Midland Realty posted a net profit of HK$40.96 million for the year to December 31, down 23.1 per cent from the previous year. Turnover rose 17 per cent to HK$916 million. It brokered 37,863 rental and sales transactions, up 26 per cent from the previous corresponding period. Earnings per share were 6.9 HK cents, against nine HK cents a year earlier. A dividend of 1.8 HK cents was declared, bringing the full-year dividend to 2.3 HK cents. The company said a HK$17 million Mandatory Provident Fund contribution had hit earnings. Operating profit dropped 24 per cent to HK$62.46 million from HK$82.36 million. Chairman Wong Kin-yip estimated many property agents would quit this year due to keen competition. At present, there are about 13,000 agents in the market. 'About 20 per cent of the existing agents in the market will be eliminated this year because of the weak economic sentiment and the drop in transactions,' Mr Wong said. He expected more mergers and acquisitions of small- to medium-sized agency firms. Meanwhile, Midland is moving part of its Hong Kong operations to China to cut costs. Other cost-cutting plans include negotiating rent reductions in retail outlets and lowering sales agents' commission rates for primary residential sales. The company has also implemented a new computer system, which it said would save about HK$7 million a year.