Guoco plunges 30pc
Guoco Land, the property arm of the Guoco Group, said profit attributable to shareholders dropped 30.6 per cent to $33.06 million last year due to a provision of $26.27 million because of the decline in property values.
The provision stemmed from car parking spaces at a residential development, South Horizons, in Aberdeen which were revalued by external professional valuers.
Operating profit after exceptional items dropped 20.33 per cent to $38.95 million although turnover jumped 170 per cent to $117.79 million from a year earlier.
Earnings per share were 16 cents compared with 71 cents a year earlier. No dividend was declared because of depressed market conditions.
'The Hong Kong property market has experienced an abrupt correction as a result of higher interest rates, tightened credit, fluctuations in economic confidence and the prospect of increasing land supply,' it said.
'However, we believe that residential prices will be stabilised by underlying strong demand.' The company expected commercial properties to remain sluggish due to oversupply.
It said it would lease space in The Center at the corner of Jubilee Street and Queen's Road Central to third parties and affiliated companies of Guoco group.
The company's 50 per cent interest in a commercial project in Tsim Sha Tsui is being redeveloped into a grade A office tower and is expected to be completed in mid-2000.
Another residential development in Tai Po, in which it has a 30 per cent interest, is expected to receive an occupation permit in August when a sales campaign will be launched.