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eCOmethanolplantinInnerMongolia
HendersonLandDevelopmentCompanyLimitedAnnualReport201282
Henderson Investment Limited (“HIL”)(67.94%-owned by the Company)Stock code: 97 website: www.hilhk.com
HIL’s turnover for theyear ended31December2012amountedto HK$63 million, representing a decrease of HK$236 millionor79%fromthatofHK$299millionforthecorrespondingyearended31December2011.Thedecreaseinturnoverwasduetothefactthat,commencingfrom20March2012,paymentoftollfeesinrespectofHangzhouQianjiangThirdBridgetoajointventurecompany of HIL was provisionally suspended. Consequentialuponthefailureoftherelevantauthoritytoputforwardanyformalproposal or compensation offer regarding the toll fee collectionright, for the sake of prudence, the toll fee income during theperiodfrom20March2012to31December2012intheamountofHK$254million(afterdeductionofPRCbusinesstax)hasnotbeenrecognisedintheconsolidatedaccountsofHIL.Nevertheless,takingintoaccountthosetollrevenueswhichwereaccruedbutnotrecognised,thetotaltollrevenuefortheyearended31December2012generatedbyHangzhouQianjiangThirdBridgeamountedtoHK$317million,representingagrowthofHK$18millionor6%whencomparedwiththatofHK$299millionforthecorrespondingyearended31December2011.
Duetotheaforementionednon-recognitionofthetollfeeincomefrom20March2012onwards,HIL’sprofitattributabletoequityshareholdersfortheyearended31December2012decreasedbyHK$83millionor77%toHK$25millionascomparedwiththatofHK$108millionforthecorrespondingyearended31December2011. TheaboveissueoftollfeecollectionrightissubjecttoarbitrationbyChinaInternationaleconomicandTradeArbitrationCommission(“CIeTAC”). CIeTAC on 12 November 2012 confirmed itsacceptance to administer the above arbitration case. CIeTAC’sdecisionforthecompositionofanarbitraltribunal,aswellasitsnotificationofcommencementofproceedings,arebothpending.
HIL may report a loss from operations in the current financialperiodunlessthearbitrationproceedingsresultinadeterminationor theparties come toanagreement ineachcase satisfactory toHILorsuitableinvestmentthatmaybeidentifiedbyHILproducessatisfactoryincome.
Subsidiary&AssociatedCompaniesReviewofOperations
Fanling
GuangdongLNG Terminal
SheungShui
Ma On Shan
Sha Tin
Sai Kung
Tsuen Wan
Chuen Lung
Ta Pang Po
Tai Ho
Tung Chung
Chek Lap Kok
Tai Lam Kok
Tuen Mun
Yuen LongTin Shui Wai
Au Tau
Tseung Kwan O
Chai WanWong Nai Chung
Tsing Yi
Hong KongInternationalTheme Park
Kwun Tong
Stanley
HONG KONG ISLAND
KOWLOON
NEW TERRITORIES
LANTAU ISLAND
SHENZHEN
TAI PO PLANT
MTK PLANT
Planned high pressure or intermediate pressure town gas pipelines
High pressure or intermediate pressure gas pipelines under construction
Completed high pressure town gas pipelines
Completed intermediatepressure town gas pipelines
Completed natural gas submarine pipeline from Guangdong LNG Terminal to Tai Po plant
Existing areas of supply
Planned new areas of supply
HendersonLandDevelopmentCompanyLimitedAnnualReport2012 83
ReviewofOperations–Subsidiary&AssociatedCompanies
* all percentage shareholdings shown above were figures as of 31 December 2012
Hong Kong and China Gas’ network in Hong Kong
Background and Lines of Business
(I) Gas Business in Hong Kong FoundedintheUnitedKingdomin1862andlistedinHong
Kongsince1960,TheHongKongandChinaGasCompanyLimited(“HongKongandChinaGas”)wasHongKong’sfirst public utility and today remains its sole supplier ofpipedtowngas.
