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Conglomerate Wheelock reported a 40.2 per cent slide in profit in the year ended March 31 due to a fall in property sales and a rise in provisions.

The company made HK$516.6 million - a profit-low not seen since the late 1980s.

The results, below the market's expectations, caused Wheelock shares to tumble 2.38 per cent to close at HK$6.15.

Some analysts had forecast Wheelock would make a bottom-line profit of HK$1.4 billion after property provisions.

The company recorded a 17.4 per cent fall in turnover to HK$3.76 billion because of low sales revenue at its Singapore subsidiary Marco Polo Development.

In addition to a lower profit contribution from property, the company also recorded lower profits at its associate company Wharf Holdings.

Wharf contributed HK$1.58 billion, a 16 per cent drop from the previous year.

In the period, Wheelock made provisions for impairment in value of properties totalling HK$1.22 billion, mainly on a Sham Tseng development site and a HK$338.7 million provision made by its subsidiary Realty Development.

Wheelock said these provisions also included projects in Tuen Mun and Kwai Chung, and certain land reserved for development.

Analysts said Wheelock could make a provision of HK$635 million on the Sham Tseng Bellagio residential project, the former brewery plant of San Miguel.

ABN analyst Anton Kwang estimated after provisions the average cost of Sham Tseng had fallen to HK$3,700 per square foot, or around market level.

Wheelock chairman Gonzaga Li Wei-jen said the two focus projects, Bellagio and the MTRC Kowloon Station II development Sorrento, should 'yield high revenue potential'. These two projects contributed 5.1 million square feet, bringing Wheelock's total development property portfolio to 7.5 million sq ft.

After restating its entire property and stock portfolio in market value last year, Wheelock's net asset value went up HK$1.35 billion, or HK$13.92 per share.

'Wheelock is an asset play and the market should not read too much into the disappointing result,' Carl Wong of HSBC Securities said.

'Earnings will be improved this year.

'But do not expect a big turnaround in the securities portfolio amid the current market sentiment.'

Wheelock, whose stock portfolio was estimated to be worth between HK$3.3 billion and HK$3.4 billion, recorded a net income of HK$442.2 million last year.

The company declared a 5 HK cents dividend per share, the same as last year.



Wheelock down 40pc on sales fall and provisions