Welcome to CK Asset Holdings Limited 2023 Annual Results Presentation. My name is Gerald. As usual, I will be going through our presentation quickly followed by a Q&A session with our management team. So our annual results highlights revenue reached $71 billion in 2023, profit attributable to shareholders, $17.34 billion in per share terms, of $4.86 compared to $5.41 from last year, a reduction of 10.2%.
We declared a final dividend of $1.62, making full year dividend $2.05. So in terms of dividend per share, it's a reduction of 10.1% compared to last year. Net book value per share, up 3.2% to $108.72. Going to principal activity analysis. 70% of our profit contribution is now recurring in nature versus 81% of our revenue being recurring in nature. 45% of our contribution from Hong Kong 11% from Mainland and 44% from overseas, quite a diversified mix.
So turning to divisional performance. Property sales. So a reduction or drop in divisional activity has led to a lower contribution in 2023. Revenue was $13.1 million profit contribution $4.5 million and a drop of 57%. Margin was a healthy 34%. Major contribution from the Laguna Verona, Dongguan, $1.2 billion, [indiscernible] Shanghai, $748 million and [indiscernible] $635 million and 21 Borrett Road $548 million.
So despite the tough conditions, virtually all of our markets experienced very healthy margins, 35.7% in Hong Kong, 33.8% from the Mainland and 22% from overseas. We still have $19.4 billion of contracted sales not yet recognized, about $7 billion would be scheduled for recognition in 2024. In terms of contracted sales in calendar year 2023, it totaled about $18.2 billion, which was up from financial year or calendar year 2022, which was $12.2 billion.
Turning to property rental. $5.9 billion of revenue, $4.6 billion of profit contribution, roughly the same as 2022. Margin was a very healthy 78.4%. And major contribution from CKC1 $1.1 billion; social health care, rental properties, $751 million to [indiscernible] Garden, $668 million; and Hutchison Logistics Centre, $625 million. A bit of an analysis for you. You can see a slight -- there's a slight shift in revenue mix.
Out of the $5.9 billion, $1.2 billion is from others is mainly our an increase from our social and health care rental properties giving us a more diversified mix of contribution. Although if you look at the geographical spread, the bulk of our contribution $3.7 billion out of the $4.6 billion was from Hong Kong. It's now a total of 22 million square feet of investment properties that we manage and own. And we had a fair value increase in value of $3.2 billion, mostly coming from the almost completing CKC 2 office property as well as Hutchison Logistics Centre.
Hotels and service suites operation margins have recovered back to pre-COVID level, almost 35% and a big jump in profit contribution to $1.5 billion which is still shy of pre-COVID, but this is a very encouraging development indeed. The bulk of our contribution to no surprise from Hong Kong, $1.65 billion. And average hotel occupancy in 2023 was 79% and average service suites occupancy was 90%.
We now have 267 million square feet under our management in the Property and Project Management division and are providing us a very steady $359 million of contribution and almost 40% margin. Turning to our Pub Operation. Again, 3 divisions: managed pubs. We call it Pub Company, Pub Partners, which is tenanted pubs and our own Brewing & brands division.
If you look at the $997 million contribution, it is a 19% increase from 2022 but if you exclude fixed asset impairment and the disposal gain from 2022, just look at profit contribution in its plainest form, then it's actually a slight reduction compared to 2022 because of the well talked-about and well-covered cost pressure that we experienced last year. Infrastructure and utility asset operation. So these are the joint ventures we have. We added one in this category, the U.K. Rail or rolling stock after the equity capitalization exercise that we did last year.
So now it is classified as part of our joint venture portfolio and a very healthy margin, indeed, 33% overall. It's, very resilient. And also a very steady and resilient contribution, $7.77 billion in 2023, up 4% from 2022. So I'll turn it to pages to our -- my colleague, Mr. Simon Man. Simon?