The Hong Kong and China Gas Company Limited(39.88%-owned by the Company)*Stock code: 3 Website: www.towngas.com
Towngas China Company Limited(66.18%-owned by The Hong Kong and China Gas Company Limited)*Stock code: 1083 Website: www.towngaschina.com
HongKongandChinaGas’spipedcity-gas,referredtoas“towngas”,isproducedattwoproductionplantslocatedatTaiPoandMaTauKokinHongKong.97%ofitssuppliescome from theTai Po Plant,with theMaTauKokPlantmakinguptherest.Withsome3,500kmofpipelineandatotalof1.77millioncustomers,HongKongandChinaGascurrently provides services to over 86% ofHongKong’shomes.Itsgasinfrastructurehasgrownandimprovedoverthe years, such that the customers today enjoy a supplycontinuityrateofover99.99%,oneofthebestintheworld.
Beijing
Heilongjiang
Jilin
Liaoning
Hebei
Shanxi
Inner Mongolia
Shaanxi
SichuanChongqing
Hubei
Hunan
Henan
Jiangxi
Guangdong
Guangxi
Hainan
Zhejiang
Fujian
Jiangsu
Anhui
Shandong Yellow Sea
East China Sea
Hong Kong
Coal mining
Coal-based chemical processing
Compressed natural gas / liquefied natural gas filling stations
Upstream projects
Coal logistic project
Other projects
Oilfield project
Provincial natural gas pipeline network
City high pressure pipeline network (Towngas)
City high pressure pipeline network (Towngas China)
Water projects
Telecommunication projects
Towngas Group Hong Kong headquarters
Towngas piped city-gas projects
Towngas China piped city-gas projects
Liquefied natural gas receiving station
South ChinaSea
ThailandPhetchabun
HendersonLandDevelopmentCompanyLimitedAnnualReport201284
ReviewofOperations–Subsidiary&AssociatedCompanies
Hong Kong and China Gas’ business in mainland China
HendersonLandDevelopmentCompanyLimitedAnnualReport2012 85
ReviewofOperations–Subsidiary&AssociatedCompanies
Since2006,HongKongandChinaGashasusednaturalgasasapartialfeedstocktoproducetowngas.Thesigningofa25-yearagreementwithGuangdongDapengin2004hasensuredastablepriceandreliablesupplyofnaturalgastoHongKongandChinaGas.
(II) Utility Business in Mainland China HongKongandChinaGasfirstbeganitsmainlandbusiness
withajointventureinPanyu,Guangdongprovincein1994,atwhich timeitservedapproximately5,000customers.AsignificantmilestonewasreachedinDecember2006whenitagreedtoacquireanapproximately43.97%equitystakein Towngas China Company Limited (“Towngas China”,formerlyknownasPanvaGasHoldingsLimited),awell-established mainland China piped city-gas operator, inexchangeforinterestsintenofHongKongandChinaGas’spipedcity-gasprojectsinShandongandAnhuiprovinces.
In order to complement downstream piped city-gas jointventure projects, Hong Kong and China Gas has madeinvestments in mid-stream transportation projects thatconnect the upstream supplier and the downstream pipedcity-gasprovider.Ithasalsoparticipatedinsomeupstreamprojects including the exploitation and sale of petroleumand natural gas. In addition, Hong Kong and China Gasowns four public water supply and wastewater treatmentprojectsinthecitiesofWujiang,WuhuandSuzhou.
(III) New Energy Business Throughitswholly-ownedsubsidiary,eCOenvironmental
Investments Limited and that company’s subsidiaries(collectively known as “eCO”), Hong Kong and ChinaGas has diversified into various alternative energy andenvironmentally-friendly businesses including LiquefiedPetroleumGas(“LPG”)vehiclefillingstations,landfillgasutilisation projects and an aviation fuel facility for HongKongInternationalAirport.Todate,eCOisoperatingfiveLPG filling stations in Chai Wan, Mei Foo, Tuen Mun,WestKowloonandWanChai,providing24-hourgasfillingservicesfor18,000LPGtaxisandmostLPGminibusesin
Hong Kong. eCO’s landfill gas project began operationsinMay 2007 and treated landfill gas is transported to itsTaiPoPlant,servingasfueltoproducetowngas.Theuseof landfillgasgreatlyreducestheamountofmethaneandcarbondioxide(bothsignificantsourcesofglobalwarming)released into the atmosphere, whilst the reduced use ofnaphtha, which comes from the cracking of fossil fuel,willalsoenablegreaterconservationofresources.In2002,eCOsigneda40-yearfranchiseagreementwiththeAirportAuthorityHongKonganditsAviationFuelFacility,whichconsists of eight tankswith a gross aviation fuel storagecapacity of 264,000 cubic metres and a jetty with twoberths,commencedoperationin2010.
eCOhasalsoextendeditsbusinesstothemainlandmarketand its businesses range from resource exploitation, coal-based chemicals and liquefaction of coalbedmethane, tocleanfuelsforvehiclesandmarinevessels.
