Lower property sales hit bottom line
Interim profit at property-to-ports conglomerate The Wharf (Holdings) (004) has plunged by over a quarter due to lower property sales and lower revaluations of its investment properties.
The company, which is controlled by tycoon Peter Woo Kwong-ching, reported a profit attributable to shareholders for the six months to 30 June 2013 of HK$17.2 billion, representing a drop of 27 percent year-on-year.
It said if the property revaluation of HK$11.3 billion was excluded but the other accounting gains and losses were retained, then the net profit decreased by nine percent year-on-year to HK$6.45 billion.
Revenue dropped 18.5 percent to HK$14.9 billion while underlying profit edged up five percent to HK$5.68 billion.
The company said while revenues dropped due to lower recognition of property sales both in Hong Kong and the mainland, this was partly offset by its investment property business where revenues rose 10 percent to HK$5.3 billion.
Indeed collecting the rent accounted for 35 percent of the total revenues booked for the reporting period.
Its investment property portfolio includes well known buildings such as Times Square in Causeway Bay and Harbour City in Tsimshatsui.
At a press briefing Tuesday, the company’s management said in the next few years, capital and development outgoings would top HK$86.9 billion to pay for land premiums and construction costs.
Current projects include the redevelopment of Kowloon Godown at Kowloon Bay into a residential and commercial development with a gross floor area of 829,000 square feet.
“The premium offer for lease modification is expected to be available by the third quarter of 2013,” the company said.
Nearby the redevelopment of Wharf T&T Square into a high rise grade A commercial building with a GFA of 596,200 square feet is set to start with general building plans under preparation.
At Yau Tong, the redevelopment of Yau Tong Godown into a residential and commercial development is in progress with foundation works underway.
The renovation of Ocean Terminal to be designed by well-known British architect firm Foster + Partners is pending building approval from the government.
Last year Wharf secured a new government lease of 21 years for its landmark facility next to Harbour City.
Included in the lease was permission to add a four-storey extension to the existing shopping mall to provide additional space for commercial use and government facilities.
The company however has yet to submit a town planning application for it.