The Wharf (Holdings) (4) H1 2024 earnings summary

Executive summary

• Underlying net profit rose 9% year-over-year to HK$1,979 million, mainly due to lower impairment provisions on development properties.

• Group reported a net loss of HK$2,637 million versus a profit of HK$696 million last year, driven by a HK$4,481 million non-cash revaluation deficit on investment properties.

• Revenue declined 14% year-over-year to HK$7,032 million, with most segments showing weaker performance.

• Interim dividend maintained at HK$0.20 per share, totaling HK$611 million.

• Consumption and investment in the property sector stalled, with capital values declining and market vibrancy lost.

Financial highlights

• Operating profit declined 2% to HK$3,085 million.

• Investment properties segment profit fell 5% to HK$1,207 million; development properties loss narrowed by 36% to HK$462 million.

• Hotels segment operating profit dropped 73% to HK$12 million; logistics segment profit down 39% to HK$123 million.

• Basic loss per share was HK$0.86, compared to earnings per share of HK$0.23 last year.

• Net operating cash inflow before working capital changes was HK$2.3 billion.

Outlook and guidance

• Business outlook remains uncertain due to global economic volatility, high US interest rates, and subdued consumer sentiment in Mainland China.

• The group will continue prudent financial management and seek opportunities amid economic headwinds.

• Ongoing volatility expected due to global economic sensitivity to US interest rates, trade tensions, and geopolitical risks.

• No new land bank replenishment in Mainland China since 2019; focus remains on Hong Kong projects.

• Recovery in luxury property sales expected to be gradual, with Hong Kong seen as having better prospects than Mainland China.