(IV) Diversified Businesses In themid-1990s,HongKongandChinaGasentered the
local property development business inHongKong,withtheaimofrealisingthepotentialofitslandresourcesandmaximising returns to its shareholders by deploying itsexcess cash. In 1995,HongKong andChinaGas took a45% equity interest in the King’s ParkHill developmentproject,whichwascompletedinearly2000withamixtureof luxury houses and apartments. In 1996, it participatedin the development of International Finance Centre, alandmarkprojectintheheartofHongKong,anditcurrentlyholdsa15.8%stakeinthedevelopment.GrandPromenadeandGrandWaterfront,tworesidentialdevelopments,werealso co-developed by Hong Kong and China Gas andHendersonLandDevelopmentCompanyLimited.Ithasa50% interest in theGrandPromenade project at SaiWanHo,whilefortheGrandWaterfrontattheformersouthplantsite atMaTauKok, it is entitled to73%of thenet salesproceedsoftheresidentialportion.Inaddition,HongKongandChinaGashasfull interest in thecommercialportionof the development, comprising 150,000 square feet andapproximately300carparkingspaces.
HendersonLandDevelopmentCompanyLimitedAnnualReport201286
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Results for the Year Ended 31 December 2012
ProfitaftertaxationattributabletoshareholdersofHongKongandChinaGasfortheyear2012amountedtoHK$7,727.9million,anincreaseofHK$1,578.3millioncomparedto2011.Profitgrowthwas mainly due to growth in profit of mainland businesses, arevaluationsurplusfromtheInternationalFinanceCentre(“IFC”)complexandaone-offnetgain.ProfitaftertaxationattributabletoshareholdersofHongKongandChinaGas,excludingrevaluationsurplus from the investment property, amounted toHK$6,333.4million.
Duringtheyearunderreview,HongKongandChinaGasinvestedHK$5,905.5millioninproductionfacilities,pipelines,plantsandotherfixedandintangibleassetsforthesustainabledevelopmentofitsvariousbusinessesinHongKongandmainlandChina.
(I) Gas business in Hong Kong Totalvolumeofgassales inHongKongfor theyear2012
increasedonlyslightlyby0.8%comparedto2011.Appliance
sales for the year 2012 increased by 6.1% compared to2011.Asat theendof2012, thenumberofcustomerswas1,776,360,anincreaseof25,807comparedto2011.
HongKongandChinaGaswillraiseitsstandardgastariffbyHK1centpermegajoulewitheffectfrom1April2013,whichrepresents4.6%ofthestandardgastariff,withacommitmenttonofurtherincreaseforthistariffinthecomingtwoyears.
Layingofa15kmpipelinetobringnaturalgasfromTaiPoto
MaTauKokgasproductionplant,topartiallyreplacenaphthaasfeedstockfortheproductionoftowngas,isnearcompletionwith commissioning expected this year. Construction of a9kmpipeline in thewesternNewTerritories tostrengthensupplycapabilityandreliabilityisalsoinprogress.Intandemwiththegovernment’sdevelopmentofWestKowloon,Southeast Kowloon and a cruise terminal, network planning,design and construction in these locations are underway.ConstructionofanewsubmarinepipelinefromMaTauKoktoNorthPointcommencedin2012.Meanwhile,thegasmainextensiontoLeiYueMunissubstantiallycomplete.
High-pressure submarine pipelines deliver natural gas from Guangdong to the Tai Po Plant
HendersonLandDevelopmentCompanyLimitedAnnualReport2012 87
ReviewofOperations–Subsidiary&AssociatedCompanies
(II) Utility businesses in Mainland China As at the end of December 2012, this group had an
approximately66.18%interestinTowngasChinaCompanyLimited(“TowngasChina”;stockcode:1083). InJanuary2013, Towngas China issued and sold 150 million newordinary shares by placement (the “Placing”) at a price ofHK$6.31 per share. Net proceeds from the Placing afterdeducting related commission and other expenses wereHK$930million.Thisgroup’sinterestinTowngasChinawasslightlydilutedto62.37%afterthePlacing.
