Hopewell up 80pc on non-core sale

Growth in core businesses and a gain from a non-core asset sale helped Hopewell Holdings record an 80 per cent jump in profit in the year to June 30.

The construction and infrastructure investment company posted a net profit of HK$306 million, up from HK$169 million the previous year.

Turnover was up 11 per cent to HK$1.75 billion.

'We have seen an overall improvement in our different business divisions,' said executive director Thomas Wu.

Revenue from its flagship toll-road project, Guangzhou-Shenzhen Superhighway, grew 10 per cent while average daily traffic increased 13 per cent. Two other projects, Shunde Roads and Shunde 105 Road, registered traffic growth of 5 per cent and 12 per cent respectively.

Occupancy rates at its two rental properties, Hopewell Centre in Wan Chai and the Hong Kong International Trade and Exhibition Centre, improved about 5 per cent, to 94 per cent and 63 per cent respectively.

The company's hospitality division, which operates the Panda Hotel in Tsuen Wan and catering services, made a HK$33 million profit.

Such business improvements resulted in a 19 per cent growth in the company's recurring earnings.

However the main contributor to net profit growth was a non-recurring profit of HK$382 million from the sale of a 25 per cent stake in Shunde Roads.

The one-off gain more than offset the loss arising from another non-recurring item - a HK$290 million provision for a hotel project in Malta.

The proceeds from the sale also helped alleviate the company's debt burden. During the year, Hopewell saw its debt-to-equity ratio fall to 56 per cent from 75 per cent previously.

Mr Wu said Hopewell would continue to strengthen its financial position to ensure better returns.

However, he said aggressive cuts in interest rates this year would be of little benefit to the company.

'This is because more than half of the company's debts were financed through bonds, for which interest rates are fixed at around the 10 per cent level,' Mr Wu said.