Wheelock Properties

Wheelock's underlying profit falls 6.49pc

PUBLISHED : Friday, 15 June, 2007, 12:00am
UPDATED : Friday, 15 June, 2007, 12:00am

Wheelock and Co, Peter Woo Kwong-ching's flagship conglomerate, said its underlying full-year profit declined 6.49 per cent due to lower property sales and a decline in gains from the disposal of long-term investments.

The property-to-telecommunications company said underlying profit in the year to March slid to HK$2.99 billion from HK$3.2 billion a year earlier.

Net profit slumped 38.83 per cent to HK$6.31 billion, or HK$3.11 a share, from HK$10.31 billion, or HK$5.08 a share, after gains from property valuation and property write-backs plunged 53.39 per cent to HK$3.31 billion, as property values in the city did not rise as rapidly as in 2005.

The performance was better than the mean estimate of HK$5.23 billion in a Thomson poll of brokers.

The company said turnover fell 19.09 per cent to HK$2.77 billion, reflecting the lower sales recognised by the property development segment.

Wheelock, which owns 74 per cent of listed Wheelock Properties and 48 per cent of Wharf (Holdings), said operating profit from property development dropped 37.3 per cent to HK$558 million.

The decrease was mainly due to the absence of completions by Wheelock Properties (Singapore) (WPS) and lower profit contribution from the sale of its Bellagio units in Sham Tseng. Developers can book sales only once a flat can be occupied.

Operating profit from investment fell 40.15 per cent to HK$386 million from HK$645 million as gains from the disposal of long-term investments dropped 74.58 per cent to HK$61 million from HK$240 million a year ago. In addition, there was a HK$120 million profit contribution from the sale of Oakwood Residence.

The company's media and communications divisions also struggled.

Pay-television operator i-Cable saw its profit before tax dip 26 per cent to HK$210 million as a result of escalating programming costs and keener marketing and pricing strategies. Fixed-line telephone operator Wharf T&T's recorded an operating loss of HK$64 million.

The company said it had net cash of HK$1.33 billion at the end of the fiscal year, a swing from a net debt of HK$2.68 billion a year earlier. It said it had maintained a portfolio of available-for-sale investments with a market value of HK$4.16 billion as of March 31, which primarily consisted of a 20 per cent interest in Hotel Properties owned by WPS and other blue-chip securities.

The final dividend was left unchanged at 10 HK cents per share.

Before the announcement, shares of Wheelock rose 0.72 per cent to close at HK$19.64 yesterday. They have risen 33 per cent this year, outperforming a 4.5 per cent gain in the Hang Seng Index.

Heading south

The fall in Wheelock's turnover, weighed down by a drop in its property business 19%