Towngas China’s profit after taxation attributable to itsshareholders amounted to HK$841 million in 2012, anincreaseofapproximately19%over2011.
In 2012, Towngas China acquired seven new piped-gasprojects located in Wafangdian, Dalian city and Xinqiudistrict, Fuxin city, Liaoning province; in Binhai ScienceandTechnologyIndustrialPark,ZhaoyuancityandPingyincounty, Jinan city, Shandong province; in Yifeng county,Yichun city, Jiangxi province; in Lingang Industrial Park,Shanhaiguan district, Qinhuangdao city, Hebei province;andinChangtingcounty,Longyancity,thisgroup’sfirstinFujianprovince.TowngasChinaalsoaddedanewmidstreampipeline project in Wafangdian, Dalian city, Liaoningprovincetoitsportfolioin2012.TowngasChinaisfocusedon developing city-gas businesses in cities with a highproportion of industrial gas consumption. Towngas Chinawillcontinuetostriveforrapidexpansionthroughmergersandacquisitions.
With seven new projects successfully established byTowngasChinain2012,thisgrouphad107city-gasprojectsinmainlandcitiesspreadacross20provinces,municipalitiesandautonomousregionsattheendof2012.Thetotalvolumeof gas sales of these projects for 2012was approximately11,900millioncubicmetres,anincreaseof15%over2011,andattheendoftheyearthisgroup’sgascustomersonthemainlandstoodatapproximately14.82million.
This group’s midstream natural gas projects are makinggood progress. These include high-pressure natural gaspipelinejointventuresinAnhuiprovince,inHebeiprovince,inHangzhoucity,Zhejiangprovinceand in Jilinprovince;theGuangdongLiquefiedNaturalGasReceivingTerminalproject; a natural gas valve station project in SuzhouIndustrial Park, Suzhou city, Jiangsu province; and a newpipelineprojectinHenanprovince.
Asat theendof2012, thisgrouphad invested inandwasoperating fourwater projects. These includewater supplyprojects in Wujiang city, Jiangsu province and in Wuhucity,Anhui province; and an integrated water supply andwastewaterjointventureproject,togetherwithanintegratedwastewatertreatmentprojectforaspecialindustry,inSuzhouIndustrial Park, Suzhou city, Jiangsu province. During thefirstquarterof2013, thisgroupsuccessfullyaddedawatersupply project in Zhengpugang Xin Qu, Maanshan city,Anhuiprovincetoitsportfolio,makingatotaloffivewaterprojectsinhand.
Liquefield coalbed methane (LCBM) plant in Shanxi province
HendersonLandDevelopmentCompanyLimitedAnnualReport201288
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ECO LNG filling stations provide cleaner fuel alternative for vehicles
Overall,inclusiveofprojectsofTowngasChina,thisgrouphad150projectsonthemainland,asattheendof2012,twelvemore than at the endof 2011, spread across 22 provinces,municipalities and autonomous regions. These projectsencompass upstream, midstream and downstream naturalgassectors,watersupplyandwastewatertreatmentsectors,natural gas vehicular filling stations, environmentally-friendly energy applications, energy resources, logisticsbusinessesandtelecommunications.
(III) Emerging environmentally-friendly energy businesses
This group’s development of emerging environmentally-friendlyenergyprojects,throughitswholly-ownedsubsidiaryeCO environmental Investments Limited and the latter’ssubsidiaries(togetherknownas“eCO”),isprogressingwell.
eCO’s twomajor businesses inHongKong – an aviationfuel facility, servicing Hong Kong International Airport,and dedicated liquefied petroleum gas (“LPG”) vehicularfillingstations–areoperatingsmoothly.Total turnover forthe aviation fuel facility for 2012was 5.56million tonnesofaviationfuel.TheprofitmarginforeCO’sfillingstationbusinessfor2012waslowerthanin2011duetotheimpactofrisingpetroleumgasprices.
eCO’s vehicular clean energy business on the mainlandmainlyfocusesontheuseofcompressedorliquefiednaturalgastoreplacediesel.Anetworkoffillingstationsestablishedby eCO is gradually taking shape in Shaanxi, Shanxi,Shandong,HenanandLiaoningprovincesmainlyservicingheavy-dutytrucks.Asattheendof2012,ninefillingstationswereinoperationandanotherfiveunderconstruction.
