Wharf (Holdings) is expected to report today a profit of HK$2.4 billion to HK$2.8 billion for last year, compared with HK$2.51 billion a year earlier. Analysts said the amount of additional provisions for property developments would be largely responsible for the variance in the property-to-ports conglomerate's final result. The consensus forecast of analysts polled by Thomson First Call put Wharf's full-year profit at HK$2.77 billion. The group's first-half profit rose 5 per cent year on year to HK$1.2 billion on lower borrowing costs and higher contributions from its cable television business. CLSA analyst John Saunders forecast a flat result at HK$2.54 billion and expected the dividend to be maintained at 78 HK cents, representing a 4.8 per cent dividend yield. He said Wharf could make a further HK$259 million property provision for Sorrento in Kowloon Station and a Pokfulam site, in addition to HK$204 million provided in the first half. Mr Saunders said the ports exposure would continue to underpin growth for Wharf in the medium term. Although Wharf was selling its development projects at break even or even a small loss, the conversion of property into cash would help maintain and then increase dividend, he said. UBS Warburg believed provisions were a key issue in Wharf's results. The brokerage put Wharf's profit figure at HK$2.43 billion, down 3 per cent year on year. The forecast had been revised down 11 per cent as UBS Warburg expected Wharf to take an additional provision of HK$73 million for Bellagio and HK$102 million for Sorrento. Net rentals were expected to show a marginal 2 per cent improvement while operating profit of container terminals should remain flat. UBS Warburg also expressed concerns that the Iraq war and the atypical pneumonia outbreak might affect overseas and mainland tourist travel patterns, adding that Wharf had exposure to trade and tourism. However, Morgan Stanley expected Wharf's full-year profit to rise 10 per cent to HK$2.76 billion on the back of lower finance charges and stronger contributions from Modern Terminals. It said interest expenses would drop 36 per cent to an estimated HK$704 million, but expected Wharf to write down a further HK$100 million to HK$125 million for Bellagio. Rental income was expected to fall nearly 10 per cent year on year to HK$2.5 billion due to declining rents and weak office occupancies.