Wharf Real Estate Investment Company (1997) H2 2023 earnings summary

Executive summary

• Core businesses stabilized in 2H 2023 as revenue and operating profit grew, while doubled borrowing costs weighed on underlying net profit.

• IP valuation was nearly flat in 2H; net debt fell $8.8B and gearing declined to 18.6%.

Financial highlights

• FY revenue rose 7% to $13,306M; IPs and Hotels revenue increased 8% to $12,477M.

• Operating profit increased 13% to $9,993M; IPs and Hotels operating profit rose 12% to $9,456M.

• Underlying net profit, excluding IP revaluation deficit and exceptional items, fell 3% to $6,011M; underlying EPS declined 2% to HK$1.98.

• Profit after IP fair value change was $4,766M versus a loss of $8,856M in 2022; attributable EPS was HK$1.57 versus a loss of HK$2.92.

• FY dividend per share was HK$1.28 versus HK$1.31; 2H second interim dividend was HK$0.61, unchanged YoY.

Outlook and guidance

• Potential rate pivot, Individual Visit Scheme expansion and further visitor recovery are supportive factors; eligible mainland cities increased from 49 to 51 on 6 Mar 2024.

• Strategy remains focused on monitoring market developments and adjusting to opportunities amid evolving post-pandemic trends.