HendersonLandDevelopmentCompanyLimitedAnnualReport2012 89
ReviewofOperations–Subsidiary&AssociatedCompanies
Construction of a logistics port in Jining city, Shandongprovince, to linkanupstreamdedicatedcoal transportationrailwaywithanearbydownstreamcanalconnectingBeijingand Hangzhou, part of eCO’s new “energy Logistics”business sector, is nearly complete.The pilot run for bulkcargo transportation has commenced. The logistics port isexpectedtobefullycommissionedduringthefourthquarterof2013.eCO is alsoplanning toprovide liquefiednaturalgasfilling facilities for incoming and outgoing heavy-dutytrucks and river transport vessels at the pier so they mayprogressivelyreplacetheiruseofdiesel.
eCO’s coalbed methane liquefaction facility located inJincheng city, Shanxi province is operating smoothly;productionincreasedby36%in2012comparedwiththesameperiodfor2011.eCO’smethanolproductionplantinerdoscity,InnerMongolia,whichconvertscoalintomethanolandhasanannualproductioncapacityof200,000tonnes,isnowrunningsmoothlyatthepilotstageofproduction.Tofurtherenhance the economic benefits of this project, eCO plansto also convert themethanol into highvalue-added energyproducts.
eCO’snew-energyresearchanddevelopmentcentreisalsoworkingproactivelyontechnologiestoconvertresourcesoflowvalueintohighvalue-addedenergy.Industrialtestsonamediumscale,focusedonconvertingcoaltaroilofmediumto low temperature into petrol or diesel,were successfullycompletedin2012andplanningisnowinplacetoapplythistechnology to commercial projects in 2013. Furthermore,eCOisalsodevelopingitsinterestsinmethanolprocessingand in conversionprospects for cokeovengas, tar oil andbiomassenergy.
eCO in mid-2012 acquired a 60% effective stake in thedevelopmentofonshoreoilfieldblocksincentralThailand;eCO has already smoothly taken over the operational
managementoftheoilfieldsandorganisedaprofessionalteamto formulate a plan for their comprehensive development.In addition, in Guizhou province, eCO has conducted aninnovativetestwithpromisingresultsonsurfaceextractionof coalbedmethane for coalminesof lowpermeability. InInnerMongolia,eCO’sXiaoyugoucoalmine,withanannualproductioncapacityof1.2milliontonnes,isnowatthepilotstageofproductionandisexpectedtobefullycommissionedduringthefirstquarterof2013whileitsopen-pitKejiancoalminehasbeenoperatingnormallyasplanned.
(IV) Property developments For the commercial area of theGrandWaterfront property
developmentprojectatMaTauKok,aswellasIFCcomplexin which this group has an approximately 15.8% interest,leasingisgood.
Financing programmesThisgroupcontinuedissuingmediumtermnotes,foratotalamountequivalent toHK$4,400million, during the year 2012 under itsmedium term note programme (the “Programme”). Inclusive ofthisgroup’sfirstrenminbi-denominatednotesinHongKongissuedinlateMarch2011foratotalamountofRMB1,000millionoveratermoffiveyears,thisgrouphadissued,asattheendofDecember2012,medium termnotes of an aggregate amount equivalent toHK$10,200millionundertheProgrammewithtenorsrangingfrom5to40years.
HongKongandChinaGaspredictsan increaseofabout25,000new customers in Hong Kong during 2013. Its increase in thestandardgastariffwitheffectfrom1April2013willoffsetsomeof thepressureon itsown risingoperatingcosts.Thecombinedresultsof thisgroup’semergingenvironmentally-friendlyenergyandmainlandutilitybusinesseshavealreadyovertakentheresultsofitsHongKonggasbusinessandareforecasttogrowfasterthanthelatterinthecomingyears.
HendersonLandDevelopmentCompanyLimitedAnnualReport201290
ReviewofOperations–Subsidiary&AssociatedCompanies
Background and Lines of Business
established in 1923, Hong Kong Ferry (Holdings) CompanyLimited(“HongKongFerry”,formerlyknownasTheHongkongand Yaumati Ferry Company Limited prior to a corporaterestructuringin1989)currentlyfocusesonpropertydevelopmentandinvestment;ferry,shipyardandrelatedoperations;andtraveloperations.
