Henderson profit down 37% to HK$1.32bln

Failed sales of 20 Hong Kong units pressure company to intensify sales in the second half.

Henderson Land Development Co., the Hong Kong builder controlled by billionaire Lee Shau-kee, reported a larger-than-estimated decline in first-half underlying profit after taking a HK$734 million ($94 million) charge for the failed sales of 20 luxury apartments.

Profit excluding revaluation gains declined 37 percent to HK$1.32 billion from HK$2.11 billion a year earlier, the company said in a stock exchange statement. Analysts surveyed by Bloomberg News predicted a profit of HK$1.52 billion, according to the median of five estimates.

Henderson said in June that HK$2.67 billion worth of sales at its 39 Conduit Road project fell through, including one apartment that the company reported having sold earlier for a world-record price. The collapse sparked a probe by authorities and prompted the government to tighten rules on disclosure of transactions as it tries to cool home prices that have risen about 45 percent since the start of 2009.

The results “should conclude a difficult period for Henderson,” Karl Choi, a Hong Kong-based analyst at Merrill Lynch & Co., wrote in a report on Friday. “We see signs that Henderson is trying to ramp up sales activities in the second half.”

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