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Group Results Highlights
Business Review
Financial Review
Financial Information
Other Information
CONTENTS
2 The Wharf (Holdings) Limited Interim Report 2017
IP Demerger in Progress
HIGHLIGHTS
• Underlyingprofitincreasedby22%toHK$7,271million.
о InvestmentProperties(“IP”)werestableandturnedin66%ofGrouptotal.
о DevelopmentPropertiesmorethandoubledtocontribute32%ofGrouptotal.
• Hotel&Logisticswitnessedrecoveries.
• CMEexittocompleteinOctober.
• NetdebtreducedtoHK$21billionfora6.4%gearingratio.
• Dividendpershareincreasedby10%toHK$0.64.
• IPdemerger(bydistributioninspecie)inprogress.
GROUP RESULTS
Groupcoreprofitforthehalf-yearperiodended30June2017increasedyear-on-yearby22%toHK$7,271million(2016:HK$5,972million).
Groupprofitattributabletoequityshareholders,includingIPrevaluationsurplusandotherunrealisedaccountinggains/losses,fortheperiodamountedtoHK$8,441million(2016:HK$6,725million)fora26%increasefrom2016.BasicearningspersharewereHK$2.78(2016:HK$2.22).
INTERIM DIVIDENDS
Interim Dividend in Cash
AninterimdividendincashofHK$0.64(2016:HK$0.58)persharewillbepaidon12September2017toShareholdersonrecordasat6:00p.m.,25August2017.ThiswillabsorbatotalamountofHK$1,942million(2016:HK$1,758million).
Conditional Declaration of Special Interim Dividend — Distribution in Specie of i-CABLE Shares
ReferenceismadetotheOpenOfferCircularissuedbylistedsubsidiaryi-CABLECommunicationsLimited(“i-CABLE”)on12May2017.TheCompanyhasundertakentodistributeinspecieallsharesini-CABLE(“i-CABLEShares”)heldbytheCompanytoitsShareholdersonaproratabasis.
PleaserefertotheseparateannouncementoftheCompanydated9August2017fordetailsofthisconditionaldeclarationofspecialdividendbywayofdistributioninspecieofi-CABLESharesandtheCompany’sintentiontomakefurtherdistribution(s)inspecieofi-CABLEShares.
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BUSINESS REVIEW
Coreprofitfrompropertiesadvancedby28%toHK$7.1billion,representing98%(2016:92%)ofGrouptotal.HongKongpropertiesreportedanincreaseof17%toHK$5.2billionandMainlandpropertiesby75%toHK$1.9billion.
INVESTMENT PROPERTIES
Consistentlyhighoccupancyandpositiverentalreversionunderpinneda3%growthinIPcoreprofittoHK$4.8billion.TheGroup’sstrategicdifferentiationinmanagementandexecutioncapabilitiesremainedauniquecompetitiveedgetoboostperformance.
HONG KONG
RetailsalesattheGroup’smallsgenerallywitnessednoticeablesignsofimprovement.Criticalmass,showcaseeffect,best-positioneddestinationandunmatchedproductivityreinforcedtheGroup’suniquepositioning.Totalrevenueincreasedby4%toHK$6,681millionandoperatingprofitby4%toHK$5,942million.
Harbour City
Overallrevenue(excludinghotels)increasedby4%toHK$4,656millionandoperatingprofitby5%toHK$4,162million.
Retail
Revenueincreasedby5%toHK$3,258millionfromanoccupancyrateof96%.HarbourCityoutperformedthemarketwitha2.8%growthintenantsales,reflectingagradualrevivalofconsumptionandoptimism.Thankstoitsexceptionalsalesproductivityandcraftily-managedtenantmix,HarbourCityenjoyedcontinuedpositiverentalreversionandsteadyfoottrafficgrowth.
HarbourCityremainsthecoreofthe“GreaterHarbourCity”clusterofhigh-trafficshopping,entertainment,lifestyleanddiningrealm,enhancingtheoverallattractionpowerofthelivelydistrict.Thetwomillionsquarefeetofadjoiningmallspace(includinga530-metrecontiguousretailfrontageonCantonRoad)notonlyencompassesasignificantretailrepresentationofthemostproductiveanddynamicretailprecinctinTsimshatsui,butalsoisthelargestretailofferunder one roof in town. The interconnected office towers and hotels also serve as strategic traffic feeders.
Asaglobalshowcaseandamust-havepresencefortheworld’sbest-in-classretailers,HarbourCityisbestpositionedtocreatetheultimatecustomerexperience.Solidretailers’demandunderscoredHarbourCity’scompetenceinattractingnewdifferentiatingretailerstocreatewin-wincollaborationsinacompetitivemarket.
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Newadditionsincludingba&sh,JohnHardyandMr&MrsItalyfurtherredefinedtheretailexperience.HarbourCitywelcomedaspateofpremiumdebutstodelivernewsurprises,ofwhichHongKongdebutsincludedAdore,ERES,EveLom,LittleMO&Co.andYvesSalomon,whileLaurèl,St.Johnandtheworld’sfirstMichelin-starredRamenTsutaestablishedtheirKowloondebuts.Iconicpop-upstores,includingChaumet,Chloé(exclusive),Coach(exclusive)andEstéeLauder&TomFord,werealsointroducedtoaddtotheappealofthemall.RenownedfashionbrandshavebeeneyeingexpansionatHarbourCity.TheseincludedMCM,Moncler,PhilippPleinandRogerVivier.Abercrombie&Fitchwillre-entertheHongKongmarketwithafreshconceptstoreatHarbourCity,targetedforopeninginthesecondhalfof2017.
Constant re-tenanting and effective value-creation initiatives continued to generate high levels of satisfaction for visitors.
TheCheesecakeFactory,arenownedcasualdiningbrandfromAmerica,celebratedthelong-awaitedopeningofitsHongKongdebutinMay2017.ModelledontheoriginalstoreinBeverlyHills,itsuccessfullyalluredcrowdsandreceivedstrongcustomerrecognition.Furtherexcitementsincludedtherecognitionsoffoureateryoutlets,namelyChinaTang,ÉPURE,SushiTokamiandYeShanghai,inthe“MICHELINGuideHongKong/Macau2017”.OtherrecentopeningsincludedtheHongKongdebutofDuHsiaoYueh,awell-knowntraditionalTainanrestaurantwithover100yearsofhistory.
Targetedforopeninginthefourthquarterof2017,thenewextensionbuildingatOceanTerminal(“OTE”)commandingafascinating270-degreepanoramaofVictoriaHarbourissettoaddgrowthimpetus.Thewest-facingextensionexhibitingthebestsunsetandnightviewsofHongKongwillcomprise11diningoutletswithalfrescoareaandupgradedcruiseterminalfacilities.Theexcitingeateriesincludingànu,retrouvez-vous,AnaTen,PaperMoon,TsukadaNojo,XiheYayuan,andafineChinesediningrestaurantoperatedbyClubCubic,willcreatenewgastronomicexperiencesanddriveincrementalpatronage.Settinganewstandardoflifestyleexperience,thestrikingOTEwillemergeasanewiconintown.
HarbourCitycontinuedtocaptivatecrowdsthroughspectacularmarketingcampaigns.Theannualmegaevent“ChocolateTrail”withathemeof“AllYouEatisLOVE”thisyearwasheldtodelightdevoutchocolatefans.Designedtopromote“ArtinLiving”,theHarbourArtFairfeaturingaline-upof50KoreangalleriesandfocusingoncontemporaryartworkswaspresentedatMarcoPoloHongkongHotelaccompaniedwitharttalksanddocents.SoloexhibitionsoffourselectedKoreanartistswerestagedindifferentpartsofthemallasanextensionoftheFair.
Office
Revenueincreasedby2%toHK$1,235millionreflectingpositiverentalreversionandstablerentsfornewcommitments,despitetheintensifyingsupply-sidecompetition.Occupancyratewas96%attheendofJune.Leaserenewalretentionratewas62%.
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Times Square
Overallrevenuedecreasedby1%toHK$1,415millionandoperatingprofitby1%toHK$1,285million.
Retail
Revenueretreatedby2%toHK$1,065millionnotwithstandingamodestincreaseinpassingrent.Suchdeclinewasprimarilyduetothereductionoflettablearea(4%oftotal)forshopamalgamationhousingtwoanchors,theFacesssandLEGOCertifiedStore,aswellasongoingtenantmixreshuffling.Occupancyratewas96%.Tenantsalesdeclineconsiderablynarrowedto4.3%duringtheperiod.Foottrafficremainedhealthy.
TimesSquare,amongthemostsuccessfulverticalmallsglobally,hasestablisheditselfasthecoreofthe“GreaterTimesSquare”clusterinCausewayBay.Itsunparalleledpositioningandmanagementexpertisecontinuetodrivecelebratedretailers’appetiteforopeningsorexpansionattheprominent17-levelshoppinglandmark.Constantvalue-accretiveinitiativesincludingtheestablishmentofthe“KidsSquare”on13Afloorandtheconversionofthe9thandpartofthe10thfloorintoalifestylehubfurtherreinforcethemall’sdifferentiationinthevibrantretailhub.
Inabidtocreatenewexperiencesforrepeatvisitorsandtoattractnewcomers,theretailofferwasproactivelyenhancedwithnewadditionsincludingba&sh,JohnMastersOrganics(HongKongdebut),MichaelKorsandProteca&ACE.Theopeningofa3,385-square-footLEGOCertifiedStore(HongKongIslanddebut)inearlyJuly2017furtherstrengthenedthelifestylecluster.Facesss,abeautycategorykillertakingupover6,450squarefeet,alsoopenedinthesame month.
Excitementalsoliesintheeclecticcollectionofdiningoptionsintroducedfromacrosstheglobetodazzlediners.TheseincludedPetitPretandtheHongKongdebutofLaCréation&Châteraisé.
Exclusivemarketinginitiativesandinspiringculturalenrichmentactivitiesforthecommunityhavehadprovensuccess.TheseincludedthePicassoandJacquelineExhibitionwhichwowedvisitorswiththecuratedcollectionof13preciousmasterpiecesbythelegendaryartistflowninallthewayfromtheMuseuPicassoinBarcelona.
Office
Revenueincreasedby1%toHK$350milliononfavourablerentalreversions.Occupancyratewas98.7%attheendofJune.Leaserenewalretentionratewas64%.
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Plaza Hollywood
Revenueincreasedby6%toHK$287millionandoperatingprofitby8%toHK$228million.Occupancyratewas97%attheendofJune.
ThetremendousgrowthopportunitiesinKowloonEast,alivelyandalternativeCBD,strengthenPlazaHollywood’spositionasaleadingshoppingdestinationintheregion.PlazaHollywoodhasnotonlyauniquecriticalmasshosting259retailoutlets,25restaurants,andapurpose-builtstadiumhousingsix-screencinemamultiplexwith1,614seats,butalsoahighlyefficientlayout(65%ofGFAislettable).Itsdeliberatedesignwithouttowersatopalsoallowsmaximumflexibilityforfutureplanning.Retailofferenhancementandinnovativemarketingstrategiescontinued to create value and drive growth.
Other Hong Kong Properties
Wheelock House and Crawford House
Highoccupancyandpositiverentalreversionsunderpinnedbothproperties’steadyperformances.Theofficeswere97%letwhiletheretailspacesofCrawfordHouse(includingZara’slargestflagshipintown)were96%occupied.
CHINA
Despitetheadverseimpactoftheunfavourablecurrencymovements,revenueincreasedby4%toHK$1,246millionandoperatingprofitby6%toHK$732millionontranslationtoHongKongdollars.
In Operation
Chengdu International Finance Square (“IFS”)
Overallrevenueincreasedby15%toHK$508millionandoperatingprofitby24%toHK$259million.ProventrackrecordandunmatchedsalesproductivityreinforcedChengduIFSdifferentiation in the western China region.
Retail
Revenueincreasedby18%toRMB367million.Occupancyratewas99%attheendofJune.Tenants’salespostedarobustgainof30%whilefoottrafficgrewby22%.
Theenviablelocation,criticalmassandhigh-calibremanagementoftheChengduIFSmallunderlineditsleadingpositionintheregion.Theaward-winningtrendsettinglandmarkdemonstrateditsabilitytoattractbest-in-classretailersandtocreatewin-winpartnerships.Itsexquisitecollectionofnearly300globalpremiumbrands,withover100debutsinChinaWest,fostersexceptionalbranddiversityandsetsanewstandardofretailexperience.ThecompellingentertainmentofferingsincludinganIMAXmovietheatreandaniceskatingrinksuccessfullylurecrowds,whilethe15-metre-talloutdoorgiantpandaartinstallationandthe7,700-square-metreSculptureGardenhaveproudlybecomefavouritephotogenicdestinationsofthecity.Inabidtoenhancethecustomerjourney,tenantmixwasfurtheroptimisedwithnewadditionsincludingluxurytimepiecebrandVacheronConstantin,sportsandleisurebrands,Fjällräven,NikeJordanandOnitsukaTiger.
