Wharf reports loss of $3.2b amid market challenges

Wharf (0004) reported a net loss of HK$3.22 billion last year, reversing a profit of HK$945 million in 2023, due to lower revenue recognition and higher impairment provisions for development properties in mainland China.

The company declared a second interim dividend of 20 HK cents, bringing the total dividend for the year to 40 HK cents, unchanged from 2023.

Its stock fell as much as 8.8 percent to HK$18.56 at one point on Thursday.

The underlying net profit fell 21.5 percent year-on-year to HK$2.8 billion. Impairment provisions for mainland China development properties rose to HK$2.02 billion, up from HK$1.86 billion a year earlier.

Revenue fell 36.1 percent year-on-year to HK$12.1 billion, among which the Hong Kong property business saw a 71 percent decline to HK$322 million.

In mainland China, revenue from development properties fell 65 percent to HK$3.21 billion, while its investment property segment declined 4 percent to HK$4.57 billion.

The sagging economy and property market diminished consumer wealth, leading shoppers to prioritize value, the company said in a filing with the stock exchange.

"For the office sector, persistent oversupply and weak demand continued to depress occupancy and rent levels," the filing said.

Looking ahead, the company said the effect of large-scale fiscal support measures is awaiting materialization to ease the property sector’s debt burden, while rebuilding consumer confidence remains a challenge.

STAFF REPORTER