Swire Properties' underlying profit falls 8% to HK$6.3bn

But rental income rose.

According to Barclays, Swire Properties FY13 underlying profit dropped 8% y/y to HK$6,348mn, 12% and 8% higher than our and Bloomberg consensus’ estimates.

Recurrent net rental income rose 7% to HK$7,978mn, 1% above our estimate of HK$7,866mn.

Here’s more from Barclays:

The beat was mainly from faster take-up at Azura and Argenta, as well as the reversal of HK$118mn overprovision of tax expense in the prior years.

After a cut in interim dividend six months ago, final DPS was raised by 2 cents to HK$0.40, taking the full year DPS back to HK$0.60, same as last year. This is 15% higher than our estimate of HK$0.52 and 20% higher than consensus’ estimate of HK$0.50.

Management suggests that dividend uplift was a result of renewed confidence in Hong Kong property market.

On the balance sheet side, BVPS rose 2.4% h/h to HK$34.59.

After some HK$4.7bn capex was incurred in 2H 2013, the net debt increased 10% h/h to HK$32bn. The ratio of net debt to shareholder’s fund rose from 14.7% as of Jun-13 to 15.8% as of Dec-13.