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Powerfulmarketingcampaignsplayapivotalroleinsecuringshoppersflow.Anunprecedented“sisterstreets’partnership”wasannouncedbetweenChengduIFSandLeComitéSaintGermaindesPrésofParis,fosteringSino-Frenchexchangeandco-operationinart,culture,businessandtourism.Theworld’sdebutofthe180-metre-longSonicRunway,acontemporaryaudio-visualartavenue,waslaunchedonHongxingRoadwithagloriousshowcaseofsonicartbasedontheintegrationofscience,technologyandartattheCDIFSInternationalFashionWalk.Otherenthrallingeventsincluded“RockURooster”ChineseNewYearInteractiveArtExhibitionandDisney“BeautyandTheBeast”MovieExhibition.
Chengdu IFS continued to garner new distinguished awards including “ICSC China Shopping Centre&RetailerAwards2017–SilverAwardforMarketingExcellence”,aswellas“AsianLicensingAwards2016–BestLocation-BasedorExperientialInitiativeoftheYear”byInternationalLicensingIndustryMerchandiser’sAssociation.
Office
Thethreetop-notchGradeAofficetowers,raisingthebarforfutureworkplace,representthemostpreferredlocationformultinationals,financialinstitutionsandmajorcorporationsinChinaWest.Itiswellpositionedasanoptimalmarketplacefortenantstoconductseamlessbusinessinteraction.Embarkingonaselectivetenantstrategy,morethan125,000squaremetres(46%oftotalGFA)havebeenleasedtopremiumtenants,withrentalratessecuredamongthehighestinthecity.
IFS Residences
InauguratedinNovember2016,ithasestablisheditselfasoneofthemostexclusiveandpreferredservicedresidenceswithsuperbserviceinChengdu.Comprising150luxuriousapartments,itiscurrentlyaccommodatingeliteentrepreneursandexpatriatesofmultinationalcorporations.
Shanghai Wheelock Square (“SWS”)
RepresentingthemostcompellingofficeaddressesformultinationalsandmajorcorporationsinPuxi,thetallestskyscraperat270metresinthedistrictdeliveredsteadyperformance.SWSboastsaprominentlocationwithunparalleledaccessibility,rightoppositetoJing’anTempleMetroStationfromwherefrequenttrainscommutetoPudongInternationalAirportandadjacenttotheYan’anelevatedexpressway.ItalsositsbetweentheBundandZhongshanXiRoadwithHongqiaoInternationalAirportfurthertothewest.Totalnewcommitmentsduringtheperiodreached10,755squaremetres.Occupancyratewas88%attheendofJune.Leaserenewalretentionratewasmaintainedat66%,withsolidrentalreversion.
Acrossarangeofhealthyandcreativeevents,the4thverticalrun,anannualhealth-promotingeventaimingtoraisethespiritof“SportsforAll”,attractedmorethan400participantsincludingprofessionalmarathonrunnersandthewhite-collaredinSWS.
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Shanghai Times Square
TheexclusiveretaildestinationhostingthelargestLaneCrawfordstoreintheMainlandandamegalifestylespecialtystorecity’superisstrategicallylocatedinthepremiershopping,entertainmentandbusinesshubofHuaihaiZhongRoad.Occupancyratewas97%attheendofJune.Creativesports-themedmarketingcampaignswererolledoutinthewakeoftheathleisureboom.TheseincludedNikeandOneFoundationrunningclub,Valentine’straining“Lovetogether.Exercisetogether”programme,andKidsSportsDay.OtherinterestingeventsincludedNaked-eye3DDomeTheatreandkidscurryworkshop.
Theofficeswere92%let.Leaserenewalretentionratewas60%.
Chengdu Times Outlet
The63,000-square-metreChengduTimesOutlet,amongthemostvisitedoutletdestinationsacrossChina,ishometoover250internationalbrandsatattractiveprices.SoliddomesticconsumptionfromChina’semergingmiddleclassdroveasolidgrowthof11%inretailsalesduring the period.
Changsha Times Outlet
Openedinlate2016,the72,000-square-metreoutletenjoysconvenientaccesstomultiplemajormotorways(includingmetroandhigh-speedexpressway)thatlinkChangshatovariouspopularnationaltouristattractions,includingZhangjiajieandDongtingLake.EmulatingthesuccessoftheGroup’sTimesOutletbrand,ChangshaTimesOutletisaone-stopintegratedshoppingandleisurelandmark,hostingmorethan230internationalandtoplocalapparelsandlifestylebrandsaswellaseateries.Occupancyratewas73%attheendofJune.
Under Development
TheGroupisbuildinganexcitingpipelineofIFSdevelopmentsthatwillcontinuetocreatelong-termvalue.TheremarkableperformanceofHarbourCityinHongKongandChengduIFSsetsanexcellentmodelforotherfutureIFSdevelopmentsandcreatessynergy.TheupcomingIFScomplexesinChongqingandChangshawilltapintotheGroup’smanagementexpertiseandexperienceinoperatingsomeofthemostproductiveretail-cum-officedevelopments.Therespectivenewmegamallsareexpectedtotapthehugeexperience-basedconsumptionmarketsintheregionsandtotaketheretailexperiencetothenextlevel.Thepromisingretailpre-leasingstatusachievedalsobearstestimonytoretailers’confidenceintheGroup’svaluecreationcapabilityandtheuntappedpotentialoftherespectivecities.Thisisparticularlyapparentforthoseretailerswhoarenewtothemarketsinvolved.
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Chongqing IFS
ProminentlylocatedinJiangbeiDistrict(Chongqing’snewCBD),the50%-ownedChongqingIFSwillbethemostmassivemixed-usecomplexinthedistrictenvisioninganiconic300-metrelandmarktowerandfourothertowersatopa114,000-square-metreretailpodium.TheGradeAofficesandNiccoloChongqing,thesecondluxuriousNiccoloHotelintheMainland,willreinforcethepositionofthedevelopmentasaboutique-sizedHarbourCity.
Themallispoisedtobeaniconicretaildestinationofferinganexceptionalone-stoplifestyleexperienceinthevibrantalternativeCBD.Currently,over90%oftheretailfloorplatesareleasedorunderoffertokeyanchorsandvariousmajortenants.Thecoveteddestinationwillbethefirstinthecitytoassembleanampleandcomprehensivecollectionofmorethan150retailersincluding80renownedglobalbrands,ofwhich20aredebutsinChongqingincludingAlexanderMcQueen,BrooksBrothers,Dior,Fendi,SaintLaurent,ToryBurchandValentino.
AdelectablerangeofdiningoptionsincludingABCCookingStudio,KITAYAMA,NYNightMarketandVinotekawillbeintroducedtodelightdiners’palate,whilethedelightfulentertainmentofferingsincludingTheRinkandPALACEcinemaaresettoprovidevisitorswithtrulyintegrated“shoppertainment”experiences.
88%ofofficeTowerTwo,ThreeandFivewassold.ThemallandNiccoloChongqingarescheduledtoopeninthethirdquarterof2017.
Changsha IFS
Changsha IFS is set to differentiate itself in the Central China metropolis with its gigantic 254,000-square-metremall,themostenviablelocationandtheGroup’sprovenmanagementcapabilities.Targetedtoopeninthefirstquarterof2018,themegamallwillbehometoamyriadoftheworld’smostaspirationalretailersandthemostcovetedshopping,dining,lifestyleandleisuredestinationinHunanprovince.Retailpre-leasingstatuswasencouraging,withover90%oftotalretailareasleasedandunderoffertoretailers.
Representingtheultimateworkspacefortomorrow,thetop-notchofficetowersarewell-positionedtobethemostdesirableaddressesforfinancialinstitutionsandmajorcorporationsbasedintheregion.Handovertotenantsisscheduledtocommencebythefourthquarterof2017.
TheopeningofNiccoloChangsha,thethirdNiccolohotelintheMainland,atChangshaIFSistargetedforthefirstquarterof2018.
Fullcompletionoftheprojectisscheduledfor2018.
Suzhou IFS
The80%-ownedSuzhouIFSisa450-metrelandmarkdevelopment(GFA:299,000squaremetres)featuringGradeAoffices,skyresidencesandNiccoloSuzhou.SquarelylocatedinthenewCBDoverlookingJinjiLakeandadjacenttoXinghuStreetMTRStation(Line1),thedevelopmentisontrackforcompletionstartingin2018or2019.
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DEVELOPMENT PROPERTIES
DPsalesdecreasedby23%toHK$15.3billionandrevenueby19%toHK$11.2billion,inclusiveofjointventuresandassociatesonanattributablebasis.Coreprofit,however,surgedby161%toHK$2.3billion,thankstotheincreasedrecognitionsofgood-marginprojectsincludingMountNicholsoninHongKongandSuzhouTimesCity.
HONG KONG
MountNicholson,a50:50jointventuredevelopmentwithNanFungGroup(project’stotalattributableGFA:162,000squarefeet)isafabulouslandmarkforluxuryliving.Itfeaturesexclusiveandultra-luxuryresidencesboastingastunninguninterruptedviewoverVictoriaHarbour.Duringtheperiod,twohousesandsixapartmentsweresoldforcombinedproceedsexceedingHK$3.1billionoranaverageofHK$73,600persquarefoot(houses:HK$1.4billionoranaverageofHK$85,900persquarefoot;apartments:HK$1.8billionoranaverageofHK$66,100persquarefoot).AnotherhousewassoldforHK$645millionoranaverageofHK$80,100persquarefootinJuly2017.
Thelatestgeneralbuildingplanofthe15%-ownedYauTongjointventureprojecthasbeensubmittedinearly2017.
CHINA
With563,900squaremetresofGFAcompletedandrecognisedduringtheperiod(2016:872,000squaremetres),revenuedecreasedby30%toHK$9,095millionbutoperatingprofitincreasedby1%toHK$2,355million,inclusiveofjointventuresandassociatesonanattributablebasis.
Withthelatestroundofcoolingmeasuresimposedbythegovernment,theGroup’sattributableinterestincontractedsalesdecreasedby27%toRMB11.9billion.Therestrictivepoliciesareexpectedtoaddtouncertaintiesoverthetradingconditionsandtodepictachallengingoutlook.AttheendofJune,thenetorderbookincreasedtoRMB30.2billionfor1.1millionsquaremetres.
InEasternChina,variousprojectsinShanghai,Suzhou,HangzhouandWuximetwithgooddemand.ShanghaiPudongE18sold35unitsforRMB1.4billion.InSuzhou,Bellagiosold335unitsforRMB0.8billion.InHangzhou,GreentownZhijiangNo.1sold123unitsforRMB0.7billiononanattributablebasis.InWuxi,RiverPittiandTimesCitysoldinaggregate495unitsforRMB0.9billion.ProjectsonsaleinotherregionsofChinaalsoreceivedencouragingresponses.Inparticular,PearlontheCrowninBeijingandTheSceneryBayinTianjinsoldinaggregate163unitsforRMB1.0billiononanattributablebasis.
AttheendofJune,theDPlandbankwasmaintainedat3.4millionsquaremetres.
TheGroupcontinuestotakeadisciplinedandselectiveapproachtolandpurchases,strategicallyfocusing on first-tier and top second-tier cities.
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OTHER HONG KONG PROPERTIES
The Peak Portfolio
Wharf’sPeakPortfolioredefinestheconceptofluxurylivingwithalandmarkcollectionofthemostrespectedandprestigiousresidencesnestledonthePeak.Epitomizingauniqueandexclusivelifestyleatthemostsought-afteraddressintown,thesedevelopmentsarepoisedtooffer the ultimate destination for the most discerning residents.
Superstructure/foundationworksforthere-developmentofthePeakPortfolioincluding1PlantationRoad(20houses),11PlantationRoad(7houses)and77PeakRoad(8houses)areprogressing to plan.
Kowloon East
TherevitalisationofKowloonEastintoavibrantCBD2revealsmassivepotentialfortheGroup’sstriking“KowloonEastWaterfrontPortfolio”ofnewdevelopments.EnjoyingacompellingHarbourviewandspanninga500-metrecoastline,thisthrivingcollectioncomprises8BayEast(a534,000-square-footre-developmentoftheformerWharfT&TSquare),KowloonGodown(pendingre-development)andparentcompanyWheelock’sOneBayEast(comprisingtwoofficetowersalreadysoldtoandoccupiedbyManulifeandCitigrouprespectively).Superstructureworksfor8BayEastisunderway.
