Cheung Kong blames profit fall on developer discounts and incentives
Property company blames dent in sales margins on price discounts and other buyer incentives from local and mainland developers
Cheung Kong (Holdings) said yesterday that its first-half core profit slipped 1 per cent to HK$7.13 billion as price discounts and incentives being offered by developers in Hong Kong and on the mainland to entice buyers have adversely affected the profit margin of property sales.
"We continue to increase our interests in the infrastructure sector and we are focused on exploring new investment opportunities to generate additional stable revenue streams to drive forward our growth momentum," said chairman Li Ka-shing, Asia's richest man, in the company's statement.
After taking into account contributions from Hutchison Whampoa and a revaluation gain from its investment properties, Cheung Kong said its first-half net profit jumped 59 per cent to HK$21.34 billion. Earnings per share for the first half rose 59 per cent to HK$9.22, from HK$5.79 last year.
Turnover, again excluding the contributions from Hutchison, was up 1 per cent to HK$14.74 billion.
Cheung Kong owns 49.97 per cent of Hutchison, just short of majority control to make it a subsidiary.
Not including the contribution from Hutchison, the group's core profit was HK$7.13 billion for the six months to June, 1 per cent under the HK$7.21 billion of a year ago.