Underlying Profit Movement in HK$M Underlying Profit 4,500 +278 -246 4,000 3,901 -24 -52 3,857 Underlying profit Increase in losses 3,500 in the first half of 2023 from property trading Increase in profit Increase in losses from divestment from hotels 3,000 Decrease in profit from Underlying profit in property investment the first half of 2024 2,500 1st half 2023 1st half 2024 Our reported profit attributable to shareholders in the Recurring underlying profit from property investment first half of 2024 was HK$1,796 million, compared to a decreased in the first half of 2024. This principally profit of HK$2,223 million in the first half of 2023. reflected lower office rental income from Hong Kong There was a fair value loss on investment properties (partly due to the loss of revenue arising from the (after deducting non-controlling interests) in the first half disposal of nine floors of One Island East in December of 2024 of HK$879 million, compared with a fair value 2023). In Hong Kong, the performance of retail portfolio loss of HK$1,635 million in the first half of 2023, was soft. Trade mix improvement, marketing campaigns principally arising from the Hong Kong office portfolios and loyalty programme initiatives were continuously and for both periods. actively carried out to attract local customers and tourists, to offset the negative impact of outbound travel Underlying profit attributable to shareholders (which and the changing tourist spending behaviour. Despite a principally adjusts for changes in fair value of investment weak office market (reflecting subdued demand and new properties) decreased by HK$44 million from HK$3,901 supply), the office portfolio in Hong Kong was resilient. million in the first half of 2023 to HK$3,857 million in the In the Chinese Mainland, retail sales dropped in the first first half of 2024. The decrease principally reflected half of 2024 (compared with a strong rebound in the first higher net finance charges (due to higher borrowings) half of 2023 following the lifting of COVID-19 related and a reduction in the office rental income, partly offset restrictions) and foot traffic was steady notwithstanding by the increase in profit from the sale of car parking the increase in outbound travel. spaces in Hong Kong. The small underlying loss from property trading in the Recurring underlying profit (which excludes the profit first half of 2024 was primarily a result of sales and from divestment) was HK$3,570 million in the first half marketing expenses incurred for several residential of 2024, compared with HK$3,892 million in the first half trading projects. of 2023. The speed of recovery of hotel businesses in Hong Kong was slower than anticipated, while the performance of the hotels in the Chinese Mainland was relatively stable. Performance of the hotels in the U.S.A. was mixed. 19