WHARF HOTELS
Currently,theGroupmanages14hotels(sixownedbytheGroup)inChina,HongKongandthePhilippinesunderthelegacybrandofMarcoPoloHotelsandthenewluxurybrand,NiccoloHotels.ThestylishcollectionofcontemporaryurbanchicNiccolohotelstrulyepitomisesunderstatedluxurywithaseamlessblendofexquisitedesignandgracioushospitality.Whilethehotelsaremodernsophisticatedspaces,thetimelesspleasuresofimpeccablehospitalityarethekeytotheirsuccess.Everytouchpointisdetailedtomakefirstclasstraveleffortlesslyluxuriousforcaptainsofindustryandleadersinstyle.
Thisbrandevolutionhasproventobearesoundingsuccess.NiccoloChengduatChengduIFS,thefirstNiccoloopenedinApril2015,catapultedthebusinesstonewheightsandsetanewstandardintheregion.Itremainsthecity’smarketleaderinroomyieldandhasearnedahostofreputableawardssinceopening,including“BestBusinessHotels”inthe“2017CondéNastTravelerChinaGoldList”.ItsetsastrongmodelforthecomingthreeNiccolohotelsintheIFScomplexesinChongqing,ChangshaandSuzhouwhichareprogressingtoplan.
TheMurray,HongKong,aNiccoloHotel,underconversionfromCentral’slandmarkMurrayBuilding,isslatedtoopeninlate2017.The336-roomluxuryhotelisbestpositionedtobefitthecity’smostprestigiousvisitorsandtobecomethenewepicentreforeventsandcelebrations.AnarrayofdiningconceptsincludingMurrayOnTheRoof(BarandRestaurant),TheTaiPan(ModernEuropean),MurrayLane(theLobbyBar),TheGardenLoungeandtheMichelin-starredGuoFuLou(Cantonese),willbeintroducedtotaketheirplaceamongstthemostpopulardiningvenuesinHongKongandtocaptivatethecity’sdiningconnoisseurs.
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ThesefournewNiccolohotelswillbringtheGroup’shotelportfolioto18hotelsinthenearfuture.TheexcitingpipelineisinlinewiththeGroup’svisiontoexpanditshotelpresenceinAsiaPacific.Duringtheperiod,theNiccoloandMarcoPolohotelbrandswereofficiallygroupedunderWharfHotelsManagementLimited,anumbrellaidentityforthetwobrands.ItnotonlymarksanexcitingnewchapterfortheGroup’sdevelopmentinhotelbusiness,butalsoallowsfordifferentiatedanddefinedstrategiestobedevelopedforbothbrands.
MODERN TERMINALS
GlobaltradeflowsstagedtentativesignsofrevivalastheU.S.andEuropeaneconomieswentthroughatepidrecovery.SouthChina’scontainerthroughputincreasedby7%whileShenzhen’sandKwaiTsing’sthroughputincreasedby4%and11%respectively.MarketsharesofShenzhenandKwaiTsingwere59%and41%respectively.
ModernTerminals’contractedthroughputinHongKongincreasedbyarobust17%to2.7millionTEUsthatoutperformedtheoverallmarket.IntheMainland,throughputatDachanBayinShenzhendeclinedby11%to0.6millionTEUs,mainlyduetonewcarrieralliancedeployments,whilethatatTaicangInternationalGatewayinSuzhougrewby11%to1.2millionTEUs.ThroughputatShekouContainerTerminalsinShenzhen,inwhichModernTerminalsholdsa20%stake,postedan8%growthto2.7millionTEUs.ChiwanContainerTerminalinShenzhen,inwhichModernTerminalsholdsan8%attributablestake,handled1.1millionTEUs.
ConsolidatedrevenueimprovedtoHK$1,361million(2016:HK$1,234million),drivenbyacontinuedchangeinthroughputmixtrendwithmorebargeandtransshipmentinthebusinessmix.OperatingprofitincreasedtoHK$349million(2016:HK$290million).
InJune2017,ModernTerminalssoldtheremaining50%ofitsindirectequityinterestinTaicangcontainerportbusinesstoNingboPortCo.Ltd.,withtheremainingdisposalgainbookedduringthe period.
TheoperatingenvironmentmayremainchallengingunderpinnedbypoliticaluncertaintiesincludingglobaltradeprotectionismandtheprospectofBrexit.However,ModernTerminalshasmadeeveryefforttoimproveoperationalefficiencywithvariousinitiatives.Itisalsomakingsignificantinvestmentsinitsportinfrastructureandquaycraneequipmenttosecuremarketshareandtodrivegrowthinthecompetitivemarket.
i-CABLE
Currently,i-CABLEhasclearedallmajorregulatoryhurdlesfortheintroductionofForeverTop(Asia)LimitedasitsnewinvestorandthenextstepistoproceedwithitsOpenOffer(expectedcompletion:14September2017)andtheLoanCapitalisation(expectedcompletion:September/October2017).
Aconditionalspecialdividendbywayofdistributioninspecieofi-CABLESharesheldcurrentlybytheGrouptoitsShareholdersonaproratabasishasbeendeclaredbytheBoard.
13The Wharf (Holdings) Limited Interim Report 2017
Existingfundingcommitmentsfori-CABLEwillnotbeextendeduponexpiry.Nonetheless,theGroupwillconvertitsdebtsofi-CABLE,amountingtoHK$300million,toshares,anddistributetheminspecietoitsshareholdersatalaterstageuponcompletionoftheLoanCapitalisation.CompletionofalldistributioninspecieisscheduledforSeptember/October2017.ThesewillmarktheGroup’scompleteexitofCommunication,MediaandEntertainmentsegment.
STRATEGIC REVIEW ON IP
Followingastrategicreviewannouncedinour2016FinalResultsAnnouncement,theCompanyhassubmittedaproposaltotheStockExchangeinaccordancewithPracticeNote15ofTheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimitedtodemergeitswholly-ownedsubsidiaryWharfRealEstateInvestmentCompanyLimited(“WharfREIC”)foraseparatelistingbywayofintroduction.TheproposalhasbeenapprovedbytheStockExchange.
WharfREICisintheprocessofpreparingitsapplicationtotheStockExchangeforthelistingof,andpermissiontodealin,WharfREICsharesontheMainBoardoftheStockExchange.
WharfREICwillbeprimarilyfocusedoninvestmentpropertiesinHongKongandwillalsoholdtheCompany’s72%-ownedlistedsubsidiary,HarbourCentreDevelopmentLimited.WharfREICwillholdaportfolioofsixpremiumqualityinvestmentpropertiesinHongKong,namelyHarbourCity,TimesSquare,PlazaHollywood,CrawfordHouse,WheelockHouseandTheMurray(beingconvertedintoaluxuryhotelforopeninginlate2017).Thisportfolioofabout11millionsquarefeetofGFAhasatotalvalueofoverHK$230billionandanannualturnoverofoverHK$13billion.
Afterthedemerger,theCompanywillbeprimarilyfocusedoninvestmentpropertiesanddevelopmentpropertiesinMainlandChina,otherHongKongproperties,aswellaslogisticsandhotel management.
Theproposeddemergerisatanearlystage.TheapplicationforthelistingofWharfREIChasnotyetbeensubmittedtotheStockExchangeandthelistinghasnotyetbeenapprovedbytheStockExchange.TheimplementationofthedemergerissubjecttothefinaldecisionsoftheboardsofdirectorsofWheelock,theCompanyandWharfREIC.Accordingly,shareholdersandpotentialinvestorsoftheCompanyshouldbeawarethatthereisnoassurancethattheproposeddemergerandseparatelistingofWharfREICwilltakeplaceorastowhenitmaytakeplace.FurtherannouncementswillbemadebytheCompanyasandwhenappropriate.SubsequenttothedateofthisInterimReport,WharfREICsubmittedanapplicationforlisting(FormA1)totheStockExchangeon4September2017.
14 The Wharf (Holdings) Limited Interim Report 2017
FINANCIAL REVIEW
(I) REVIEW OF INTERIM 2017 RESULTS
Groupcoreprofitroseby22%year-on-yeartoHK$7,271million(2016:HK$5,972million)inthefirsthalfof2017.Againstthebackdropsofthechallengingmarketconditions,InvestmentProperties(“IP”)managedtoachieve3%coreprofitgrowthtoHK$4,777millionandDevelopmentProperties(“DP”)surgedby161%toHK$2,306million.
Profitattributabletoshareholdersincreasedby26%toHK$8,441million(2016:HK$6,725million)withhigherIPrevaluationsurplusofHK$1,171million(2016:HK$525million).
Revenue and Operating Profit
IPrevenueandoperatingprofitcontinuedgrowingby4%toHK$7,927million(2016:HK$7,644million)and5%toHK$6,674million(2016:HK$6,377million),respectively.InHongKong,bothrevenueandoperatingprofitincreasedby4%.Mainlandrevenueroseby4%andoperatingprofitroseby6%inHKDterms,orroseby9%and11%inRMBterms.
DPrecognised29%lowerpropertysalestoHK$5,964million(2016:HK$8,409million)mainlyfromMainlandprojectsbutfor32%higheroperatingprofittoHK$1,730million(2016:HK$1,311million),benefittingfromhighermarginsachievedforcertainMainlandprojects.Togetherwithjointventureprojects,DPcoreprofitroseby161%toHK$2,306million(2016:HK$885million),includingMountNicholsoncontributioninHongKong.
Hotelrevenueroseby5%toHK$774million(2016:HK$740million)andoperatingprofitby49%toHK$155million(2016:HK$104million).HongKongrevenueincreasedwithimprovedoccupancieswhilethenewlyopenedhotelsinMainlandChinahavestartedtocontribute.
Logisticsrevenuegrewby11%toHK$1,424million(2016:HK$1,286million)andoperatingprofitby22%toHK$358million(2016:HK$293million)resultingfrommorethroughputhandledbyModernTerminals.
CMEdisposedWharfT&TinNovember2016withi-CABLEremaininginthesegment,resultingin63%revenuedeclinetoHK$641million(2016:HK$1,715million)andincreaseinoperatinglosstoHK$222million(2016:profitofHK$78million).
Investmentandothersrevenueroseby18%toHK$449million(2016:HK$382million)andoperatingprofitby19%toHK$248million(2016:HK$208million)chieflyduetoincrease in interest income.
Consolidatedrevenuefellby15%toHK$17,063millionbutoperatingprofitroseby6%toHK$8,553millionforthefirsthalfoftheyear.
15The Wharf (Holdings) Limited Interim Report 2017
DP Sales
DPcontractedsales,inclusiveofjointventureprojectsonanattributablebasis,droppedby23%toHK$15,299million(2016:HK$19,797million).
Mainlandcontractedsalesdroppedby27%toRMB11,908million(2016:RMB16,250million).Salesrecognitiondroppedby30%toHK$9,095million(2016:HK$13,049million)butoperatingprofitroseby1%toHK$2,355million(2016:HK$2,328million).NetorderbookincreasedtoRMB30,227million(December2016:RMB27,436million).
HongKongcontractedsales,mainlyattributabletoMountNicholsonjoint-venture,amountedtoHK$1,579million(2016:HK$785million).SalesrecognitionincreasedtoHK$2,119million(2016:HK$785million),whichcontributedanoperatingprofitofHK$1,045million(2016:HK$349million).
Fair Value Gain of Investment Properties
ThebookvalueoftheGroup’sIPportfolioasat30June2017increasedtoHK$324.4billion(2016:HK$319.3billion)withHK$306.0billionthereofstatedatfairvaluebasedonindependentvaluation,whichproducedarevaluationgainofHK$1,529millionfortheperiod(2016:HK$495million).TheattributablenetrevaluationgainofHK$1,171million(2016:HK$525million),aftertakingintoaccounttherelateddeferredtaxandnon-controllinginterests,wascreditedtotheconsolidatedincomestatement.
IPunderdevelopmentintheamountofHK$18.4billioniscarriedatcostandwillnotbecarriedatfairvalueuntiltheearlieroftheirfairvaluesfirstbecomingreliablymeasurableor the dates of completion.
Finance Costs
FinancecostschargedtotheconsolidatedincomestatementamountedtoHK$589million(2016:HK$322million),includinganunrealisedmark-to-marketgainofHK$50million(2016:gainofHK$352million)onthecrosscurrencyandinterestrateswapsinaccordancewith prevailing accounting standards.
TheGroup’seffectiveborrowingratefortheperiodroseto3.3%(2016:2.9%),mainlyduetohigherproportionofborrowingsathigherinterestrate.Excludingtheunrealisedmark-to-marketgain,financecostsbeforecapitalisationwereHK$808million(2016:HK$988million),representingadecreaseofHK$180million.FinancecostsaftercapitalisationwereHK$639million(2016:HK$674million),representingadecreaseofHK$35million.
Share of Results (after tax) of Associates and Joint Ventures
AttributableprofitfromassociatesdecreasedtoHK$361million(2016:HK$513million)withlowerprofitcontributionsfromMainlandDP.
