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Press Releases
27 Jun 2003
HKRI recorded losses for the first time

 Financial Highlights:
 Turnover: HK$2,158.7 million; operating profit: HK$168 million; write-down: HK$762.2 million
 Losses attributable to shareholders: HK$700.6 million; Losses per share: 61 cents
 
HKR International Limited (The Group) announced today that profits from operation for the year ended 31 March 2003 were HK$168 million but with the write-down in the Tung Chung project Coastal Skyline and the revaluation of investment properties, the result was an overall loss of HK$700.6 million for the Group.
 
Turnover for the year was HK$2,158.7 million, compared with HK$2,100 million in the previous year.
 
In view of the difficult business environment and to prepare for the challenges ahead, the Board of Directors has recommended that no dividend be distributed.
 
It is the first time that the Group has recorded losses since its listing in the Hong Kong Stock Exchange.  In addition to the weak economy and the poor property market environment, the Group has considered the SARS outbreak while reviewing its financial position.  Since the full aftermath of SARS needs to be monitored in the longer-term, it is decided to adopt a conservative approach in writing down the value of its properties in preparation for the worst scenario.
 
The Group also took advantage of the low interest environment during the year to renegotiate some of the existing bank loans and secure new financings at lower interest rates to finance existing and new projects.
 
The Group considers that as a long-term strategy, diversification into Mainland China would have as much emphasis as having Hong Kong as its base.  It is envisaged that the fast economic growth on the mainland will benefit the private property market there and the Jingan redevelopment project in Shanghai is expected to generate revenues for the Group in the medium term.
 
Although the business environment in Hong Kong has been increasingly competitive, there are silver linings too.  The affordability of housing is at a two-decade high and mortgage rate at a historical low.  Since late last year, the Government has also announced a number of property related measures including the moratorium on Government land sales.
 
It is noted that in spite of the price war in new property sales, the Group was able to sell 258 Siena Two units for an average price well over HK$3,000 per square foot by the end of March 2003.  The steady sales of Siena Two units to locals and expatriates have underlined the unparalleled appeal of Discovery Bay to the cosmopolitan workforce.  By the end of March 2003, a total of 550 Siena One and Two units were sold.
During the year, Discovery Bay was awarded the Gold Green Property Management Award (Private Housing) in the 2002 Hong Kong Eco-Business Awards.
 
When Phase 1 of Coastal Skyline was launched for sale in December 2002, it immediately became the focus of the property market and more than 480 units were sold within a month.  But the sales slowed down as concern over the Iraq war grew.  However, its average price of more than HK$2,450 per square foot still outperformed the prevailing market levels in the surroundings.
 
With respect to other projects in Mainland China, the Group's luxury serviced apartment in Shanghai – Chelsea – was more than 92 per cent leased.  Situated at the prime location of Huashan Road, it provides 118 fully furnished residential units.
 
In April 2003, the Group ceased to run and manage its estate management services on the mainland by selling its 80 per cent interest in Asia Asset to an independent third party.
 
In May 2003, it also sold its entire interest in the Zhabei redevelopment project in Shanghai for a profit.
Elsewhere in Asia, the Group's hospitality business has completed a number of strategic changes to give its properties a stronger market positioning.  Its hotel in Singapore was rebranded The Sentosa Resort and Spa – A Beaufort Hotel to position it as one of Asia's leading resort hotels.  Spa Botanica was also launched, not only as the first destination spa in Singapore but also a new concept “garden spa”.
 
On healthcare, the Group's wholly-owned healthcare services subsidiary, GenRx Holdings Limited, established a joint program with the Chinese University to set up the Qualigenics Centre for Diabetes and Endocrine Disorders in November 2002.  AmMed Cancer Centre, in which GenRx has a substantial interest, has become fully operational.
 
It was a good year for Imperial Bathroom Products Ltd amid higher awareness of the brand in the building industry, both locally and internationally.
 
Meanwhile, the Group is actively drawing up a marketing plan for the sales of a number of new units in Siena.  Coastal Skyline would also be marketed in the second half of 2003.  The sales are expected to bring stable revenue to the Group.
 
HKR International Ltd is listed on The Hong Kong Stock Exchange (Code: 480) and is a constituent of the 200-stock Hang Seng Composite Index Series.  The Group has interests in property development and management, luxury hotels, property related manufacturing and other investments.

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