Wharf expects stormy half
Wharf Real Estate Investment (1997) says the local market is facing a "perfect storm" and the retail industry will be struggling in the second half. It posted 3 percent year-on-year growth in first-half net profit to HK$5.18 billion, said chairman and managing director Stephen Ng...
Wednesday, August 07, 2019
Wharf Real Estate Investment (1997) says the local market is facing a "perfect storm" and the retail industry will be struggling in the second half.
It posted 3 percent year-on-year growth in first-half net profit to HK$5.18 billion, said chairman and managing director Stephen Ng Tin-hoi.
Ng said local consumption demand has weakened since the beginning of this year, affected by the Sino-US trade war, slowing global economy and political unrest in Hong Kong. And yuan depreciation will affect consumption and demand in the local market.
He is negative about the second-half outlook for the hotel business and the whole retail industry, as there are many external and local uncertainties.
Harbour City, including hotels, remained the key driver of Wharf REIC, contributing 73 percent of total revenue. The mall's revenue rose by 5 percent to HK$6.17 billion. However, Harbour City's total sales slipped by 1 percent to HK$18.5 billion amid challenging market conditions. Rents on average grew by 4 percent to HK$508 per square foot per month.
Operating profit at another major shopping mall, Times Square, slipped 0.94 percent year on year to HK$1.27 billion, while revenue remained at HK$1.43 billion. The average retail rent was HK$290 per square foot per month.
Vice chairman and executive director Doreen Lee Yuk-fong said the two shopping malls both saw declines in foot traffic and retail sales recently, affected by protests, and the customer and staff safety is its first priority. The company will try to avoid having police entering the malls.
With investment properties' revaluation surplus declining 65 percent to HK$1.81 billion, Wharf REIC's net profit dropped 31 percent to HK$6.99 billion for the first six months. Basic earnings per share were HK$2.30.
The company declared an interim dividend of HK$1.10 per share. Shares of Wharf REIC increased by 0.33 percent to HK$45.85 yesterday.
Meanwhile, InterContinental Hotels said yesterday that revenue per available room fell 0.5 percent in Greater China, where the group operates about 400 hotels, in the second quarter, amid the escalating Sino-US trade war and weekly protests in Hong Kong.