• Fri
  • Aug 22, 2014
  • Updated: 11:50am

One-off gains propel Shun Tak net 20-fold

PUBLISHED : Tuesday, 15 September, 2009, 12:00am
UPDATED : Tuesday, 15 September, 2009, 12:00am

Shun Tak Holdings saw its interim earnings surge 20-fold to a record high, thanks to property revaluation gains and the sale of a stake in a hotel.

Driven by an HK$890 million revaluation gain and a HK$680 million profit from selling a 50 per cent stake in the Mandarin Oriental Hotel in Macau, the company posted net income of HK$1.69 billion.

That was a big jump from HK$84.1 million a year earlier, when it recorded only a HK$300,000 gain from the revaluation of its assets.

Excluding the one-off gains and non-cash items, the underlying profit rose 43.2 per cent to HK$120 million from HK$83.8 million.

The company declared an interim dividend of 3.8 HK cents per share. It did not pay any dividend a year ago.

Revenue fell 8.3 per cent to HK$1.66 billion, mainly because of deteriorating operations at Shun Tak's transport arm.

The global recession, visa restrictions on mainland travellers, stiff competition and the effects of the swine flu pandemic put heavy pressure on the transport industry, said managing director Pansy Ho Chiu-king, the daughter of group executive chairman Stanley Ho Hung-sun.

The transport arm posted an operating loss of HK$14.08 million, an improvement from HK$47.28 million a year earlier, thanks to cost control measures and softening oil prices.

The Hong Kong-Macau route of its TurboJet high-speed ferry service, which accounts for 89 per cent of the segment's revenue, recorded a 24 per cent drop in passenger volume.

Shun Tak said the challenging environment also hurt the hospitality segment, which made an operating loss of HK$34.46 million, compared with a profit of HK$20.45 million last year. Operating profit from property development and investment rose 15 per cent to HK$138.86 million.

Analysts expect better core earnings in the second half as the transport unit continues to improve amid a stabilising economy and a possible easing of Beijing's visa restrictions on mainlanders travelling to Macau.

Sales at One Central, a luxury residential project in Macau, will be recognised in the second half and become a key income stream.

Shun Tak's shares fell 2.3 per cent to close at HK$6.51 yesterday.

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