Property profits expected to decline as provisions on projects fully written back
Wheelock and Co expects to see a decline in its development earnings, as provisions for major projects are fully written back.
The firm reported an 80.98 per cent jump in profit to $4.16 billion for the year to March, largely driven by a $1.66 billion write-back of attributable provisions for properties, mainly the Bellagio residential development in Sham Tseng.
This compared to $27.1 million in attributable provisions written back in the previous year.
Excluding the write-back in both years, profit would have increased only 9.9 per cent from $2.27 billion to $2.5 billion, mainly on an increase in profit contributions from Wharf Properties and a reduction in borrowing costs, according to the company.
Tai Fook Securities research head Marco Mak wrote in a research note that earnings from Wheelock group's property developments 'should start to decline as major projects have been completed and sold and the previous provisions made for such projects have been fully written back'.