(I) Property Development and Investment Thisgroupiswellexperiencedinpropertydevelopmentand
investmentanditscompletedprojectsareasfollows:
MetroHarbourView:Locatedat8FukLeeStreet,TaiKokTsui,theprojectconsistsof10blocksofresidentialbuildingsdivided into 3,520 residential units, plus a two storeycommercialarcadeandabout1,100carparkingspaces.
MetroRegalia:Situatedat51TongMiRoad,Mongkok,theprojecthasatotalgrossfloorareaofapproximately53,000squarefeet.
ShiningHeights:Theproject,situatedat83SycamoreStreet,isa60-storey700feettallbuildingwithagrossfloorareaofapproximately336,000squarefeet.ItisthehighestbuildingintheTaiKokTsuidistrict.
TheSpectacle:Theprojectat8ChoYuenStreet,YauTonghasatotalgrossfloorareaofapproximately160,000squarefeet.
It alsohas investmentpropertiescomprising twohousesatCheung Sha, Lantau Island and a warehouse site inYuenLong.
(II) Ferry, Shipyard and Related Operations Thecompany’spassengerferryoperationsceasedoperations
upontransferofthelocalferrylicencesinJanuary2000,afterservingtheterritoryforover70years.Theferryoperationis
nowconfinedtoadangerousgoodsvehicularferryservice.Italsooperatesaharbourcruiseandrestaurantservice.
The company’s shipyard, built on a site of about 210,000
square feet atNorthTsingYi, provides ship repairing andmaintenance services as well as certain civil engineeringservices. With over 60 years of experience in marineengineering, the shipyard is equippedwith the largest andmostadvancedSyncroliftinHongKong.TheSyncrolifthasacapacityofupto3,400tonnes enablingit to liftvariousvessels ranging from40 feet to 200 feet. equippedwith aflexibleship transfersystem, theShipyardcandrydock tenvesselssimultaneously.
Byconvertingfourvehicularferriesintocruisevesselswith
each vessel accommodating over 300 guests, “HarbourCruise – Bauhinia” has provided cruise services in HongKongwaters since 1998 allowing passengers to enjoy thestrikingviewsofbothsidesofVictoriaHarbour.
(III) Travel Operations established in 1983, HYFCO Travel has a total of nine
agency offices located all over Hong Kong and Macau,providing comprehensive travel services including localtours,China tours, overseas tours, ship and train ticketing,andhotelreservation.
Results for the Year Ended 31 December 2012
Hong Kong Ferry’s turnover for the year ended 31 December2012amountedtoapproximatelyHK$616million,representingaslightdecreaseof3%whencomparedto thepreviousyear.ThiswasmainlyattributedtothedecreaseinthesalesofTheSpectacle.Its consolidated profit after taxation for the year amounted toapproximatelyHK$398million,adecreaseof30%ascomparedwiththeprofitaftertaxationofHK$565millionlastyear.However,if thegainfromthedisposalofSilvermineBeachHotel in2011(amountingtoHK$245million)isexcluded,HongKongFerryhasachievedanincreaseof24%inprofit in2012ascomparedwith
Hong Kong Ferry (Holdings) Company Limited(31.36%-owned by the Company)Stock code: 50 Website: www.hkf.com
HendersonLandDevelopmentCompanyLimitedAnnualReport2012 91
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Green Code, Fanling, Hong Kong (artist’s impression)
thatof2011.Duringtheyearunderreview,itsprofitwasmainlyderivedfromthesaleoftheresidentialunitsofShiningHeights,rentalincomeandthesurplusfromtherevaluationofinvestmentproperties.
HongKongFerry sold 14flats inShiningHeights and1flat inTheSpectaclewhichaccountedforatotalprofitofapproximatelyHK$162millionduringtheyear.RentalandotherincomefromitscommercialarcadesamountedtoHK$54million.ThecommercialarcadesofMetroHarbourViewandShiningHeightswere fullyletwhereastheoccupancyrateofthecommercialportionofTheSpectacleatyearendwasabout60%.