Thank you, Gerald. Cost interest in listed REITS remain more or less the same at the year-end date. 34% in the Hui Xian REIT which only managed a portfolio of 11.8 million square feet of hotel and services office and retail properties on the Mainland and 26.2% in the Fortune REIT, which only managed a portfolio of 3 million square feet of retail properties in Hong Kong and Singapore.
An 18.2% in the prosperity REIT, which only managed a portfolio of 1.3 million square feet of office, retail and industrial properties in Hong Kong. Hui Xian REIT is an associate and the group share a net profit of $55 million for the year, taking into account is net rental for the year and the exchange loss realized on bank loan repayment during the year. And distribution received from Fortune REIT and Prosperity REIT amounted to $55 million in 2023 and were recognized as investment income.
For the group's gearing and maturity profile at the year-end date, the group spend and other borrowings amounted to HKD 54.9 billion with HKD 17.8 billion repayable within 1 year, $30.4 billion within 2 to 5 years and $6.7 billion beyond 5 years. Taking into account the bank balance and deposits of $42.5 billion at the year-end date, the group carried a net debt of $12.4 billion. That is 3.2% rate -- if we take the net debt to shareholders' fund and 3% if we take the net debt to the net total capital.
And our credit rating from Moody's is A2 (Stable) and from Standard & Poor is A (Stable). At the year-end date, we have a land bank of 132 million square feet. 74 million square feet was under development, of which 7 million was in Hong Kong, 63 million square feet on the Mainland and 4 million square feet overseas. Our 22 million square feet was held for rental income, including 30 million square feet in Hong Kong, 5 million square feet on Mainland and 4 million square feet overseas.
9 million square feet was held for hotel and service operations with 80 million square feet in Hong Kong and 1 million square feet on the mainland. About 27 million square feet was half of Pub operation in the United Kingdom. So it all comes to a total of 130 million square feet at the year-end date. Gerald, I'll pass that back to you to talk about ESG.
Thanks, Simon. So in terms of progress on the ESG front, I'll just highlight a few things from the next 2 pages. In terms of decarbonization progress, we have submitted our SBTs in early part of this year and is in a validation process. We also have obtained in terms of green finance, 2 additional sustainability-linked loans. Turning to the next page. If you look at property development, CKC, which is building we are in now our headquarter. We have received the Platinum rating as an existing building recently.
And on the Pub operation, we have committed to net 0 in 2040 and as well as aiming to procure 80% of renewable energy by 2025 and 100% by 2030. Our Hotel and Serviced Operation division have also been a signatory to the energy saving charter and the 40 charter organized by the environmental bureau of the government. Even our 267 million square feet property manager, our city-based goodwill and Hutchison property management company have all been accredited with the ISO-14001 certification, environmental management system certification.
So these are what we've been doing so far, and there's a lot more to come on this front. I think that is all in terms of presentation. We will I now open the floor for questions. I've already seen many questions from our online audience. I will consolidate some of your questions into one. And hopefully, you don't miss out any after. So we welcome the rest of our management team, our Chairman, Mr. Victor Li, our Deputy MD, Mr. Edmond IP and of course, Simon and myself.
So again, thank you for your questions. The first question is what are your thoughts on your profit or earnings per share dropping 18.7%
If you -- I mean you have to remember, in 2022, we have -- we still have the aircraft leasing business, and we sold it off at the end of 2022. So in 2022, the P&L includes the one-off gain as well as the leasing income from the aircraft leasing business. So if we are comparing apples to apples, the drop in earnings per share from our continuing operation was 10.2%.
But the point number 2 I have is that the whole investment community, I think, had expected a gap in development earnings this year because if we had bought a lot of land during the peak, let's say, 4 and 5 years ago, our gearing would not be at 3%, and we may be holding quite a few projects with book values that are higher than market values. So overall, against the backdrop of high interest rate environment, COVID recovery and all the geopolitical tensions I think this is okay set of results and continues to demonstrate that our -- what I call return-centric in connection and financial conservatism are serving us well.
