Firm hit by a large provision, a sluggish property environment and high costs New World Development (NWD) has reported its first full-year loss in more than 30 years, dragged down by a one-off provision of $4.77 billion after being hit by the sluggish property market and high development costs in the mainland. The company reported a net loss of $4.81 billion, after making provisions on Hong Kong and mainland property projects, investments in the telecommunications, media and technology sectors and charges arising from a reorganisation during the year to June. Turnover fell to $21.05 billion from $22.87 billion in the previous year. NWD made a provision of about $2 billion against a decline in the value of its investment properties. For the first time since the firm listed in 1972, no final dividend was declared. The company, which has businesses including property, hotels, telecommunications, transport and infrastructure, reported a profit of $1.27 billion in the previous year after an exceptional gain from the sale of a hotel. 'We made a very difficult decision of making such huge provisions last year. But I believe we made a right decision,' managing director Henry Cheng Kar-shun said. 'The provisions we have made will create a solid platform to enable the group to leverage the anticipated growth in the Hong Kong and mainland economies.' In 1999-2000, NWD posted its first interim loss of $907.2 million because of an exceptional loss arising from the spin-off of its 70 per cent-owned mainland investment arm New World China Land. Analysts support the company's decision to incur the current provision but they remain concerned over the group's debts. BNP Paribas Peregrine analyst Adrian Ngan said NWD shares, following a rise of nearly 170 per cent from April, were expensive at this stage. The stock yesterday dropped 7.46 per cent to $6.20. NWD, together with its listed subsidiaries, has consolidated net debts of $31.23 billion, against $30.13 billion in the previous year. Mr Cheng said the company would concentrate on lowering its huge debts. 'Excluding sale of non-core assets, I believe we can cut debts by $3 billion this fiscal year through our operations,' he said. Mr Cheng did not rule out writing back part of the provisions if the property market continues to show signs of a pick-up. NWD made a $2.36 billion provision on Hong Kong property projects, provisions of $1.03 billion on mainland properties and a $964 million provision on the inventories of its telecommunications flagship New World Infrastructure's investments. Mr Cheng anticipated that 54 per cent-owned NWS Holdings would see a more stable performance.