05 (HK$M) (HK$M) Change Change Pay TV 1,895 1,884 +1% 786,000 738,000 +7% Internet & 596 558 +7% 328,000 320,000 +3% Multimedia Wharf T&T 1,384 1,478 -6% 562,000 523,000 +7% Annual Results 2006 22
Slide 23: CME
CME Pay TV Steady growth in subscribers base with only marginal erosion of ARPU Promptly responded to adjust its subscription acquisition and customer retention strategies Quickly took control of the situation re. churn and customer acquisition upon lost of EPL Internet & Multimedia Stea
Slide 24: Profit & Loss Summary
Profit & Loss Summary FY 06 FY 05 % (HK$M) (HK$M) Change Turnover 13,364 12,543 +7% Operating Profit 6,471 6,003 +8% Revaluation Surplus 7,868 11,513 -32% Profit Before Taxation 13,823 17,413 -21% Taxation (Incl. deferred taxation on revaluation) (2,429) (2,583) -6% Profit After Taxation 11,394 14,8
Slide 25: Debt Profile
Debt Profile At 31 December 2006 Un-drawn Total Debt Facility Company and wholly owned subsidiaries (HK$B) (HK$B) Committed facilities 14.0 68% 3.7 Uncommitted facilities 0.8 4% 1.4 Total: 14.8 72% 5.1 Non-wholly owned subsidiaries (non-recourse to Wharf) Modern Terminals Limited 5.5 26% 8.5 i-CABLE
Slide 26: NAV Adjustment
NAV Adjustment At 31 December 2006 Per Share For Supplemental Information Only: (HK$) NAV per Balance Sheet 30.70 Subjective adjustments:- Modern Terminals (on latest transacted price) 3.13 Hotel Properties (on independent valuation) 1.50 i-CABLE (on market value) 0.43 Deferred tax on revaluat
Slide 27: Outlook – Harbour City & Times Square
Outlook – Harbour City & Times Square Combined Turnover and Operating Profit 4000 3500 Turnover (HK$M) 3000 Operating Profit 2500 Annual Results 2006 2000 2001 2002 2003 2004 2005 2006 (Year) 27
Slide 28: Outlook – China Properties
Outlook – China Properties Projects Total Floor Area (s.f.) in ‘M Investment Properties – BCTS, STS, CTS 3.2 Lot 1717, Nan Jing Xi Road, Shanghai 1.6 Wellington Garden, Shanghai 0.6 No. 1 Xin Hua Road, Shanghai 0.3 Jingan Garden, Shanghai 1.0 Dalian Times Square, Dalian 1.9 Wuhan Times Square, Wuhan
Slide 29: Outlook – MTL
Outlook – MTL Berth Capacity Effective Berth Capacity Hong Kong 7.5 Pearl River Delta Dachan Bay I (65%) [5 berths] 3.3 Shekou* (20%) [9 berths] 1.8 Chiwan (8%) [5 berths] 0.4 Yangtze River Delta Taicang I (51%) [2 berths] 1.0 Annual Results 2006 Taicang II (70%) [4 berths] 2.8 Total: 16.8
Slide 30: End of Presentation
End of Presentation WHARE Established 1886