I would also like to add that our diversified and global approach to seeking out investment opportunities have strengthened the quality. I keep using this at the quality of our balance sheet and the quality of our earnings. And as and when the market recovers, we should be well placed to deliver for our shareholders more sustainable earnings. So thank you. I think this set of results basically reflect the fact that we slowed up on our land purchase a couple of years ago.
Thank you, Chairman. The next question is on the residential market. What is your view on the residential market right now as the government has removed all the property cooling measures. Will you still adopt a more aggressive pricing approach for their upcoming launch of glucose just like you did for the coastline.
This question was asked earlier on the press on quite a number of people asked about this question, but let me repeat the removal of the cooling measure, is providing a good support to the property market, and we welcome that. I don't have a crystal ball on the future. But my view is that most of the negative news such as the interest rate, inflation, geographic tensions and the government. Chinese got like all the punitive stamp duties.
It seems a lot of negative news has already come up already. and the downside pressure seems more limited than the potential upside. This is probably why we're seeing a significant pickup in volume in the market recently. As for the blue coast, normally on pricing, we have to consider a range of factors. Location, transport, unit sizes, product positioning, et cetera, et cetera. What I can add is many of the units -- I don't know how many of you have seen it, but many of the units in the Blue Coast have an ocean view or corner window, which is rather rare in Hong Kong.
The project is right -- located right on top of the MTRC station. It may be the only one that has direct access this way. It's practically minutes from the MOT, but physically living on the subside of Hongkong island. Actually I pass by the project every day when from home to work. I would prefer not to comment on specific price strategy. But just in -- th sales team will discuss with me when it's the time for launch on this lovely well-located sites, will be soon when we launch this project. Thank you.
Thank you, Chairman. The next question on property sales again. Property sales contribution of $4.5 billion was much less than 2022. And with only $7 billion contracted sales scheduled for recognition in 2024, are you still focusing on property development? Is this still a core part of your business going forward?
As I said earlier, the lower amount of contribution is a direct result of our plan. It's our prudent replenishment approach to its peak of market a few years ago. Some people actually say that we time the market or time to cycle correctly. This has allowed CKA to invest capital to enlarge our recurring income base globally without impacting the health of our balance sheet.
Hong Kong is our home, and property development is one of our core businesses. But our focus is to invest to generate reasonable and predictable returns wherever it may be from. In fact, if you look at our 3 whole pubs, that's around if I remember correctly, about 27 million floor area and social housing approximately about 4 million in floor area. Both portfolios are part of our overall property business or land bank, both Pubs and social housing property.
Yes, they are providing us with a diversified earnings stream. But at the core, they are properly business. The strength of CKI is that we have choices. We have choices between Hong Kong and internationally, we have choices so that we can time the cycle. We're very happy to buy more land in Hong Kong, if we can generate reasonable returns.
In fact, to land exchange government or URA tenders, we did add about 8 sites in the last 3 years to our land bank. So we do have a decent pipeline. We just avoided that peak of the market. Thank you.
Next question on property rental contribution. It was more or less flat Revenue from office segment has dropped about 12% against the backdrop of much higher vacancies in Hong Kong offices. What is your outlook for the segments in 2024 and any update on CKC 2 pre-letting.
We're leasing activities for offices or high-end retail is still challenging, and it's not a secret. It will take some time to recover but mass market retail and industrials are doing quite well. The overall occupancy of our Hong Kong investment property portfolio is about 90%. And we'll continue to try our best to do better. We're fortunate that we are able to further diversify and rebalance our rental income stream to mitigate the pressure on particularly office portfolio.
This is through the acquisition of Civitas last year, which is why we're able to protect overall contribution of our rental portfolio. I'm glad to see that our strategy is working as planned. CKC2 will be completing in mid-2024, and pre-letting EBITDA continuing. We hope to see a solid contribution from this iconic building in the future. Thank you.
More on investment profit, your portfolio has grown significantly from $17 million in June of last year to $22 million at the end of 2023. Could you elaborate more on your outlook on your investment property portfolio?
