Property unit sees modest profit growth despite plunge in turnover
Pacific Century Premium Developments (PCPD), the property arm of PCCW, has posted a 4 per cent increase in interim profit to HK$165 million despite a slump in turnover of more than 50 per cent.
Turnover fell 53.59 per cent to HK$1.07 billion for the six months to June from HK$2.3 billion a year ago, but was offset by an even sharper fall in the cost of sales. PCPD said the cost of sales fell 71.3 per cent to HK$552 million from HK$1.92 billion. This helped lift gross profit 35.6 per cent to HK$518 million.
Revenue from property development was HK$855 million, down 59.45 per cent from HK$2.1 billion. Gross rental remained unchanged at HK$107 million.
The firm said houses at Villa Bel-Air in Hong Kong would be offered for sale in phases over the next few years. It said in a statement it was confident of achieving favourable prices because the supply was limited and they were expected to be highly sought-after. The prospect of yuan appreciation would also encourage more mainland buyers to snap up premium properties in Hong Kong, it said.
PCPD's result was released just over an hour before the Hong Kong Monetary Authority ordered banks to cut the loan-to-value ratio for properties worth HK$12 million or above to 60 per cent from 70 per cent.
Yesterday, the government separately announced measures to stem speculation, including a ban on confirmor transactions - in which buyers make a down payment, then resell the properties before the deadline for completing the purchase.
PCPD said it was stepping up development and marketing plans for its all-season resort development projects in Hokkaido in Japan and Phang-nga in southern Thailand. It said construction of the golf-resort-residential Phang-nga project was expected to begin in 2011 and it has signed a management contract with a top-class international hotel operator.
On the mainland, the group's investment property, Pacific Century Place, in Beijing had enjoyed an average occupancy rate of about 75 per cent for the six months to June. Tenants at commercial-serviced apartment Pacific Century Place were multinational corporations and retailers.
Earnings per share were 6.86 HK cents. The company did not declare an interim dividend. Shares of PCPD fell 1.29 per cent to close at HK$1.52.