During the year, the superstructure works of its developmentproject,GreenCodeat1MaSikRoad,Fanling,NewTerritories(formerlyknownasFanlingSheungShuiTownLotNo.177)havebeen completed and the pre-sale of the property commenced inmid-March2013.Theresponsefromthebuyerswasgood.Upto21March2013,theaccumulatednumberofresidentialflatssoldamounted to363,orapproximatelyonehalfof the totalunitsofthe project, with the sale proceeds amounting to approximatelyHK$1,607million.
Constructionworks of the site at the junctionofGilliesAvenueSouthandBulkeleyStreet,HungHomInlandLotNo.555,withasiteareaofapproximately6,300squarefeet,isprogressingwell.Foundation works are expected to be completed in the secondquarter of 2013. The residential-cum-commercial tower willprovideatotalgrossfloorareaofapproximately56,000squarefeetand95residentialunits.
Foundationworksofthepropertyat208TungChauStreet(formerlyknownas204-214TungChauStreet)isinprogress.Itisexpectedthat the aforesaidworkswould be completed by second quarterof2013.Theprojectwillbere-developedintoaresidential-cum-commercialbuildingwithatotalgrossfloorareaofapproximately54,000squarefeet.
TheFerry,ShipyardandrelatedoperationsachievedanincreaseinoperatingprofittoHK$28.1million.Thissumrepresentsafive-foldascomparedwiththeprofitofHK$5.5millionlastyear.TheincreasewasmainlyduetoincreasedleasingofitsvehicularferriesasaresultofmoreharbourworksinHongKong.Theturnoveroftheshipyardoperationshasalsoimproved.
With increasing competition during the year under review, theTravelOperationachievedaprofitofHK$0.6million,adecreaseof78%comparedwiththatforlastyear.
Although Hong Kong Ferry recorded an impairment loss ofHK$34.4million due tomarket fluctuation on available-for-salesecurities in the first half of 2012, it derived an appreciation ofapproximatelyHK$116millionintheportfoliofollowingmarketrecovery at the year end date,which had been credited into theSecuritiesRevaluationReserve.
HongKongFerrywillcontinuetoselltheresidentialflatsofthe“GreenCode”,Fanlingproject indifferent lots. If itsoccupationpermitcanbeobtainedbytheendof2013,theprofitsfromthesaleoftheprojectwillbebookedinitsaccountsfortheyear2013.
HendersonLandDevelopmentCompanyLimitedAnnualReport201292
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Italian restaurant, Assaggio Trattoria Italiana, at Mira Mall
Background and Lines of Business
Based inHongKong,MiramarHoteland InvestmentCompany,Limited (“Miramar”) was established in 1957 and has beenlisted on theHongKong Stock exchange since 1970.Miramarhas a diversifiedbusinessportfolio coveringhotels and servicedapartments,propertyrentals,foodandbeverage,travelandapparelbusinessesinHongKong,mainlandChinaandtheUnitedStates.
(I) Hotels and Serviced Apartments Miramar solely owns andmanages TheMira Hong Kong
and Miramar Apartments in Shanghai. It also providesmanagement services for two hotels in Shekou, aswell asfor a serviced apartment complex inHongKong. In total,
Miramarownsand/orprovidesmanagementservicesforfivehotelsandservicedapartmentsinHongKongandmainlandChina.
(II) Property Rental Business OppositeTheMiraHongKongare theMiramarShopping
Centre andMiramarTower,Miramar’spremier investmentpropertieswithatotalgrossrentableareaofoveronemillionsquarefeet.
(III) Food and Beverage Business InHongKong,Miramaroperates two“TsuiHangVillage”
restaurants:onelocatedinTsimShaTsuiandoneinCentral.This group also operates “Yunyan Sichuan Restaurant’,“Cuisine Cuisine”, “Assaggio Trattoria Italiana” and “TheFrench Window”. Following the opening of “Saboten”
Miramar Hotel and Investment Company, Limited(44.21%-owned by the Company)Stock code: 71 Website: www.miramar-group.com
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Japanese Cutlet and “Hide-Chan Ramen”, “Zanzo” (aJapanese-style sake bar) was added to its portfolio in late2012.InmainlandChina,ithasoperated“CuisineCuisine”inBeijingandWuhansince2011.
