Property to ports conglomerate The Wharf (Holdings) (0004) saw its net profit leap by over a half to a record HK$47 billion thanks to increased revenues and higher fair values for its investment properties.
For the year to 31 December 2012, net profit attributable to shareholders jumped 55 percent year on year to HK$47.3 billion, according to a stock exchange announcement.
Revenue increased 28.4 percent in 2012 to HK$30.9 billion which the company attributed to better sales from property in Hong Kong and mainland China as well as increased rental income from its investment properties.
However the biggest factor in bumping up the profit was the increase in fair value of the company’s investment properties.
For 2012, the fair value of the investment properties leaped 39 percent to HK$34.8 billion.
If the fair value is stripped out, then the company’s core profit would be HK$11 billion, representing an increase of 37 percent year on year.
Profits were also bolstered by other net income of HK$2.5 billion, which consisted mainly of a book accounting gain representing negative goodwill of HK$2.23 billion arising from Wharf’s acquisition of a 24.6 percent interest in mainland developer Greentown China Holdings.
For its logistics business, the company said logistics revenue at its ports subsidiary Modern Terminals dropped by 13 percent to HK$3 billion due to lower throughput handled as a result of slowing global trade.
The company’s investment properties include well-known landmarks such as Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay.
It is also increasing its presence in mainland China with additional development of investment projects for rental income as well as residential projects for sale.
In particular it is busy developing five “International Finance Squares” at Chengdu, Wuxi, Chongqing, Suzhou and Changsha.
Back in Hong Kong, the company said its redevelopment plans for Kowloon Godown in Kowloon Bay and Wharf T&T Square in Kwun Tong have been approved but lease modification for Kowloon Godown was still in progress.
It added that the Town Planning Board last month approved the master layout plan for the Yau Tong Bay shipyard redevelopment project, in which Wharf has about 15 percent interest.
The company did not give details for its planned four-storey extension to its Ocean Terminal building at Harbour City for which the company managed to secure a new lease for 21 years from the government last year.