A $1.3 billion provision for its property developments and a $563 million loss on securities investments dragged net profit at Sino Land down 50.8 per cent to $908.68 million for the year to June 30. The write-downs mirror similar moves by other developers that have made billion-dollar provisions for their developments due to the dramatic decline in property values. Analysts had previously estimated the company's full-year results at $1 billion to $1.5 billion and were not optimistic about Sino's short-term earnings prospects. They said the company could make further provisions for its property developments in the next couple of years. They added that Sino might have to make provisions of more than $3 billion to cover aggressive property purchases made in recent years. Sino, controlled by the family of chairman Robert Ng Chee Siong, paid a record $11.82 billion for a Siu Sai Wan residential site as part of a consortium, which included Bank of China Group, at the market peak last year. Analysts said the company also needed to provide for its investment in the second phase of Olympian City beside the airport railway in Tai Kok Tsui. Dresdner Kleinwort Benson property analyst Terry Ip said that, this financial year, Sino would continue to see more than $1 billion in property revenues. He expected net profit to fall to $600 million after an anticipated $1 billion provision for property projects. 'The company will not go bust,' said Mr Ip, although he said the company was carrying $16 billion in debts and was one of the highest-geared developers in Hong Kong. Analysts said Sino would reap cash through the sale of its development projects and properties originally held for long-term investments. Stripping out the property provision, Sino reaped an encouraging operating result, posting a 93.5 per cent rise to $2.39 billion in operating earnings before exceptional items. The earnings were derived mainly from the sale of a number of properties such as The Mayfair, Grand Dynasty View, Grand Palisades and The Waterside. During the year, the company made a loss of $562.96 million on the disposal of long-term listed investments but reaped a $50.33 million profit from the repurchase and subsequent cancellation of convertible bonds. Earnings per share were 29.7 cents, down from 64.4 cents. Directors declared a final dividend of three cents, bringing the full-year dividend to 13 cents, down from 26 cents previously. Due to the drastic fall in Sino's contributions and a bigger loss in securities investments, parent company Tsim Sha Tsui Properties yesterday said full-year profits fell 98.1 per cent to $16.9 million from $874.78 million. Earnings per share fell to 1.3 cents, from 68.9 cents. Directors declared a final dividend of one cent, making a whole-year dividend of 11 cents, down from 26 cents. Mr Ng, who also chairs Tsim Sha Tsui Properties, said property sales attributable to Sino amounted to $5.42 billion, representing a 171 per cent rise from $2 billion in the preceding year. Part of those property revenues are understood to be booked this year or next. Sino's leasing operation recorded respectable growth in spite of the consolidating market environment. Gross rental revenue rose 7.7 per cent to $1.2 billion from the same period last year and the rental portfolio maintained satisfactory occupancy rates. During the year, Sino repurchased 52 million ordinary shares in the company for $240.24 million.
