FORWARD TOGETHER 38 Financial Review New Economy Development segment results increased by 45.6% from US$235.3 million in FY2021 to US$342.7 million in FY2022. This is due to significant contributions from fair value gains on projects under development, share of development profits of joint ventures and associates and substantial completions (US$5.5 billion). This was further enhanced by gains on disposal of subsidiaries and assets from balance sheet to ESR managed funds in Australia and China. ASSETS AND LIABILITIES The Group had a robust and well-capitalised balance sheet with US$1.8 billion in cash and bank balances. As of 31 December 2022, the Group had cash and bank balances that were primarily denominated in USD, HKD, SGD, RMB, JPY, AUD and KRW. Total assets increased from US$9.3 billion as of 31 December 2021 to US$16.2 billion as of 31 December 2022, driven mainly by the acquisition of ARA in January 2022. Investment properties decreased by 10.3% to US$3.3 billion as of 31 December 2022 (31 December 2021: US$3.7 billion), contributed by the disposal of the Group’s China properties, in line with the asset light strategy. The decrease was offset by development of the Group’s China and Japan assets such as ESR Shanghai Qingpu Yurun Phase II; as well as asset appreciation across the Group’s portfolio. Investment in joint ventures and associates increased by 122.1% to US$3.0 billion as of 31 December 2022 (31 December 2021: US$1.3 billion). The increase was mainly contributed by the Group’s acquisition of the investments in joint ventures and associates held by ARA, as well as additional investments in China joint ventures, such as GIC JV and Victory Lane JV, during the year. In addition, the Group also recorded a higher share of results from its China joint ventures and associates in 2022. Increase in goodwill from US$0.5 billion as of 31 December 2021 to US$3.5 billion as of 31 December 2022 was mainly attributed to the goodwill arising from the acquisition of ARA. Financial assets at fair value through other comprehensive income (“FVOCI”) increased by 25.3% to US$1.0 billion as of 31 December 2022 (31 December 2021: US$0.8 billion). The increase was mainly from ARA’s investments, offset by the disposal of shares in China Logistics Property Holdings Co., Ltd. in May 2022. Total bank and other borrowings as of 31 December 2022 were US$5.5 billion compared to US$4.2 billion as of 31 December 2021. With cash and bank balance of US$1.8 billion, the net debt to total assets as at 31 December 2022 were 22.8% (31 December 2021: 27.9%). TOTAL EQUITY Total equity increased from US$4.4 billion as of 31 December 2021 to US$9.1 billion as of 31 December 2022. This was primarily due to the increase in share premium by US$4.3 billion from the issuance of new shares for ARA acquisition, consolidation of perpetual securities issued by ARA, and net profits for the year ended 31 December 2022 of US$631.1 million. The above increases are partially offset by unrealised currency translation losses of US$311.0 million mainly from the Group’s operations in Japan, China and Australia during the year due to the strengthening of US dollars against the respective local currencies; as well as unrealised fair value losses arising from financial assets through other comprehensive income (“FVOCI”) of US$186.0 million, redemption of perpetual securities of US$218.8 million and dividend distribution to shareholders of US$70.8 million.
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