Conglomerate Wharf (Holdings) on Monday unveiled a cautious outlook for this year after reporting last year's core earnings fell for the first time in six years. The company, whose businesses range from real estate and telecommunications to air-cargo terminals, reported underlying profit, excluding revaluation gains of HK$27.7 billion on investment properties, fell 7 per cent to HK$10.5 billion last year. A sharp drop in property sales on the mainland dragged down its full-year core earnings. "The group's overall businesses will grow this year, but at a slower pace," said deputy chairman and managing director Stephen Ng Tin-hoi. "Business risks come locally and externally." Ng will become the company's chairman after the annual general meeting in May. Hong Kong's retail environment was under pressure from the mainland's austerity campaign, which has dented luxury spending, and competition from Europe, South Korea and Japan as their currencies continued to weaken against the Hong Kong dollar, he said. The firm said retail sales at its three major shopping centres - Harbour City in Tsim Sha Shui, Times Square in Causeway Bay and Plaza Hollywood in Diamond Hill - fell an average 6 per cent in January. Given its exposure to the Hong Kong retail market, Wharf would face a challenging environment, said Bocom International analyst Alfred Lau. "The company's mainland development income was worse than expected," he said. Net profit for last year jumped 22.3 per cent to HK$35.93 billion as turnover grew 20 per cent to HK$38.14 billion. The firm made a provision of about HK$2 billion for the decline in the value of its mainland properties. A final dividend of HK$1.26 was declared, bringing the full-year payout to HK$1.81, against HK$1.70 in 2013. Shares in Wharf dropped 3.33 per cent to close at HK$50.75 on Monday.