The increase in our investment property portfolio is driven mainly by the completion of our acquisition of Civitas. Was close to, what, 700 social housing properties in the U.K. as well as the completed office and retail commercial properties in Upper West Shanghai. Together with the upcoming completion of CKC 2, they all will be a good addition to our overall our portfolio mix. Thanks.
Turning to the Hotel and Service REITs division will be the hotel occupancy tax have much of an impact on your division.
Not really. I mean, you have to understand our portfolio. If you lease out the rooms for extended stays, I believe the rules as 28 days. And you have to fulfill certain operational conditions. Then such tax, you don't have to pay that tax. So a good part of our portfolio is of that type of hotel. So we should be fine. But if on daily travelers, the industry improves, a bit of increase in tax is not a big problem. Thank you.
What is your outlook on the overall Hotel and Service suites segment?
Well, it's improving. And in 2023, our Hotel first suites contribute about $1.5 billion of profit. And 2024 start up quite okay, quite well. I believe the occupancy of this division is about 90%.
Your pub operation recorded a 19% increase in EBIT. But if you add back the asset impairment, it was lower than 2022. Could you elaborate on that? And what's your outlook?
Can I recommend Gerald that you answered that, but because I'm running short of time, can we do other questions for us and we come back after a [indiscernible] to do the CKHH analyst meeting that you can continue this
Right. Infrastructure and utility division seems to be performing very steadily. Do you have any plans to divest minority interest or even majority interest in these businesses like you did with [indiscernible] water in 2022.
I have to give you my -- the same answer year-to-year. We never really have a plan to spend -- to sell any of our core business as they have good cash-generating assets. However, if a good offer comes in, it's our duty to evaluate it if it's good for us to capitalize on the opportunity and take some money off the table. I'm sorry, I cannot give you a very straightforward answer, sorry. Can we move on?
Your gearing is very low, 3%. And can you share with us your capital deployment plan?
We're happy with the strong balance sheet. And the quality of our business is good. So we can continue to be prudent. We have a choice, I keep using this one. We have the choice to be selective in what, when and where we want to invest going forward. It's almost our motto that we're patient, and there's no deal that we must win. The focus is really on profit margin and cost of entry. And we're going to be careful when the cost of capital is higher than before.
We'll get our Chairman to answer 2 more questions, which is probably the most popular questions that they have been seeing. Why have you reduced your dividend per share by 10% despite having such a strong balance sheet?
Now we have debated the Board and ourselves have debated along on this topic. But we believe there's actually more than one way to return our value of capital to shareholders. One obviously is a standard dividend policy. The other is actually share buyback. And we have been buying back our shares opportunistically and steadily in the last few years. In 2023, we have spent almost $2 billion buying back over 45 million shares. So I believe that going forward, that would also be part of our strategy.
So leading to that, do you have any plans for share buyback?
I think I've answered that question already.
With that, I think Chairman.
Gerald, I have to go. So can I switch to CKHH meeting and you continue, please.
Thank you, Chairman. So I'll just answer the question on the pub stat. I think that's probably cover most of the questions we have. So this will be the last question we'll take on this session. The question was if you include add-back impairment, adjusted EBIT was actually lower than 2022, our outlook and whether we can elaborate on that. So what we like to say is asset sort of provision is a function of interest rates and long-term growth.
And obviously, U.K. interest rate rates is more than 1%, 1.5% higher than the prior year. so it can go up and down during cycles. So if you really exclude this and focus on operations, we can say that the performance actually was about the same, largely about the same as 2022. We were able to increase prices multiple times to mitigate much of the increase in wages and cost of goods sold and supply chain cost increase and also utility costs, but not all of it, but most of it.
So we did as much as we could. Our volume is still below pre-COVID and conditions are still pretty tough for challenging. But the team is focused, very much focused to do what we can going forward to improve margins and overall profitability while offering a great customer experience. So we are hopeful that better days are ahead.
So I think this -- with this, we will conclude our Q&A session for our analysts. And thank you for joining us, and we'll see you again soon. Thank you.
