Century City companies report steep drop in profits
Steep drop blamed on lack of one-off gains at hotel and property companies
Companies under Century City International Holdings posted a significant decline in their first-half profits in the absence of one-off gains that pushed up the bottom line last year.
Century City said its net profit fell to HK$10.1 million in the six months to June, compared with a HK$1.13 billion profit in the same period last year.
The steep drop was largely caused by a fall in earnings from its property and hotel units Paliburg Holdings and Regal Hotels International Holdings, it said.
The company still declared an interim dividend of 0.6 HK cent per share, up from 0.55 HK cent for the corresponding period last year.
Paliburg, the group's profit engine, said its six-month net profit dropped to HK$27.5 million from HK$2.22 billion.
Last year's first-half profit had spiked as Paliburg booked a one-off net accounting gain of HK$2.12 billion on consolidating Regal Hotels, which became its subsidiary in May.
Despite the drop in net profit, directors announced an interim dividend of 2.2 HK cents per share, compared with 2 HK cents for last year's first half.
Paliburg's turnover rose 63.21 per cent to HK$975.2 million.
The company said the outlook for Hong Kong's real estate sector in the near future would continue to be affected by factors such as the pace of economic growth, interest rates as well as government policies.
As of June 30, Paliburg's gearing ratio was 15.4 per cent, against 10.5 per cent at the end of last year.
Regal Hotels reported a net profit of HK$60.5 million, compared with HK$380.6 million in the corresponding period last year.
The interim results last year included profit contributions from the sale of houses in Regalia Bay as well as from the one-off realisation of hedge reserves.
The company, however, said its core hotel business continued to do well.
It declared an interim dividend of 3.6 HK cents per share, up from 3.3 HK cents in the first half of last year.