JointventuresincreasedprofittoHK$986million(2016:HK$485million)attributabletoMountNicholsonprojectinHongKong.
16 The Wharf (Holdings) Limited Interim Report 2017
Income Tax
TaxationchargefortheperiodwasHK$2,434million(2016:HK$1,705million),whichincludeddeferredtaxationofHK$353million(2016:creditofHK$12million)providedforthecurrentperiod’srevaluationgainattributabletoinvestmentpropertiesintheMainland.
Excludingtheabovedeferredtax,thetaxchargeincreasedby21%toHK$2,081million(2016:HK$1,717million)mainlyduetohigherprofitsfromIPandChinaDPsegments.
Non-controlling Interests
Groupprofitattributabletonon-controllinginterestsincreasedtoHK$324million(2016:HK$214million),reflectingtheincreaseinnetprofitsofcertainnon-wholly-ownedsubsidiaries.
Profit Attributable to Equity Shareholders
GroupprofitattributabletoequityshareholdersfortheperiodamountedtoHK$8,441million(2016:HK$6,725million),representinganincreaseof26%.BasicearningspersharewereHK$2.78,basedonweightedaverageof3,033millionshares(2016:HK$2.22basedon3,031millionshares).
ExcludingthenetIPrevaluationgainofHK$1,171million(2016:HK$525million),Groupprofitattributabletoshareholdersfortheperiodincreasedby17%toHK$7,270million(2016:HK$6,200million).
Groupcoreprofitroseby22%toHK$7,271million(2016:HK$5,972million),ofwhich66%wasattributabletoIPand32%toDP.CoreearningspersharewereHK$2.40(2016:HK$1.97).
CoreprofitisaperformanceindicatoroftheGroup’smajorbusinesssegmentsandarrivedatafterexcludingnetIPrevaluationgain,theattributablenetmark-to-marketandexchangelossofHK$188million(2016:gainofHK$228million)oncertainfinancialinstrumentsandothernon-recurrentgainsofHK$187million.
17The Wharf (Holdings) Limited Interim Report 2017
(II) LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL COMMITMENTS
Shareholders’ and Total Equity
Asat30June2017,shareholders’equityincreasedbyHK$7.7billiontoHK$324.5billion(2016:HK$316.8billion),equivalenttoHK$106.94persharebasedon3,034millionissuedshares(2016:HK$104.48persharebasedon3,032millionissuedshares).
TheGroup’stotalequityincludingnon-controllinginterestsincreasedbyHK$7.7billiontoHK$333.1billion(2016:HK$325.4billion).
Assets and Liabilities
TheGroup’stotalassetsasat30June2017decreasedtoHK$438.5billion(2016:HK$443.8billion).Totalbusinessassets,excludingbankdepositandcash,financialanddeferredtaxassets,increasedtoHK$404.1billion(2016:HK$403.0billion).
Geographically,theMainlandbusinessassets,mainlycomprisingpropertiesandterminals,amountedtoHK$120.4billion(2016:HK$121.0billion),representing30%(2016:30%)oftheGroup’stotalbusinessassets.
Investment properties
IncludedintheGroup’stotalassetsistheIPportfolioofHK$324.4billion,representing80%oftotalbusinessassets.CoreassetsinthisportfolioareHarbourCityandTimesSquareinHongKong,whichwerevaluedatHK$165.0billion(excludingthethreehotels)andHK$54.5billion,respectively,togetherrepresenting68%oftheIPportfolio.MainlandIPamountedtoHK$62.3billion,mainlyincludingChengduIFSandShanghaiWheelockSquare,aswellasChangshaIFSandSuzhouIFSwhichwereunderdevelopmentandstatedatcostofHK$18.4billion.
Properties for sale
DPassetsdroppedtoHK$19.8billion(2016:HK$23.9billion),reflectingthesalesofMainland DP portfolio during the period.
18 The Wharf (Holdings) Limited Interim Report 2017
Interests in associates and joint ventures
InterestsinassociatesandjointventuresamountedtoHK$29.1billion(2016:HK$31.1billion),mainlyrepresentingvariousjoint-ventureDPprojectsundertakenintheMainlandandHongKong.
Deposits from sale of properties
DepositsfromsaleofpropertiesamountedtoHK$19.6billion(2016:HK$18.9million),representing contracted sales in Mainland China pending revenue recognition in the comingyears.
Debts and Gearing
TheGroup’snetdebtasat30June2017wasreducedbyHK$2.4billionor10%toHK$21.4billion(2016:HK$23.8billion).ThenetdebtwasmadeupofHK$51.2billionindebtsandHK$29.8billioninbankdepositsandcash.IncludedinthenetdebtwereHK$7.2billion(2016:HK$7.1billion)attributabletoModernTerminals,HCDLandothersubsidiaries,whicharewithoutrecoursetotheCompanyanditsothersubsidiaries.Excludingthesenon-recoursedebts,theGroup’snetdebtwasHK$14.2billion(2016:HK$16.7billion).Ananalysisofthenetdebtisasbelow:
30 June2017
31December2016
Net debt/(cash) HK$ Million HK$ Million
Wharf(excludingbelowsubsidiaries) 14,206 16,755Modern Terminals 6,932 8,502HCDL (374) (1,904)i-CABLE 662 484
21,426 23,837
Asat30June2017,theratioofnetdebttototalequitydeclinedto6.4%(2016:7.3%).
19The Wharf (Holdings) Limited Interim Report 2017
Finance and Availability of Facilities
TheGroup’stotalavailableloanfacilitiesandissueddebtsecuritiesasat30June2017amountingtoHK$72.7billion,ofwhichHK$51.2billionwasutilised,areanalysedasbelow:
30 June 2017Available Total Undrawn
Facility Debts Facility HK$ Billion HK$ Billion HK$ Billion
Company/wholly-owned subsidiariesCommittedbankfacilities 29.7 15.2 14.5Debtsecurities 26.1 26.1 –
55.8 41.3 14.5Non-wholly-owned subsidiariesCommitted and uncommitted— Modern Terminals 11.8 7.4 4.4—HCDL 4.2 1.8 2.4—i-CABLE 0.9 0.7 0.2
72.7 51.2 21.5
Oftheabovedebts,HK$7.3billion(2016:HK$6.7billion)wassecuredbymortgagesovercertainIP,DPandproperty,plantandequipmentwithtotalcarryingvalueofHK$19.1billion(2016:HK$17.7billion).
TheGroupdiversifiedthedebtportfolioacrossabundleofcurrenciesincludingprimarilyUnitedStatesdollar(“USD”),HongKongdollar(“HKD”)andRenminbi(“RMB”).ThefundingsourcedfromsuchdebtportfoliowasmainlyusedtofinancetheGroup’sIP,DPand port investments.
Theuseofderivativefinancialinstrumentsisstrictlymonitoredandcontrolled.ThemajorityofthederivativefinancialinstrumentsenteredintobytheGroupareprimarilyusedformanagementoftheGroup’sinterestrateandcurrencyexposures.
The Group continued to maintain a strong financial position with ample surplus cash denominatedprincipallyinRMB,HKDandUSDandundrawncommittedfacilitiestofacilitatetheGroup’sbusinessandinvestmentactivities.Inaddition,theGroupalsomaintainedaportfolioofequityinvestmentswithanaggregatemarketvalueofHK$7.9billion(2016:HK$5.7billion),whichisimmediatelyavailableforliquidationfortheGroup’suse when in need.
20 The Wharf (Holdings) Limited Interim Report 2017
Cash Flows for the Group’s Operating and Investing Activities
Fortheperiodunderreview,theGrouprecordednetcashinflowsbeforechangesinworkingcapitalofHK$8.8billion(2016:HK$8.5billion).ThechangesinworkingcapitalreducedthenetcashinflowfromoperatingactivitiestoHK$5.7billion(2016:HK$12.3billion).Forinvestingactivities,theGrouprecordedanetcashinflowofHK$2.2billion(2016:outflowofHK$7.8billion),mainlyfromdecreaseinadvancestoassociatesandjointventuresoffsettingbyadditionsofIPswhereaslastperiodincludedacquisitionofWheelockHouseofHK$6.2billion.
Major Capital and Development Expenditure and Commitments
TheGroup’smajorcapitalanddevelopmentexpenditureincurredinthefirsthalfof2017isanalysedasfollows:
A. Major capital and development expenditure
Hong Kong Mainland China TotalHK$ Million HK$ Million HK$ Million
PropertiesIP 565 2,072 2,637DP 119 5,671 5,790
684 7,743 8,427
OthersHotels 684 – 684Modern Terminals 129 6 135i-CABLE 109 – 109
922 6 928
Group total 1,606 7,749 9,355
i. IPexpenditurewasmainlyforconstructioncostsoftheMainlandIFSprojects.
ii. DPandIPexpenditureincludedHK$3.3billionforpropertiesprojectsundertakenbyassociatesandjointventures.
iii. ModernTerminals’capitalexpenditurewasmainlyforterminalequipmentwhilethoseofi-CABLEwereincurredsubstantiallyforfacilitiesandequipment.
21The Wharf (Holdings) Limited Interim Report 2017
B. Commitments to capital and development expenditure
Asat30June2017,theGroup’smajorcommitmentstocapitalanddevelopmentexpenditurethataretobeincurredintheforthcomingyearswasestimatedatHK$30.6billion,ofwhichHK$13.4billionwascommitted.Bysegment,thecommitmentsareanalysedasbelow:
As at 30 June 2017Committed Uncommitted Total
HK$ Million HK$ Million HK$ Million
IPHongKong 1,793 469 2,262Mainland China 3,750 6,156 9,906
5,543 6,625 12,168
DPHongKong – – –Mainland China 6,603 10,395 16,998
6,603 10,395 16,998
OthersHotels 899 124 1,023Modern Terminals 332 57 389
1,231 181 1,412
Group total 13,377 17,201 30,578
Propertiescommitmentsaremainlyforconstructioncost,inclusiveofattributablecommitmentstoassociatesandjointventures,tobeincurredbystages.
ThecommitmentsandplannedexpenditurewillbefundedbyGroup’sinternalfinancialresourcesincludingitssurpluscash,cashflowsfromoperations,aswellasbankandotherborrowingsandpre-saleproceeds.Otheravailableresourcesincludeequityinvestmentsavailableforsale.
(III) HUMAN RESOURCES
TheGrouphadapproximately13,300employeesasat30June2017,includingabout2,300employedbymanagedoperations.Employeesareremuneratedaccordingtotheirjobresponsibilitiesandthemarketpaytrendwithadiscretionaryannualperformancebonusasvariablepayforrewardingindividualperformanceandcontributionstotherespectivegroup’sachievementandresults.
