Provisions drive RDC into the red
Wheelock and Co unit Realty Development Corp (RDC) made a HK$352.9 million first-half loss, compared with a HK$77.9 million profit a year ago.
The deficit was caused by a HK$434.5 million provision for impairment in the value of the company's land bank reserved for development.
RDC said the provision was made in view of the depressed property market following an internal review. It did not specify the land involved.
Its investment properties were also revalued, resulting in a deficit of HK$316.7 million charged against the investment property revaluation reserves account.
The company's operating profit before borrowing costs and property provisions was HK$92.7 million, down a year-on-year 11.7 per cent.
Profit contribution from property development was HK$18 million lower, at HK$1.2 million, due to reduced profit margins.
Its property investment division contributed an operating profit of HK$53.4 million while investment income amounted to HK$43.1 million.
Loss per share was 30.6 HK cents, against earnings of 6.8 HK cents previously. RDC will pay an unchanged interim dividend of three HK cents per share.