Wharf and Hysan expected to have suffered on three fronts
Dismal property prices, office rentals and tourist numbers set to take their toll
Reduced property prices, slumping office rentals and minimal tourist arrivals during the Sars crisis are expected to have hit the first-half earnings of Wharf (Holdings) and Hysan Development.
Tomorrow, Wharf is expected to report up to a 10 per cent fall in rental income from investment properties to $1.35 billion due to the slowdown in the commercial market, while hotels in Tsim Sha Tsui could report a loss of up to $50 million because of Sars.
Analysts said the conglomerate, which has investments in property, container terminals, hotels and telecommunications, would report a decline in net profit if it decided to make provisions for its interests in loss-making projects, Bellagio in Sham Tseng and the Sorrento in Kowloon Station.
The decrease could be by as much as 11 per cent, to $1.06 billion, if $300 million worth of provisions were made in the first half, UBS said.
In the first half of last year, the company made a provision of $366 million on property projects.