22 The Wharf (Holdings) Limited Interim Report 2017
CONSOLIDATED INCOME STATEMENTForTheSixMonthsEnded30June2017—Unaudited
Six months ended 30 June2017 2016
Note HK$ Million HK$ Million
Revenue 2 17,063 20,021Directcostsandoperatingexpenses (6,745) (9,877)Sellingandmarketingexpenses (455) (652)Administrativeandcorporateexpenses (789) (689)
Operatingprofitbeforedepreciation, amortisation,interestandtax 9,074 8,803Depreciation and amortisation (521) (728)
Operating profit 2&3 8,553 8,075Increase in fair value of investment properties 1,529 495Other net income/(charge) 4 359 (602)
10,441 7,968Finance costs 5 (589) (322)Shareofresultsaftertaxof:Associates 361 513Jointventures 986 485
Profitbeforetaxation 11,199 8,644Incometax 6 (2,434) (1,705)
Profit for the period 8,765 6,939
Profit attributable to:Equityshareholders 8,441 6,725Non-controllinginterests 324 214
8,765 6,939
Earnings per share 7Basic HK$2.78 HK$2.22Diluted HK$2.78 HK$2.22
23The Wharf (Holdings) Limited Interim Report 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEForTheSixMonthsEnded30June2017—Unaudited
Six months ended 30 June2017 2016
HK$ Million HK$ Million
Profit for the period 8,765 6,939
Other comprehensive incomeItems that will not be reclassified to profit or loss:Fairvaluechangesonequityinvestments 1,682 (1,456)
Items that may be reclassified subsequently to profit or loss:Exchangedifferenceontranslationofforeignoperations 1,989 (1,775)
Share of other comprehensive income of associates/jointventures 466 (322)
Others 6 2
Other comprehensive income for the period 4,143 (3,551)
Total comprehensive income for the period 12,908 3,388
Total comprehensive income attributable to:Equityshareholders 12,320 3,367Non-controllinginterests 588 21
12,908 3,388
24 The Wharf (Holdings) Limited Interim Report 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAsAt30June2017—Unaudited
30 June 31December2017 2016
Note HK$ Million HK$ Million
Non-current assetsInvestment properties 324,390 319,298Property,plantandequipment 21,455 20,735Interest in associates 12,483 14,437Interestinjointventures 16,633 16,710Equityinvestments 7,886 5,723Goodwillandotherintangibleassets 298 298Deferredtaxassets 686 654Derivative financial assets 196 247Other non-current assets 244 252
384,271 378,354
Current assetsProperties for sale 19,838 23,874Inventories 26 29Tradeandotherreceivables 9 4,374 4,281Derivative financial assets 194 332Bankdepositsandcash 29,781 36,957
54,213 65,473
Total assets 438,484 443,827
25The Wharf (Holdings) Limited Interim Report 2017
30 June 31December2017 2016
Note HK$ Million HK$ Million
Non-current liabilitiesDerivativefinancialliabilities (974) (1,539)Deferredtaxliabilities (11,437) (10,633)Otherdeferredliabilities (312) (305)Bankloansandotherborrowings 11 (41,341) (45,616)
(54,064) (58,093)
Current liabilitiesTradeandotherpayables 10 (19,522) (24,245)Deposits from sale of properties (19,648) (18,937)Derivativefinancialliabilities (407) (685)Taxationpayable (1,850) (1,283)Bankloansandotherborrowings 11 (9,866) (15,178)
(51,293) (60,328)
Total liabilities (105,357) (118,421)
NET ASSETS 333,127 325,406
Capital and reservesShare capital 12 29,589 29,497Reserves 294,867 287,297
Shareholders’ equity 324,456 316,794
Non-controlling interests 8,671 8,612
TOTAL EQUITY 333,127 325,406
26 The Wharf (Holdings) Limited Interim Report 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYForTheSixMonthsEnded30June2017—Unaudited
Shareholders’ equity
Investmentsrevaluation Total Non-
Share and other Exchange Revenue shareholders’ controlling Totalcapital reserves reserves reserves equity interests equity
HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
At 1 January 2017 29,497 (2,024) (3,531) 292,852 316,794 8,612 325,406
Changesinequityfortheperiod:Profit – – – 8,441 8,441 324 8,765Other comprehensive income – 1,567 2,312 – 3,879 264 4,143
Total comprehensive income – 1,567 2,312 8,441 12,320 588 12,908
Shares issued under the share option scheme 92 (8) – – 84 – 84Equitysettledshare-basedpayments – 20 – – 20 – 20Capital repatriation to non-controlling interestsofasubsidiary – – – – – (339) (339)Secondinterimdividendspaidfor2016 (Note8b) – – – (4,762) (4,762) – (4,762)Dividends paid to non-controlling interests – – – – – (190) (190)
At 30 June 2017 29,589 (445) (1,219) 296,531 324,456 8,671 333,127
At 1 January 2016 29,441 (1,118) 2,322 277,083 307,728 9,452 317,180
Changesinequityfortheperiod:Profit – – – 6,725 6,725 214 6,939Other comprehensive income – (1,392) (1,966) – (3,358) (193) (3,551)
Total comprehensive income – (1,392) (1,966) 6,725 3,367 21 3,388
Equitysettledshare-basedpayments – 9 – – 9 – 9Transfer to revenue reserves upon de-recognitionofequity investments – (34) – 34 – – –Netcapitalcontributionfrom non-controlling interests of subsidiaries – – – – – 161 161Secondinterimdividendspaidfor2015 – – – (4,092) (4,092) – (4,092)Dividends paid to non-controlling interests – – – – – (517) (517)
At 30 June 2016 29,441 (2,535) 356 279,750 307,012 9,117 316,129
27The Wharf (Holdings) Limited Interim Report 2017
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSForTheSixMonthsEnded30June2017—Unaudited
Six months ended 30 June
2017 2016HK$ Million HK$ Million
Operating cash inflow 8,828 8,549Changesinworkingcapital/others (1,691) 5,238Taxpaid (1,404) (1,497)
Net cash generated from operating activities 5,733 12,290
Investing activitiesAdditionstoinvestmentpropertiesandproperty, plantandequipment (3,338) (9,645)Other cash generated from investing activities 5,556 1,821
Netcashgeneratedfrom/(usedin)investingactivities 2,218 (7,824)
Financial activitiesDividendspaidtoequityshareholders (4,762) (4,092)Other cash used in financing activities (10,780) (4,897)
Netcashusedinfinancingactivities (15,542) (8,989)
Decrease in cash and cash equivalents (7,591) (4,523)
Cashandcashequivalentsat1January 32,530 23,409
Effectofexchangeratechanges 613 (450)
Cash and cash equivalents at 30 June(Note) 25,552 18,436
Note:
Cash and cash equivalents
2017 2016HK$ Million HK$ Million
Bankdepositsandcashintheconsolidatedstatementoffinancialposition 29,781 18,536Less:Bankdepositswithmaturitygreaterthanthreemonths (4,229) (100)
Cashandcashequivalentsintheconsolidatedstatementofcashflows 25,552 18,436
28 The Wharf (Holdings) Limited Interim Report 2017
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
1. Principal Accounting Policies and Basis of Preparation
ThisunauditedinterimfinancialinformationhasbeenpreparedinaccordancewithHongKongAccountingStandard(“HKAS”)34“InterimFinancialReporting”(“HKAS34”)issuedbytheHongKongInstituteofCertifiedPublicAccountants(“HKICPA”)andtheapplicabledisclosureprovisionsoftheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited.
ThepreparationoftheunauditedinterimfinancialinformationinconformitywithHKAS34requiresmanagementtomakejudgments,estimatesandassumptionsthataffecttheapplicationofaccountingpoliciesandreportedamountsofassets,liabilities,incomeandexpensesonayeartodatebasis.Actualresultsmaydifferfromtheseestimates.
The accounting policies and methods of computation used in the preparation of the unaudited interim financial information are consistent with those used in the annual financialstatementsfortheyearended31December2016exceptforthechangesmentionedbelow.
TheHKICPAhasissuedcertainamendmentstoHongKongFinancialReportingStandards(“HKFRSs”)whicharefirsteffectiveforthecurrentaccountingperiodoftheGroup.TheamendmentsdonothavesignificantimpactontheGroup’sresultsandfinancialpositionforthecurrentorpriorperiodshavebeenpreparedorpresented.
The unaudited interim financial information contains condensed consolidated financial statementsandselectedexplanatorynotes.Thenotesincludeanexplanationofeventsandtransactions that are significant to an understanding of the changes in financial position andperformanceoftheGroupsincetheannualfinancialstatementsfortheyearended31December2016.TheunauditedinterimfinancialinformationandnotesthereondonotincludealloftheinformationrequiredforafullsetoffinancialstatementspreparedinaccordancewithHKFRSs.
Thefinancialinformationrelatingtothefinancialyearended31December2016thatisincluded in the unaudited interim financial information as comparative information does notconstitutetheCompany’sstatutoryannualfinancialstatementsforthatfinancialyearbutisderivedfromthosefinancialstatements.Furtherinformationrelatingtothesestatutoryfinancialstatementsdisclosedinaccordancewithsection436oftheHongKongCompaniesOrdinanceisasfollows:
TheCompanyhasdeliveredthefinancialstatementsfortheyearended31December2016totheRegistrarofCompaniesinaccordancewithsection662(3)of,andPart3ofSchedule6to,theCompaniesOrdinance.TheCompany’sauditorhasreportedonthosefinancialstatements.Theauditor’sreportwasunqualified;didnotincludeareferencetoanymatterstowhichtheauditordrewattentionbywayofemphasiswithoutqualifyingitsreport;anddidnotcontainastatementundersection406(2),407(2)or(3)oftheCompanies Ordinance.
29The Wharf (Holdings) Limited Interim Report 2017
2. Segment Information
TheGroupmanagesitsdiversifiedbusinessesaccordingtothenatureofservicesandproductsprovided.Managementhasdeterminedfivereportableoperatingsegmentsformeasuringperformanceandallocatingresources.Thesegmentsareinvestmentproperty(“IP”),developmentproperty(“DP”),hotels,logisticsandcommunicationsandmediaandentertainment(“CME”).Nooperatingsegmentshavebeenaggregatedtoformthereportablesegments.
Investmentpropertysegmentprimarilyincludespropertyleasingoperations.Currently,theGroup’spropertiesportfolio,whichmainlyconsistsofretail,officeandservicedapartmentsisprimarilylocatedinHongKongandMainlandChina.
Developmentpropertysegmentencompassesactivitiesrelatingtotheacquisition,development,design,construction,salesandmarketingoftheGroup’stradingpropertiesprimarilyinHongKongandMainlandChina.
HotelssegmentincludeshoteloperationsintheAsiaPacificregion.Currently,theGroupoperates14hotelsintheAsiaPacificregion,sixofwhichownedbytheGroup.
LogisticssegmentmainlyincludesthecontainerterminaloperationsinHongKongandMainlandChinaundertakenbyModernTerminalsLimited(“ModernTerminals”),HongKongAirCargoTerminalsLimited(“Hactl”)andotherpublictransportoperations.
CMEsegmentcomprisespaytelevision,internetandmultimediaandotherbusinessesoperatedbyi-CABLECommunicationsLimited(“i-CABLE”).ThetelecommunicationbusinessesoperatedbyWharfT&TLimited(“WharfT&T”)hasbeenterminatedafterdisposaloftheentireequityinterestsinWharfT&TinNovember2016.
Managementevaluatesperformanceprimarilybasedonoperatingprofitaswellastheequityshareofresultsofassociatesandjointventuresofeachsegment.Inter-segmentpricingisgenerallydeterminedonanarm’slengthbasis.
Segmentbusinessassetsprincipallycomprisealltangibleassets,intangibleassetsandcurrentassetsdirectlyattributabletoeachsegmentwiththeexceptionofbankdepositsandcash,certainfinancialinvestments,deferredtaxassetsandotherderivativefinancialassets.
Revenueandexpensesareallocatedwithreferencetosalesgeneratedbythosesegmentsandexpensesincurredbythosesegmentsorwhicharisefromthedepreciationofassetsattributabletothosesegments.
30 The Wharf (Holdings) Limited Interim Report 2017
a. Analysis of segment revenue and results
RevenueOperating
profit
Investment properties fair value
Other net income/(charge)
Finance costs Associates
Joint ventures
Profit before
taxationFor the six months ended HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
30June2017Investmentproperty 7,927 6,674 1,529 10 (609) – – 7,604 HongKong 6,681 5,942 724 – (531) – – 6,135 Mainland China 1,246 732 805 10 (78) – – 1,469Developmentproperty 5,964 1,730 – 506 (6) 219 980 3,429 HongKong 9 7 – – – 4 848 859 Mainland China 5,955 1,723 – 506 (6) 215 132 2,570Hotels 774 155 – – (1) – – 154Logistics 1,424 358 – 112 (103) 142 6 515 Terminals 1,361 349 – 133 (103) 90 6 475 Others 63 9 – (21) – 52 – 40CME(i-CABLE) 641 (222) – 83 (5) – – (144)Inter-segment revenue (116) – – – – – – –
Segment total 16,614 8,695 1,529 711 (724) 361 986 11,558Investment and others 449 248 – (352) 135 – – 31Corporateexpenses – (390) – – – – – (390)
Group total 17,063 8,553 1,529 359 (589) 361 986 11,199
30June2016Investmentproperty 7,644 6,377 495 (68) (603) – – 6,201 HongKong 6,447 5,688 132 – (603) – – 5,217 Mainland China 1,197 689 363 (68) – – – 984Developmentproperty 8,409 1,311 – (496) (38) 390 479 1,646 HongKong – (1) – – – 2 279 280 Mainland China 8,409 1,312 – (496) (38) 388 200 1,366Hotels 740 104 – – (1) – – 103Logistics 1,286 293 – (70) (60) 123 6 292 Terminals 1,234 290 – (49) (60) 95 6 282 Others 52 3 – (21) – 28 – 10CME 1,715 78 – – (16) – – 62 i-CABLE 710 (133) – – (2) – – (135) Telecommunications 1,005 214 – – (14) – – 200 Others – (3) – – – – – (3)Inter-segment revenue (155) – – – – – – –
Segment total 19,639 8,163 495 (634) (718) 513 485 8,304Investment and others 382 208 – 32 396 – – 636Corporateexpenses – (296) – – – – – (296)
Group total 20,021 8,075 495 (602) (322) 513 485 8,644
31The Wharf (Holdings) Limited Interim Report 2017
b. Analysis of inter-segment revenue
2017 2016
Total Revenue
Inter-segment revenue
Group Revenue
Total Revenue
Inter-segment revenue
Group Revenue
Six months ended 30 June HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
Investmentproperty 7,927 (90) 7,837 7,644 (84) 7,560Developmentproperty 5,964 – 5,964 8,409 – 8,409Hotels 774 – 774 740 – 740Logistics 1,424 – 1,424 1,286 – 1,286CME 641 (1) 640 1,715 (37) 1,678Investment and others 449 (25) 424 382 (34) 348
17,179 (116) 17,063 20,176 (155) 20,021
c. Geographical information
Revenue Operating profit
2017 2016 2017 2016Six months ended 30 June HK$ Million HK$ Million HK$ Million HK$ Million
HongKong 9,274 9,841 6,200 6,250Mainland China 7,756 10,144 2,320 1,788Singapore 33 36 33 37
Group total 17,063 20,021 8,553 8,075
32 The Wharf (Holdings) Limited Interim Report 2017
3. Operating Profit
Operating profit is arrived at:
Six months ended 30 June2017 2016
HK$ Million HK$ Million
After charging/(crediting):Depreciation and amortisation on— assets held for use under operating leases 69 75—property,plantandequipment 368 571— leasehold land 30 30—programminglibrary 54 52
Total depreciation and amortisation 521 728
Staffcost(Notei) 1,702 1,716Cost of trading properties for recognised sales 4,020 6,924Gross rental revenue from investment properties(Noteii) (7,927) (7,644)Directoperatingexpensesofinvestmentproperties 1,194 1,206Interest income (237) (173)Dividend income from investments (48) (69)Loss/(gain)ondisposalofproperty, plantandequipment 19 (20)
Notes:
(i) Staff costs included contributions to defined contribution pension schemes of HK$142 million (2016: HK$149 million) and equity-settled share-based payment expenses of HK$20 million (2016: HK$9 million).
