Revaluation hurts Guoco profit

PUBLISHED : Monday, 20 October, 2003, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

Investment company Guoco Group has suffered a fall in full-year profit, blaming Sars, the war in Iraq and a revaluation of its properties for the disappointing result.

Guoco, controlled by Malaysian billionaire Quek Leng Chan, said yesterday its attributable profit slid 22.5 per cent to HK$1.22 billion in the year to June.

The decline came after a 12 per cent growth in turnover to HK$2.33 billion was partly offset by a $581.19 million deficit on revaluation of investment properties.

Despite this, the firm proposed to maintain the final dividend at 70 HK cents per share, bringing the full-year payout to $1.1 per share. Earnings per share dropped 12.76 per cent to $3.76.

During the year, Guoco's property division fared better than its financial services business.

Its property flagship - 61.5 per cent owned Guoco Land - posted a S$94.2 million (HK$419.47 million) net profit, up from a $179.9 million net loss the previous year.

The turnaround was attributable mainly to sales of residential projects in Singapore and other property assets in Suzhou.

Income from property sales jumped 50.88 per cent to HK$1.48 billion.

In Hong Kong, its securities trading, fund management and insurance companies under the Dao Heng umbrella faced a hostile operating environment on the back of the Sars outbreak and the Iraq war.

The deregulation of the minimum brokerage commission intensified competition and hurt Guoco's securities trading business.

Turnover of its security commission and brokerage shrank 21.36 per cent to HK$33.15 million.

Gross insurance premiums tumbled 39.74 per cent to HK$108.37 million.