Wharf’s 2008 profit declines 52 percent

Bloomberg

Net income dropped to HK$6.25 billion ($806 million), from HK$13.1 billion a year earlier, the company said yesterday.

Sales declined to HK$15.9 billion from HK$16.2 billion.The owner of Hong Kong’s Harbour City and Times Square malls and office complexes booked a gain of HK$1.79 billion to reflect the value of investment properties, compared with HK$9.35 billion last year. Real estate values and rents fell as the city entered its sharpest economic contraction since 1998.

"They don’t have a bright spot they can count on for future growth," said Francis Lun, general manager at Fulbright Securities in Hong Kong. "It’s basically an unexciting property play."

The shares have fallen 9.2 percent this year, while the Hang Seng Index has lost 5.3 percent.Hong Kong developers book declines in investment property values as losses. Excluding assets revaluations, profit dropped to HK$4.19 billion from HK$5.95 billion in 2007.

Profit from property sales fell to HK$84 million from HK$1.13 billion in 2007 as Wharf completed fewer projects. The company also posted a mark-to-market unrealized loss of HK$508 million on interest-rate swaps to convert its $400 million of fixed-rate notes issued in 2007 into a yen obligation.