(ii) Rental income included contingent rentals of HK$607 million (2016: HK$582 million).
4. Other Net Income/(Charge)
OthernetincomefortheperiodamountedtoHK$359million(2016:netchargeofHK$602million)mainlycomprises:
a. NetforeignexchangelossofHK$377million(2016:HK$84million)whichincludedtheimpactofforeignexchangecontracts.
b. Write-backofimpairmentprovisionofHK$279million(2016:provisionchargeofHK$496million)oncertaindevelopmentprojectsintheMainland.
c. NetgainofHK$422millionondisposalofanassociateandsubsidiaries.
33The Wharf (Holdings) Limited Interim Report 2017
5. Finance Costs
Six months ended 30 June2017 2016
HK$ Million HK$ Million
Interestchargedon:Bankloansandoverdrafts 446 402Otherborrowings 307 499
Total interest charge 753 901Other finance costs 55 87Less:Amountcapitalised (169) (314)
639 674Fairvalue(gain)/loss:Crosscurrencyinterestrateswaps (305) (381)Interest rate swaps 255 29
(50) (352)
Total 589 322
a. TheGroup’saverageeffectiveborrowingratefortheperiodwas3.3%p.a.(2016:2.9%p.a.).
b. Theaboveinterestchargehastakenintoaccounttheinterestpaid/receiptsinrespectofinterestrateswapsandcrosscurrencyinterestrateswaps.
34 The Wharf (Holdings) Limited Interim Report 2017
6. Income Tax
Taxationchargedtotheconsolidatedincomestatementrepresents:
Six months ended June2017 2016
HK$ Million HK$ Million
Current income taxHongKong— provision for the period 954 864—overprovisioninrespectofprioryears (17) (6)OutsideHongKong— provision for the period 504 448—overprovisioninrespectofprioryears (11) (4)
1,430 1,302
Land appreciation tax (“LAT”) in China 511 188
Deferred taxChange in fair value of investment properties 353 (12)Originationandreversaloftemporarydifferences 140 227
493 215
Total 2,434 1,705
a. TheprovisionforHongKongprofitstaxisbasedontheprofitfortheperiodasadjustedfortaxpurposesattherateof16.5%(2016:16.5%).
b. IncometaxonprofitsassessableoutsideHongKongismainlyChinacorporateincometaxcalculatedatarateof25%(2016:25%)andChinawithholdingtaxatarateofupto10%.
c. UndertheProvisionalRegulationsonLAT,allgainsarisingfromtransferofrealestatepropertyinMainlandChinaaresubjecttoLATatprogressiveratesrangingfrom30%to60%ontheappreciationoflandvalue,beingtheproceedsofsalesofpropertieslessdeductibleexpendituresincludingcostoflanduserights,borrowingscostsandallpropertydevelopmentexpenditures.
d. Taxattributabletoassociatesandjointventuresforthesixmonthsended30June2017ofHK$447million(2016:HK$460million)isincludedintheshareofresultsofassociatesandjointventures.
35The Wharf (Holdings) Limited Interim Report 2017
7. Earnings per Share
ThecalculationofbasicanddilutedearningspershareisbasedontheprofitattributabletoordinaryequityshareholdersfortheperiodofHK$8,441million(2016:HK$6,725million)andtheweightedaverageof3,033millionordinarysharesinissueduringtheperiod(2016:3,031millionordinaryshares).
8. Dividends Attributable to Equity Shareholders
Six months ended 30 June2017 2017 2016 2016
HK$ per share HK$ Million HK$ per share HK$ Million
Declared after the end of thereportingperiod:First interim dividend 0.64 1,942 0.58 1,758Distributioninspecieinthe formofsharesini-CABLE 0.09 262 – –
0.73 2,204 0.58 1,758
Theinterimdividenddeclaredaftertheendofthereportingperiodhasnotbeenrecognisedasaliabilityattheendofthereportingperiod.
a. Thefirstinterimdividendbasedon3,035millionissuedordinaryshares(2016:3,031million shares) declared after the end of the reporting period.
b. Thedistributioninspeciecomprisestheentireshareholdingof1,485.3millioni-CABLEsharescurrentlyheldbytheCompanywithanattributablebookvalueofHK$262million.Onbasisoftheexisting3,035,127,327sharesinissueoftheCompanyasatthedateofthisannouncement,Shareholderswillreceiveabout48i-CABLESharesforevery100WharfsharesheldandtheactualdistributionratiowillbedeterminedonbasisofthenumberofsharesinissueoftheCompanyasontherecorddateofthis entitlement.
c. ThesecondinterimdividendofHK$4,762millionfor2016wasapprovedandpaidin2017.
36 The Wharf (Holdings) Limited Interim Report 2017
9. Trade and Other Receivables
Includedinthisitemaretradereceivables(netofallowanceforbadanddoubtfuldebts)withanageinganalysisbasedontheinvoicedateasat30June2017asfollows:
30 June 31December2017 2016
HK$ Million HK$ Million
Tradereceivables0–30days 362 41131–60days 72 7061–90days 34 31Over90days 156 143
624 655
Otherreceivablesandprepayments 3,750 3,626
4,374 4,281
TheGrouphasestablishedcreditpoliciesforeachofitscorebusinesses.Thegeneralcredittermsallowedrangefrom0to60days,exceptforsaleofpropertiestheproceedsfromwhicharereceivablepursuanttothetermsoftheagreements.Allthereceivablesareexpectedtobevirtuallyrecoverablewithinoneyear.
10. Trade and Other Payables
Includedinthisitemaretradepayableswithanageinganalysisbasedontheinvoicedateasat30June2017asfollows:
30 June 31December2017 2016
HK$ Million HK$ Million
Tradepayables0–30days 308 34931–60days 193 26161–90days 37 39Over90days 44 188
582 837Rental and customer deposits 4,309 4,129Constructioncostspayable 5,565 8,112Amount due to associates 2,298 3,390Amountduetojointventures 2,067 1,875Otherpayables 4,701 5,902
19,522 24,245
37The Wharf (Holdings) Limited Interim Report 2017
11. Bank Loans and Other Borrowings
30 June 31December2017 2016
HK$ Million HK$ Million
Bonds and notes (unsecured) 26,059 32,597Bankloans(secured) 7,288 6,693Bankloans(unsecured) 17,860 21,504
Total bank loans and other borrowings 51,207 60,794
Analysis of maturities of the above borrowings:Current borrowingsDuewithin1year 9,866 15,178
Non-current borrowingsDueaftermorethan1yearbutnotexceeding5years 35,917 39,807Dueaftermorethan5years 5,424 5,809
41,341 45,616
Total bank loans and other borrowings 51,207 60,794
12. Share Capital
30 June2017
No. of sharesMillion
31December2016
No. of sharesMillion
30 June2017
HK$ Million
31December2016
HK$ Million
Issuedandfullypaidordinary sharesAt1January 3,032 3,031 29,497 29,441Shares issued under the share option scheme 2 1 92 56
At30June/31December 3,034 3,032 29,589 29,497
38 The Wharf (Holdings) Limited Interim Report 2017
13. Fair Values Measurement of Financial Instruments
a. Assets and liabilities carried at fair value
ThefollowingtablepresentsthefairvalueoftheGroup’sfinancialinstrumentsmeasuredattheendofthereportingperiodonarecurringbasis,categorisedintothethree-levelfairvaluehierarchyasdefinedinHKFRS13,Fairvaluemeasurement(“HKFRS13”).Thelevelintowhichafairvaluemeasurementisclassifiedisdeterminedwithreferencetotheobservabilityandsignificanceoftheinputsusedinthevaluationtechnique.Thelevelsaredefinedasfollows:
• Level1valuations:Fairvaluemeasuredusingonlylevel1inputsi.e.unadjustedquotedpricesinactivemarketsforidenticalassetsorliabilitiesatthemeasurement date.
• Level2valuations:Fairvaluemeasuredusinglevel2inputsi.e.observableinputswhichfailtomeetlevel1,andnotusingsignificantunobservableinputs.Unobservableinputsareinputsforwhichmarketdataarenotavailable.
• Level3valuations:Fairvaluemeasuredusingsignificantunobservableinputs.
39The Wharf (Holdings) Limited Interim Report 2017
Financial instruments carried at fair value
The fair value measurement information for financial instruments in accordance with HKFRS13isgivenbelow.
At 30 June 2017 At31December2016Level 1 Level 2 Total Level1 Level2 Total
HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
AssetsEquityinvestments:—Listedinvestments 7,860 – 7,860 5,697 – 5,697—Unlistedinvestments – 26 26 – 26 26
Derivativefinancialinstruments:—Forwardforeignexchange contracts – 48 48 – 154 154— Interest rate swaps – 225 225 – 273 273—Crosscurrencyinterestrate swaps – 117 117 – 152 152
7,860 416 8,276 5,697 605 6,302
LiabilitiesDerivativefinancialinstruments:—Forwardforeignexchange contracts – 70 70 – 504 504— Interest rate swaps – 314 314 – 241 241—Crosscurrencyinterestrate swaps – 997 997 – 1,479 1,479
Bankloansandotherborrowings:— Bonds and notes – 12,144 12,144 – 11,978 11,978
– 13,525 13,525 – 14,202 14,202
Duringthesixmonthsended30June2017,therewerenotransfersofinstrumentsbetweenLevel1andLevel2,ortransfersintooroutofLevel3.
TheGroup’spolicyistorecognisetransfersintoandoutoffairvaluehierarchylevelsasattheendofthereportingperiodinwhichtheyoccur.
40 The Wharf (Holdings) Limited Interim Report 2017
Valuation techniques and inputs used in Level 2 fair value measurements
ThefairvalueofforwardexchangecontractsinLevel2isdeterminedbyusingtheforwardexchangeratesattheendofthereportingperiodandcomparingthemtothe contractual rates.
ThefairvalueofinterestrateswapsandcrosscurrencyswapsinLevel2isdeterminedbasedontheamountthattheGroupwouldreceiveorpaytoterminatetheswapsattheendofthereportingperiodtakingintoaccountcurrentinterestratesandcurrentcreditworthiness of the swap counter-parties.
ThefairvaluesofbankloansandotherborrowingsinLevel2isdeterminedbasedoncashflowsdiscountedusingtheGroup’scurrentincrementalborrowingratesforsimilartypesofborrowingswithmaturitiesconsistentwiththoseremainingforthedebtbeingvalued.
b. Assets and liabilities carried at other than fair value
ThecarryingamountsoftheGroup’sfinancialassetsandliabilitiescarriedatcostoramortisedcostarenotmateriallydifferentfromtheirfairvaluesasat30June2017and31December2016.
14. Material Related Party Transaction
TheGroupandtheCompanyhavenotbeenapartytoanymaterialrelatedtransactionduringtheperiodended30June2017exceptfortherentalincometotallingHK$570million(2016:HK$579million)fromvarioustenantswhicharewhollyorpartlyownedbycompanieswhichinturnarewholly-ownedbythefamilyinterestsofclosefamilymembersof,orbyatrustthesettlorofwhichisaclosefamilymemberof,thechairmanoftheCompany’sultimateholdingcompany.Suchtransactionsareconsideredtoberelatedpartytransactions,ofwhichHK$43million(2016:HK$390million)alsoconstituteconnectedtransactionsasdefinedundertheListingRules.
