Lippo rides out rough year

Despite revenue from the SAR representing Lippo Limited’s second highest source of external revenue after Singapore as well as its second highest revenue segment the group posted a loss of HK$343.97 million for the 2015 fiscal year, ending March 31, according to a filing on the Hong Kong Stock Exchange.
This comes as a turnaround from the previous year’s recorded HK$1.023 billion in profit and on the back of higher gross profit (HK$1.652 billion) and revenue (HK$3.857 billion) recorded as compared to the previous year. The total comprehensive loss for the year ending March 31 amounted to HK$556.2 million.
The group’s two largest revenue streams for the 2015 fiscal year came from its ‘Sales of goods’ division – amounting to HK$1.641 billion, a contraction from its HK$1.755 billion seen the previous year, and its ‘Sales of properties’ division, which expanded due to its sale of the ‘M Residences’ properties in Macau. This sale propped up the local segment to become the second highest performer during the year, raking in HK$1.214 billion in revenue, as compared to the HK$27.88 million seen the previous year.
This topped only Singapore, which brought in HK$1.64 billion, a slight drop from the previous year’s HK$1.68 billion.
Total revenue for the year was ‘mainly attributable to revenue from the property sale of the development project in Macau completed during the year,’ notes the report – detailing a residential property in which the group held 100 per cent interest in – a 311 residential unit, 26,025 square metre development at 83 Estrada de Cacilhas presided over by sole sales agent Jones Lang LaSalle, Business Daily reported. The majority of properties were sold on a pre-sale basis, with only five remaining residential units and ‘some car parks’ remaining unsold, notes the report.
Volatile market
The group notes that ‘the global economy deteriorated in the year 2015, amid financial market volatility around the world, falling commodity prices, weak demand and gloomy economic outlook for mainland China,’ as well as noting the ‘instability in global stock markets’.
Despite noting ‘a 6.9 per cent growth in gross domestic product’ recorded for 2015 – the ‘lowest in the last 25 years’ – the group states that Mainland China continues to be the leading economic performer in the region, despite its National Bureau of Statistics, reporting ‘disappointing investment and export figures’.
However, the group said its financial position ‘remained strong’, with ‘steady performance’.
The group’s banking business noted ‘steady performance during the year,’ disposing of a 49 per cent interest in the Macau Chinese Bank Limited – a bank licensed in Macau – in July for MOP441 million, then in October a further disposal of a 31 per cent stake for MOP279 million, leaving the group with a 20 per cent stake in the bank.
Within the group’s stock operations the report notes a ‘turbulent and volatile’ stock market in Hong Kong and the Mainland, making the ‘local operating environment of corporate finance and securities broking business challenging,’ noting that the local stock market will be dependent upon Chinese and global economics development.