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Great Eagle Holdings' net profit fell 18.6 per cent to HK$507.3 million last year on weakness in its commercial rental and hotel businesses.

The group blamed the global economic slowdown and the after effects of the September 11 terrorist attacks on the United States for the decline, which was in line with market expectations.

Deputy chairman and managing director Lo Ka-shui said the economic downturn had adversely affected its rental and hotel operations, as businesses cut back and curtailed international travel.

Overall occupancy of the Great Eagle Hotel in Hong Kong, for example, dropped from 83.4 per cent to 78.8 per cent.

Mr Lo expected the market to remain soft for the next few months. But he said recent economic data in the US showed the economy was recovering.

Turnover slid 7.65 per cent to HK$2.67 billion. Earnings per share fell about 21 per cent to 90 HK cents. A final dividend of 14 HK cents was declared, in scrip with a cash option.

Great Eagle's consolidated net asset value amounted to HK$15.12 billion at the end of last year, a decrease of HK$2.37 billion from a year earlier. Its gearing ratio rose to 73 per cent at December 31 as a result of the general decline in the value of local and overseas commercial and hotel properties.

Last year, Great Eagle bought 232,501 square feet of office space at Citibank Tower in Central for about HK$1.95 billion.

Assistant director Adrian Lee said the company did not have plans for further similar acquisitions. It would focus on its 1.76 million sq ft office, retail and hotel development in Mongkok this year.

He said Great Eagle planned to start pre-leasing of the project's retail space this year. Target occupancy date of the giant project remains the end of next year.

Total expenditure on the Mongkok project, including interest, was HK$6.69 billion at the end of last year.



Rent, hotel weakness hit profit at Great Eagle