41The Wharf (Holdings) Limited Interim Report 2017
15. Contingent Liabilities
Asat30June2017,therewerecontingentliabilitiesinrespectofguaranteesgivenbytheCompanyonbehalfofsubsidiariesrelatingtooverdrafts,shorttermloansandcreditfacilities,bondsandnotesofuptoHK$59,653million(31/12/2016:HK$64,438million).TherewerealsocontingentliabilitiesinrespectofguaranteesgivenbytheCompanyonbehalfofjointventuresandassociatesofHK$2,715million(31/12/2016:HK$4,233million)ofwhichHK$1,191millionhadbeendrawn(31/12/2016:HK$3,095million).
Asat30June2017,therewereguaranteesofHK$8,067million(31/12/2016:HK$8,811million)providedbytheGrouptothebanksinfavouroftheircustomersinrespectofthemortgageloansprovidedbythebankstothosecustomersforthepurchaseoftheGroup’sdevelopmentproperties.TherewerealsomortgageloanguaranteesofHK$3,557million(31/12/2016:HK$3,202million)providedbyjointventuresandassociatesoftheGrouptothebanksinfavouroftheircustomers.
TheGroupandtheCompanyhavenotrecognisedanydeferredincomeoftheaboveguaranteesforsubsidiaries,jointventuresandassociatesastheirfairvaluecannotbereliablymeasuredandtheirtransactionpricewasHK$Nil.
Asattheendofthereportingperiod,theDirectorsdonotconsideritisprobablethataclaimwillbemadeagainsttheGroupandtheCompanyunderanyoftheguarantees.
42 The Wharf (Holdings) Limited Interim Report 2017
16. Commitments
TheGroup’soutstandingcommitmentsasat30June2017aredetailedasbelow:
a. Planned expenditure
30 June 2017 31December2016Committed Uncommitted Total Committed Uncommitted TotalHK$ Million HK$ Million HK$ Million HK$ Million HK$ Million HK$ Million
(I) PropertiesInvestment propertiesHongKong 1,793 469 2,262 990 429 1,419Mainland China 3,750 6,156 9,906 4,035 6,301 10,336
5,543 6,625 12,168 5,025 6,730 11,755
Development propertiesHongKong – – – – – –Mainland China 6,603 10,395 16,998 7,959 12,729 20,688
6,603 10,395 16,998 7,959 12,729 20,688
Properties totalHongKong 1,793 469 2,262 990 429 1,419Mainland China 10,353 16,551 26,904 11,994 19,030 31,024
12,146 17,020 29,166 12,984 19,459 32,443
(II) Non-propertiesHotels 899 124 1,023 1,379 412 1,791Modern Terminals 332 57 389 247 126 373i-CABLE – – – 18 211 229
1,231 181 1,412 1,644 749 2,393
Group total 13,377 17,201 30,578 14,628 20,208 34,836
(i) PropertiescommitmentsaremainlyforconstructioncoststobeincurredintheforthcomingyearsincludingHK$0.2billion(2016:HK$1.7billion)attributableland costs.
(ii) TheexpenditureforpropertiesincludedattributableamountsfordevelopmentsundertakenbyjointventuresandassociatesofHK$8,964million(31/12/2016:HK$9,669million)inMainlandChina.
43The Wharf (Holdings) Limited Interim Report 2017
b. TheGroupleasesanumberofpropertiesandtelecommunicationnetworkfacilitiesunderoperatingleases.Theleasestypicallyrunforaninitialperiodoftwotofifteenyears,withanoptiontorenewtheleasewhenalltermsarerenegotiated.Leasepaymentsareusuallyincreasedannuallytoreflectmarketrentals.Noneoftheleasesincludes contingent rentals. Total operating leases commitments are detailed as below:
30 June 31December2017 2016
HK$ Million HK$ Million
Expenditure for operating leasesWithinoneyear 8 7Afteroneyearbutwithinfiveyears 25 24Overfiveyears 4 7
37 38
17. Review of Unaudited Interim Financial Information
Theunauditedinterimfinancialinformationforthesixmonthsended30June2017hasbeenreviewedwithnodisagreementbytheAuditCommitteeoftheCompany.
44 The Wharf (Holdings) Limited Interim Report 2017
CORPORATE GOVERNANCE CODE
Duringthefinancialperiodunderreview,allthecodeprovisionssetoutintheCorporateGovernanceCodeinAppendix14oftheRules(the“ListingRules”)GoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the“StockExchange”)weremetbytheCompany,withtheexceptionofCodeProvisionA.2.1providingfortherolesofthechairmanandchiefexecutivetobeperformedbydifferentindividuals.
ItisdeemedappropriateasitisconsideredtobemoreefficienttohaveonesinglepersontobetheChairmanoftheCompanyaswellastodischargetheexecutivefunctionsofachiefexecutive.TheBoardofDirectorsbelievesthatthebalanceofpowerandauthorityisadequatelyensuredbytheoperationsoftheBoardwhichcomprisesexperiencedandhighcalibreindividuals,withhalfofthembeingIndependentNon-executiveDirectors(“INEDs”).
CODE FOR DIRECTORS’ SECURITIES TRANSACTIONS
AsetoftheCompany’sowncodeofconductwasadoptedbytheCompanyin2014togovernDirectors’securitiestransactions(the“Company’sCode”)withtermsthereofbeingnolessexactingthantherequiredstandardsetoutintheModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuers(the“ModelCode”)inAppendix10oftheListingRules.TheCompanyhasmadespecificenquiryofallDirectorsoftheCompany,andalltheDirectorshavecompliedwiththerequiredstandardsetoutintheCompany’sCodeduringtheperiodunderreview.
45The Wharf (Holdings) Limited Interim Report 2017
DIRECTORS’ INTERESTS IN SECURITIES
(A) Interests in Shares and Debt Securities
At30June2017,DirectorsoftheCompanyhadthefollowingbeneficialinterests,allbeinglongpositions,intheshareand/ordebenturesoftheCompany,WheelockandCompanyLimited(“Wheelock”)(whichistheCompany’sparentcompany)andtwosubsidiariesoftheCompany,namely,i-CABLECommunicationsLimited(“i-CABLE”)andModernTerminalsLimited(“ModernTerminals”),andanotherassociatedcorporationoftheCompany(ofwhichtheCompanyisinterestedinmorethan20%ofitsissuedshares),namely,GreentownChinaHoldingsLimited(“GreentownChina”).Thepercentages(whereapplicable)whichtherelevantsharesrepresentedtothenumberofsharesinissueofthefivecompaniesrespectivelyarealsosetoutbelow:
Quantity held(percentage,
where applicable) Nature of Interest
The CompanyStephenTHNg 9,445(0.0003%) Personal InterestAndrew O C Chow 340,000(0.0112%) Personal InterestKPChan 30,000(0.001%) Personal InterestAlexanderSKAu 100,000(0.0033%) Personal InterestVincentKFang 100,000(0.0033%) Personal InterestEKYeoh 20,000(0.0007%) Personal Interest
WheelockStephenTHNg 176,000(0.0086%) Personal InterestPaulYCTsui 107,000(0.0052%) Personal Interest
i-CABLEStephenTHNg 1,265,005(0.0629%) Personal Interest
Modern TerminalsHansMichaelJebsen 3,787(5.40%) Corporate Interest
Greentown ChinaAndrewOKChow 240,000(0.01%) Personal Interest
Notes:
(1) The interests in shares disclosed above do not include interests in share options of the Company and/or associated corporation(s) held by Directors as at 30 June 2017. Details of such interests in share options are separately set out below under the sub-sections headed “(B) Interests in Share Options of the Company” and “(C) Interests in Share Options of Wheelock”.
(2) The shareholdings classified as “Corporate Interest” in which the Directors concerned were taken to be interested as stated above were interests of corporation at general meetings of which the relevant Director was either entitled to exercise (or taken under Part XV of the Securities and Futures Ordinance (the “SFO”) to be able to exercise) or control the exercise of one-third or more of the voting power in general meetings of such corporation.
46 The Wharf (Holdings) Limited Interim Report 2017
(B) Interests in Share Options of the Company
Setoutbelowareparticularsofinterests(allbeingpersonalinterests)inoptionsheldduringthesixmonthsended30June2017byDirectors(and/ortheirrespectiveassociate(s))oftheCompanytosubscribeforordinarysharesoftheCompanygranted/exercisableundertheshareoptionschemeoftheCompany:
No. of Shares under Option
Name of Director
Total no. as at 30 June 2017 (percentage
based on no. of shares in issue)
Date of grant (Day/Month/Year)
As at 1 January
2017
Exercised during
the period
As at 30 June
2017
Subscription Price
per Share (HK$)
Vesting/Exercise Period (Day/Month/Year)
StephenTHNg 6,000,000(0.20%) 05/06/2013 400,000 – 400,000 70.20 06/06/2013–05/06/2018400,000 – 400,000 06/06/2014–05/06/2018400,000 – 400,000 06/06/2015–05/06/2018400,000 – 400,000 06/06/2016–05/06/2018400,000 – 400,000 06/06/2017–05/06/2018
Sub-total 2,000,000 – 2,000,000
07/07/2016 1,000,000 (1,000,000)(1) – 46.90 08/07/2016–07/07/20211,000,000 – 1,000,000 08/07/2017–07/07/20211,000,000 – 1,000,000 08/07/2018–07/07/20211,000,000 – 1,000,000 08/07/2019–07/07/20211,000,000 – 1,000,000 08/07/2020–07/07/2021
Sub-total 5,000,000 (1,000,000)(1) 4,000,000
AndrewOKChow 4,400,000(0.15%) 05/06/2013 400,000 – 400,000 70.20 06/06/2013–05/06/2018400,000 – 400,000 06/06/2014–05/06/2018400,000 – 400,000 06/06/2015–05/06/2018400,000 – 400,000 06/06/2016–05/06/2018400,000 – 400,000 06/06/2017–05/06/2018
Sub-total 2,000,000 – 2,000,000
07/07/2016 600,000 (600,000)(2) – 46.90 08/07/2016–07/07/2021600,000 – 600,000 08/07/2017–07/07/2021600,000 – 600,000 08/07/2018–07/07/2021600,000 – 600,000 08/07/2019–07/07/2021600,000 – 600,000 08/07/2020–07/07/2021
Sub-total 3,000,000 (600,000)(2) 2,400,000
47The Wharf (Holdings) Limited Interim Report 2017
No. of Shares under Option
Name of Director
Total no. as at 30 June 2017 (percentage
based on no. of shares in issue)
Date of grant (Day/Month/Year)
As at 1 January
2017
Exercised during
the period
As at 30 June
2017
Subscription Price
per Share (HK$)
Vesting/Exercise Period (Day/Month/Year)
DoreenYFLee 4,400,000(0.15%) 05/06/2013 400,000 – 400,000 70.20 06/06/2013–05/06/2018400,000 – 400,000 06/06/2014–05/06/2018400,000 – 400,000 06/06/2015–05/06/2018400,000 – 400,000 06/06/2016–05/06/2018400,000 – 400,000 06/06/2017–05/06/2018
Sub-total 2,000,000 – 2,000,000
07/07/2016 600,000 – 600,000 46.90 08/07/2017–07/07/2021600,000 – 600,000 08/07/2018–07/07/2021600,000 – 600,000 08/07/2019–07/07/2021600,000 – 600,000 08/07/2020–07/07/2021
Sub-total 2,400,000 – 2,400,000
PaulYCTsui 2,200,000(0.07%) 05/06/2013 200,000 – 200,000 70.20 06/06/2013–05/06/2018200,000 – 200,000 06/06/2014–05/06/2018200,000 – 200,000 06/06/2015–05/06/2018200,000 – 200,000 06/06/2016–05/06/2018200,000 – 200,000 06/06/2017–05/06/2018
Sub-total 1,000,000 – 1,000,000
07/07/2016 300,000 – 300,000 46.90 08/07/2017–07/07/2021300,000 – 300,000 08/07/2018–07/07/2021300,000 – 300,000 08/07/2019–07/07/2021300,000 – 300,000 08/07/2020–07/07/2021
Sub-total 1,200,000 – 1,200,000
YTLeng 1,550,000(0.05%) 05/06/2013 150,000 – 150,000 70.20 06/06/2013–05/06/2018150,000 – 150,000 06/06/2014–05/06/2018150,000 – 150,000 06/06/2015–05/06/2018150,000 – 150,000 06/06/2016–05/06/2018150,000 – 150,000 06/06/2017–05/06/2018
Sub-total 750,000 – 750,000
07/07/2016 200,000 – 200,000 46.90 08/07/2017–07/07/2021200,000 – 200,000 08/07/2018–07/07/2021200,000 – 200,000 08/07/2019–07/07/2021200,000 – 200,000 08/07/2020–07/07/2021
Sub-total 800,000 – 800,000
48 The Wharf (Holdings) Limited Interim Report 2017
No. of Shares under Option
Name of Director
Total no. as at 30 June 2017 (percentage
based on no. of shares in issue)
Date of grant (Day/Month/Year)
As at 1 January
2017
Exercised during
the period
As at 30 June
2017
Subscription Price
per Share (HK$)
Vesting/Exercise Period (Day/Month/Year)
KPChan 1,550,000(0.05%) 05/06/2013 150,000 – 150,000 70.20 06/06/2013–05/06/2018150,000 – 150,000 06/06/2014–05/06/2018150,000 – 150,000 06/06/2015–05/06/2018150,000 – 150,000 06/06/2016–05/06/2018150,000 – 150,000 06/06/2017–05/06/2018
Sub-total 750,000 – 750,000
07/07/2016 200,000 (200,000)(3) – 46.90 08/07/2016–07/07/2021200,000 – 200,000 08/07/2017–07/07/2021200,000 – 200,000 08/07/2018–07/07/2021200,000 – 200,000 08/07/2019–07/07/2021200,000 – 200,000 08/07/2020–07/07/2021
Sub-total 1,000,000 (200,000) 800,000
Notes:
(1) The weighted average closing price of the shares of the Company immediately before the dates of exercises of the options by Mr. Stephen T H Ng during the period was HK$67.07 per share.
