The 4 per cent increase comes despite write-downs on lower-value projects Full-year profit at Henderson Land Development rose a modest 4 per cent, despite a write-down for the declining value of its projects. Earnings for Hong Kong's third-largest property developer were $2.24 billion in the year to June, slightly exceeding analyst expectations of $2.06 billion to $2.24 billion. It took a provision of $328 million. Chairman Lee Shau-kee yesterday said the company's outlook would improve with the recovering property market. But analysts were less certain, saying earnings would depend on the size of future provisions for the declining value of Henderson's projects. Total turnover for the group rose 23 per cent to $7.66 billion from $6.22 billion previously. Henderson's property development division reported a loss of about $244 million on a turnover of about $3.91 billion due to provisions for completed properties in Hong Kong and the mainland. In addition, the Sars crisis took a toll on Henderson's rental earnings. Profit from the division fell to $1.22 billion from $1.32 billion in the previous year. The final dividend was steady at 45 cents, equal to last year's. Mr Lee said the property market had hit bottom and was now ready to recover. 'After the decline of the past few years, the worst of the economy of Hong Kong is now behind us. The property market is expected to show a steady upward trend from this point,' he said. 'Since July, positive steps have been taken on the economic front by the central government. These developments have boosted the confidence of Hong Kong citizens, improving the economy and allowing property prices to become more stable.' Henderson planned to launch 4,600 residential units for pre-sale between now and the end of next year. He said demand for office space would increase as more foreign corporations - drawn by the closer economic partnership arrangement - set up offices in Hong Kong. Henderson had also earmarked $4.94 billion to develop hotels. Earnings from its hotel operations dropped to $35 million from $42 million in the previous year, as turnover and room tariffs fell. HSBC analyst Derek Cheung said the planned expenditure indicated developers were positive in their medium-term outlook for the property sector. But he said it would take a year before it would be known whether the recovery was real. 'However, positive results would only be seen after the developments had been completed in a few years' time,' Mr Cheung said. Meanwhile, subsidiary Henderson Investment reported net profit slid 9 per cent to $1.62 billion. Its 65.45 per cent-owned Henderson China Holdings posted a net loss of $395 million, due to provisions on projects and bad-debt write-offs in relation to property rentals. Last year, Henderson China recorded a net profit of $133 million. Stripping off the provisions, Henderson China would have earned a development profit of $61 million. Gross rental income dropped to about $41 million from the preceding year's $68 million.