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SCMP Reporter

Profit attributable to shareholders at Kumagai Gumi (Hong Kong) fell last year in results affected by an exceptional gain in 1994.

Profit excluding the impact of the exceptional was up strongly, by 35 per cent, with a mild decline in operating profit being made up for by a significant contribution from mainland property developments at the associated company level.

 For the 12 months to December, profit attributable was $337.9 million, compared with $906 million in 1994, a 62 per cent fall.

 In 1994 the group booked a $655.4 million exceptional on the sale of the Ambassador Hotel in Tsim Sha Tsui.

 After stripping out the exceptional, profit in 1995 rose 34.78 per cent from $250.69 million.

 Looking ahead, analysts said, the group was expected to book significant profits from the completion of mainland property projects.

 Profit attributable could range from $600 million to $650 million in the period, on a big increase in contribution from Shun Hing Square, Shenzhen, and Sky Central Plaza, Guangzhou, at the associated company level.

  Completion and the booking of sales at Villa Rosa, Tai Tam, also would boost operating profit. There also was the planned listing of the group infrastructure interests this year, being handled by HSBC.

 In 1995, operating profit slid 13 per cent to $212.4 million on a 2 per cent slide in turnover to $3.47 billion. Operating profit margin was 6.1 per cent in 1995 against 6.9 per cent in 1994.

 Share of profits, less losses, of associated companies jumped 600 per cent to $181.2 million.

 Earnings per share on a fully diluted basis and after stripping out the impact of the exceptional was up about 31 per cent to 83.4 cents.

 The declared dividend was 28 cents at the final stage taking the total for the year to 50 cents, the same as in 1994.

 A bonus issue of warrants on a one-for-five basis was announced, with a subscription price of $7.50 and an expiry of June 30, 1998.

 Deputy managing director and deputy chairman Frederick Ma said: 'The group plans to bid for major civil engineering and building contracts in both Hong Kong and China, particularly large infrastructure projects in southern China.'   Recurring income, from the retail podiums at the group's mainland development projects would help to stabilise earnings.

 According to analysts, recurring income might be up to $120 million a year, when the full contribution from the commercial sites came through.

 'The completion of the group's major property developments in the coming two years and the proposed spin-off of the Yangpu infrastructure project, are expected to place the group in a strong financial position to embark on new projects and investments,' said Mr Ma.

LOOKING AHEAD Significant profit from the completion of mainland projects Booking of sales at Villa Rosa in Tai Tam expected to boost income 



Kumagai Gumi earnings jump 35pc, stripping out exceptional