Wharf Real Estate Investment Company (1997) investor relations material

Executive summary

• Underlying net profit rose 6% year-over-year to HK$3,311 million, driven by lower interest costs, prudent debt management, and improved hotel performance.

• Interim dividend per share increased by 42% to HK$0.94, reflecting a revised payout ratio from 65% to 90% of recurrent core underlying net profit.

• Net cash inflow before financing increased by 41% to HK$1.4 billion.

• Group loss attributable to equity shareholders narrowed to HK$176 million from HK$2,406 million, mainly due to a smaller investment property revaluation deficit.

• Wheelock Place in Singapore agreed to be sold at a 12% premium to book value, with expected net proceeds of HK$6.7 billion and further reduction in gearing.

Financial highlights

• Group revenue decreased by 1% year-over-year to HK$6,340 million; operating profit fell 2% to HK$4,604 million.

• Investment properties revenue dropped 2% to HK$5,265 million; hotel revenue rose 10% to HK$842 million, with operating profit up 94% year-over-year.

• Finance costs decreased by 37% to HK$535 million, with effective borrowing rate down to 3.5% from 4.4%.

• Recurring core underlying net profit increased by 3% year-over-year to HK$3.2 billion.

• Basic loss per share improved to HK$0.06 from HK$0.79 year-over-year.

Outlook and guidance

• Gradual and uneven growth expected, supported by inbound tourism, a stabilizing residential property market, and steady local confidence.

• Interest rate uncertainties, geopolitical risks, and China's outbound investment rules may impact tenant sentiment and market volatility.

• The group will maintain a prudent, low-leverage financial profile and regularly review the dividend payout policy.

• No major CapEx is planned at the REIC level; cash flow is expected to remain well managed.