Robust mainland sales drive Wharf's record profit

PUBLISHED : Friday, 24 August, 2012, 12:00am
UPDATED : Friday, 24 August, 2012, 2:47am

Property conglomerate Wharf (Holdings) saw its core interim profit jump 49 per cent to a record HK$5.43 billion, but the company remained cautious about the second half of the year.

The first-half performance was powered by strong sales on the mainland, where Wharf's annual sales target of 10 billion yuan has already been met by this month and outpaced last year's sales.

"Our next target is to meet last year's sales figure of 12.7 billion yuan (HK$15.5 billion) by the end of this year, though we don't dare to promise it will be even better," said Stephen Ng Tin-hoi, deputy chairman and managing director. Ng said he would take a conservative approach to the market even though the second half was traditionally the peak season for residential sales on the mainland.

Wharf's property sales on the mainland hit a quarterly record of more than 5 billion yuan between April and June, when the home market began to stir again as buyers returned, drawn by lower prices as a result of competition among developers. However, the market had slowed down a bit again, Ng said.

Net profit, including property revaluation gains, for the six months ended June 30 grew 65 per cent to HK$23.65 billion. Revenue surged 87 per cent to HK$18.25 billion.

Half of its revenue came from development properties, surpassing that from investment properties, which contributed about 27 per cent of its total revenue, Wharf said.

Geographically, slightly more than 40 per cent of its first-half revenue came from mainland properties, while 36 per cent was from those in Hong Kong.

Both its prime shopping malls in Hong Kong, Harbour City and Times Square, posted a 14 per cent increase in revenue in the first half.

But the operating profit of its terminal business dropped 15 per cent year on year while that of its media business, i-Cable, recorded a net loss of HK$97 million.

Cammy Lee Mei-ling, senior manager of investor relations, said the group had a net debt of HK$53.2 billion, with a net gearing of 22.9 per cent. But only HK$3 billion of gross debt would mature by the end of next year.

Wharf declared an interim dividend of 45 HK cents per share, up 25 per cent from a year ago.

Its share price rose 4.7 per cent to close at HK$48.90 yesterday, outperforming the Hang Seng Index, which edged up 1.23 per cent on the day.