Harbour Centre profits fall 25pc to $53.9m

PUBLISHED : Wednesday, 04 August, 1999, 12:00am
UPDATED : Wednesday, 04 August, 1999, 12:00am

Harbour Centre Development's first-half attributable earnings have fallen 25.44 per cent from a year earlier to $53.9 million.

The Wharf (Holdings) subsidiary said turnover in the six months to June 30 fell a year on year 47.6 per cent to $183.1 million, while earnings amounted to 17 cents per share.

Last month, Wharf said it was considering plans to privatise Harbour Centre, a hotel and property company in which it has a 60.9 per cent stake.

The Harbour Centre proposal came at the same time as the completion of the privatisation of its sister company Lane Crawford International, which is owned by Wharf associate Wheelock.

Lane Crawford minority shareholders had criticised the privatisation as being unfair and of grossly under-valuing the up-market retailer's shares.

Harbour Centre said despite an increase in tourist arrivals to Hong Kong, intense competition among hotels for business meant continued downward pressure on room yields.

'Recovery of the economy in the region and the outlook for the hotel industry in the near term remains uncertain, and the opportunity to increase room rates is unlikely to arise in the foreseeable future,' the company said.

The fall in turnover was attributed by the company to the termination of leases for the Marco Polo Hotel and the Prince Hotel at the end of last year.

Harbour Centre also warned that contributions from the commercial section in the Hongkong Hotel continued to be adversely affected by lower rental and occupancy rates.

However, the company said it would continue efforts to maximise revenue and to control operating costs.

It will pay shareholders a 5 cent interim dividend, unchanged from last year.