(2) The weighted average closing price of the shares of the Company immediately before the dates of exercises of the options by Mr. Andrew O K Chow during the period was HK$65.58 per share.
(3) The closing price of the shares of the Company immediately before the date(s) of exercise(s) of the options (all exercised on the same day) by Mr. K P Chan during the period was HK$62.80 per share.
(4) Except as disclosed above, no option of the Company held by Directors (and/or their associate(s)) lapsed or was exercised or cancelled during the financial period, and no option of the Company was granted to any Director and/or their associate(s) during the financial period.
49The Wharf (Holdings) Limited Interim Report 2017
(C) Interests in Share Options of Wheelock
Setoutbelowareparticularsofallinterests(allbeingpersonalinterests)inoptionsheldduringthesixmonthsended30June2017byDirectorsoftheCompanytosubscribeforordinarysharesofWheelockgranted/exercisableundertheshareoptionschemeofWheelock:
No. of Wheelock’s Shares under Option
Name of Director
Total no. as at 30 June 2017 (percentage
based on no. of shares in issue)
Date of grant (Day/Month/Year)
As at 1 January
2017
Exercised during
the periodAs at
30 June 2017
Subscription price
per Share (HK$)
Vesting/ Exercise period
(Day/Month/Year)
PaulYCTsui 1,200,000(0.06%) 14/06/2013 1,500,000 (1,500,000) – 39.98 15/06/2017–14/06/2018
07/07/2016 1,200,000 – 1,200,000 36.60 08/07/2017–07/07/2021(1)
Notes:
(1) The share options of Wheelock granted on 7 July 2016 (exercisable from 8 July 2016 to 7 July 2021) outstanding as at both 1 January 2017 and 30 June 2017 were/will be vested in four tranches within a period of 4 years, with each tranche covering one-fourth of the relevant options, i.e. exercisable to the extent of one-fourth of the relevant total number of Wheelock’s shares, and with the 1st, 2nd, 3rd and 4th tranches becoming exercisable from 8 July in the years 2017, 2018, 2019 and 2020 respectively.
(2) Except as disclosed above, no share option of Wheelock held by Directors of the Company (and/or their respective associate(s)) lapsed or was exercised or cancelled during the financial period and no share option of Wheelock was granted to any Director of the Company and/or their associate(s) during the financial period.
Exceptasdisclosedabove,asrecordedintheregisterkeptbytheCompanyundersection352oftheSFOinrespectofinformationrequiredtobenotifiedtotheCompanyandtheStockExchangebytheDirectorsand/orChiefExecutiveoftheCompanypursuanttotheSFOortotheModelCode(oranyotherapplicablecode)forSecuritiesTransactionsbyDirectorsofListedIssuers,therewerenointerests,whetherlongandshortpositions,heldordeemedtobeinterestedasat30June2017byanyofDirectorsorChiefExecutiveoftheCompanyinshares,underlyingsharesordebenturesoftheCompanyanditsassociatedcorporations(withinthemeaningofPartXVoftheSFO),norhadtherebeenanyrightstosubscribeforanyshares,underlyingsharesordebenturesoftheCompanyanditsassociatedcorporationsheldordeemedtobeinterestedbyanyofthemasat30June2017.
50 The Wharf (Holdings) Limited Interim Report 2017
SUBSTANTIAL SHAREHOLDERS’ INTERESTS
Givenbelowarethenamesofallparties,otherthanperson(s)whois/areDirector(s),who/whichwere,directlyorindirectly,interestedin5%ormoreofanyclassofvotingsharesoftheCompanyasat30June2017,therespectiverelevantnumbersofsharesinwhichtheywere,and/orweredeemedtobe,interestedasatthatdateasrecordedintheregisterkeptbytheCompanyundersection336oftheSFO(the“Register”):
Names
No. of Ordinary Shares (percentage based on total number of
shares in issue)
(i) WheelockandCompanyLimited 1,850,408,608(60.99%)
(ii) HSBCTrustee(C.I.)Limited 1,850,408,608(60.99%)
Notes:
(1) For the avoidance of doubt and double counting, it should be noted that the shareholdings stated against parties (i) and (ii) represented the same block of shares.
(2) Wheelock’s deemed shareholding interests stated above included interests held through its wholly-owned subsidiaries, namely, Lynchpin Limited (“LL”), WF Investment Partners Limited (“WIPL”) and Wheelock Investments Limited (“WIL”), with 252,579,072 shares (8.33%) being the deemed interests held by LL, 1,360,559,536 shares (44.84%) being the deemed interests held by WIPL, 237,270,000 (7.82%) being the deemed interests held by High Fame Investments Limited and 1,850,408,608 (60.99%) being the deemed interests held by WIL.
Alltheinterestsstatedaboverepresentedlongpositions.Asat30June2017,therewerenoshort position interests recorded in the Register.
51The Wharf (Holdings) Limited Interim Report 2017
SHARE OPTION SCHEME
DetailsoftheCompany’sshareoptionsgrantedtoDirectorsandtherelevantmovement(s)duringthefinancialperiodaresetoutinthesub-sectionheaded“(B)InterestsinShareOptionsoftheCompany”.
SetoutbelowareparticularsduringthefinancialperiodofalloftheCompany’soutstandingshareoptionswhichweregrantedtocertainemployees(sixofthembeingDirectors),allworkingunderemploymentcontractsthatareregardedas“continuouscontracts”forthepurposesoftheEmploymentOrdinanceandareparticipantswithoptionsnotexceedingtherespectiveindividuallimits:
No. of shares under option
Price per shares to be paid
on exercise of options
(HK$)
Date of grant (Day/Month/Year)
As at 1 January
2017
Exercised during the
period
As at 30 June
2017Vesting/Exercise Period
(Day/Month/Year)
05/06/2013 2,100,000 – 2,100,000 06/06/2013–05/06/2018 70.202,100,000 – 2,100,000 06/06/2014–05/06/20182,100,000 – 2,100,000 06/06/2015–05/06/20182,100,000 – 2,100,000 06/06/2016–05/06/20182,100,000 – 2,100,000 06/06/2017–05/06/2018
10,500,000 – 10,500,000
07/07/2016 1,800,000 (1,800,000) – 08/07/2016–07/07/2021 46.902,900,000 – 2,900,000 08/07/2017–07/07/20212,900,000 – 2,900,000 08/07/2018–07/07/20212,900,000 – 2,900,000 08/07/2019–07/07/20212,900,000 – 2,900,000 08/07/2020–07/07/2021
13,400,000 (1,800,000) 11,600,000
Total: 23,900,000 (1,800,000) 22,100,000
Notes:
(1) Except as disclosed above, no share option of the Company lapsed or was granted, exercised or cancelled during the financial period.
(2) The weighted average closing price of the shares of the Company immediately before the date(s) of exercise(s) of the share option during the financial period was HK$66.10 per share.
52 The Wharf (Holdings) Limited Interim Report 2017
CHANGES IN INFORMATION OF DIRECTORS
Givenbelowisthelatestinformationregardingannualemoluments,exclusiveofanyandallamountswhichwouldbebornebyWheelockand/oritswholly-ownedsubsidiary(ies)andcalculatedonanannualisedbasis,ofallthoseDirectorsforwhomtherehavebeenchangesofamounts of emoluments during the course of their respective terms of office since the publicationofthelastannualreportoftheCompany:
Director(s) #Salary and various allowances
##Discretionary annual bonus in cash
HK$’000 HK$’000
StephenTHNg 8,065 (2016: 7,827) 84,100* (2016:11,500)
AndrewOKChow 5,668 (2016: 5,664) 8,000 (2016: 8,000)
DoreenYFLee 6,149 (2016: 5,966) 8,000 (2016: 7,500)
PaulYCTsui 4,203 (2016: 4,075) 5,200 (2016: 5,200)
YTLeng 4,012 (2016: 3,885) 6,000 (2016: 4,000)
KPChan 3,490 (2016: 3,390) 4,000 (2016: 4,000)
# Not including the Chairman’s fee HK$250,000 per annum (2016: HK$225,000) and the Director’s fee HK$200,000 per annum (2016: HK$150,000) payable by the Company to the Chairman and all other Directors of the Company.
## Paid during the six-month period ended 30 June 2017, with the amounts of such discretionary annual bonuses fixed/decided unilaterally by the employers.
### Fee payable to each member of the Company’s Audit Committee was increased to HK$100,000 per annum (2016: HK$75,000).
#### Fee payable to each member of the Company’s Remuneration Committee was increased to HK$50,000 per annum (2016: nil).
* Included a discretionary one-off Special Entrepreneurial Merit Award of HK$72.6 million for Mr. Stephen T H Ng’s contribution to building up and managing Wharf T&T since it was established in 1995 and the realization of substantial investment value from the disposal of Whart T&T in 2016.
53The Wharf (Holdings) Limited Interim Report 2017
PURCHASE, SALE OR REDEMPTION OF SECURITIES
NeithertheCompanynoranyofitssubsidiarieshaspurchased,soldorredeemedanyofitslistedsecurities during the financial period under review.
RELEVANT DATES FOR INTERIM DIVIDENDS
Interim Dividend in CashEx-entitlementdate 24August2017(Thu)Latesttimetolodgesharetransfer 4:30p.m.,25August2017(Fri)Record date/time 6:00p.m.,25August2017(Fri)PaymentDate 12September2017(Tue)
Conditional Special Interim Dividend — Distribution in Specie of i-CABLE SharesEx-entitlementdate 24August2017(Thu)Latesttimetolodgesharetransfer 4:30p.m.,25August2017(Fri)Record date/time 6:00p.m.,25August2017(Fri)Despatchofsharecertificatesofi-CABLEShares 7September2017(Thu)
Inordertoqualifyfortheabovementionedinterimdividendincashandconditionalspecialinterimdividend,alltransfers,accompaniedbytherelevantsharecertificates,mustbelodgedwiththeCompany’sRegistrars,TricorTengisLimited,atLevel22,HopewellCentre,183Queen’sRoadEast,HongKong,notlaterthan4:30p.m.onFriday,25August2017.
ByOrderoftheBoardKevin C. Y. HuiCompany Secretary
HongKong,9August2017
54 The Wharf (Holdings) Limited Interim Report 2017
As at the date of this interim report, the Board of Directors of the Company comprises Mr. Stephen T. H. Ng, Mr. Andrew O. K. Chow, Ms. Doreen Y. F. Lee, Mr. Paul Y. C. Tsui, Ms. Y. T. Leng and Mr. K. P. Chan, together with seven INEDs, namely, Mr. Alexander S. K. Au, Professor Edward K. Y. Chen, Mr. Vincent K. Fang, Mr. Hans Michael Jebsen, Ms. Elizabeth Law, Mr. David Muir Turnbull and Professor E. K. Yeoh.
Notwithstanding any choice of language or means for the receipt of corporate communications (viz. annual report, interim report, etc.) previously made by Shareholder(s) and communicated to the Company, Shareholder(s) is/are given the option (which may be exercised at any time by giving reasonable prior notice to the Company) of changing his/her/their choice of printed language version(s) to English only, Chinese only or both English and Chinese for receiving future corporate communications, or changing the choice of receiving future corporate communications to using electronic means instead of in printed version (or vice versa). Such notice of change of choice should contain the full name(s) in English, address and contact telephone number of the relevant Shareholder(s), together with the relevant words regarding the request for the change of choice, and should be sent to the Company, c/o the Company’s Registrars, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by post or by hand delivery, or via email to [email protected].
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