(IV) Travel Business Miramarexpress,withmorethantwodecadesofexperience,
istheofficialHongKonggeneralagentforCrystalCruises,votedtheWorld’sBestCruisebyCondeNastTraveller.Thiscompanyalsoprovidesbusinessandtouristshuttleservices,airport transfers and even wedding rentals all the way toGuangdong Province. With branches across Hong Kong,KowloonandtheNewTerritoriessinceitsestablishmentin2006,Miramar Travel is a popular and trusted choice forprovidingworldwide tours, booking air tickets and hotels,cruiseholidays,freeandindividualtravelpackages.InMay2009, Miramar Travel was appointed as Virgin Galactic’s“AccreditedSpaceAgent”–thefirstandonlyagentinHongKong allowed to reserve seats aboard Virgin Galactic’ssuborbitalSpaceflights.Thefollowingyear,its“AccreditedSpaceAgent” authority expanded to Singapore, Malaysia,Thailand,Philippines,IndonesiaandTaiwan.
(V) Apparel Business MiramaranditsfranchiseesretailandoperateDKNYJeans
stores in various cities in mainland China. In addition,Miramar has launched the Kickers business (a renownedeuropeanshoebrand)withstoresinShanghai,offeringthelatestlooksinfootweartosophisticatedconsumers.
Results for the Year Ended 31 December 2012
Miramar’s turnover rose by 19% to approximately HK$2,974million for the financial year ended 31 December 2012 whencompared to HK$2,496 million for the corresponding financialyearended31December2011.Profitattributabletoshareholdersincreasedby4%year-on-yeartoapproximatelyHK$1,377million(2011:HK$1,325million).excludingthenet increasein thefairvalueofitsinvestmentproperties,underlyingprofitattributabletoshareholdersgrewby9%toapproximatelyHK$448million(2011:HK$411million).
Miramar continues to strengthen its five lifestyle businesses ofhotelandservicedapartment,propertyrental,foodandbeverage,travelandapparel.
The Hotel and ServicedApartment business benefited from thesurgeinvisitorarrivalstoHongKongin2012.Itsflagshiphotelin Tsim Sha Tsui, The Mira Hong Kong, recorded an averageoccupancyrateof84%in2012,comparedwith83%in2011.Theaverageroomraterosebyapproximately9%.eBITDA(earningsbeforeinterest,taxes,depreciationandamortization)ofTheMiraHongKonggrewby13%toapproximatelyHK$233.6million.Anewdesignerlifestylehotelunderitsmanagement,MiraMoon,isscheduledtoopeninWanChaiduringthesummerof2013.Thishotelwillprovideapproximately90guestrooms.
For the Property Rental business, Miramar owns a prestigiousportfolio of commercial properties inHongKong andmainlandChina.Asattheendof2012,occupancyrateofMiramarShoppingCentrewasapproximately99%andtheaverageunitrateroseby7%year-on-year.MiraMall,theshoppingcentreatTheMiraHongKong,unveileditsnewfaceinagrandopeninginthefourthquarterof2012.Asattheendof2012,occupancyrateofMiraMallwasapproximately 99%. Miramar Tower’s rental income recordedsatisfactorygrowthfollowingitsrenovationin2011andasattheendof2012,occupancyrateofMiramarTowerwasapproximately99%,whiletheaverageunitrateincreasedby4%year-on-year.
Miramar adopts amulti-brand strategy for itsFood&Beveragebusiness.ThewideselectionincludesChineserestaurantsofTsuiHang Village, Yunyan Sichuan Restaurant and Cuisine Cuisine(aMichelin-Star-rated Chinese restaurant), The FrenchWindow(a French brasserie), Assaggio Trattoria Italiana, and JapaneserestaurantsofHide-ChanRamen(aJapaneseRamenrestaurant),Saboten (a traditional Japanese pork cutlet restaurant) and itsnewly-opened Japanese sake bar, Zanzo. Miramar opened twoCuisineCuisinerestaurantsinBeijingandWuhan.
ItsTravelbusinessresumedgrowthmomentumwithanincreaseof6%inturnovertoHK$1,119.8millionin2012.SegmenteBITDAroseby40%toHK$35.5millionin2012.
Miramar diversified into theApparel business in 2011 and setup directly-managedDKNY Jeans retail stores in Shanghai andBeijing.IthasanetworkoffranchisedstoresinmajorcitiesacrossmainlandChinabytheendof2012.