Wharf REIC back in the black with $4.7b profit

Wharf Real Estate Investment Company (1997) swung to a net profit of HK$4.77 billion last year and announced a second interim dividend at 61 HK cents.

That compared with an loss of HK$8.86 billion in 2022 and the latest dividend payout will bring the total dividend for the year to HK$1.28 per share, down 2.3 percent from a year ago.

The underlying profit, excluding property revaluation, fell 2.7 percent to HK$6.01 billion due to rising financing costs amid higher interest rates.

Revenue in 2023 increased by 7 percent to HK$13.3 billion driven by the improvement of investment properties and hotels after borders reopened early last year.

Revenue of Harbour City, including hotels, jumped 10 percent from a year earlier while its operating profit saw a 13 percent year-on-year rise.

Times Square saw a 3 percent decrease in total revenue while operating profit held steady, the company said.

Despite positive signs including a potential interest rate cut this year, uncertainties such as a global economic slowdown and geopolitics could spark volatility, the firm said. Evolving consumption behaviors and increasing regional competition are also impacting the retail and hotel recovery path, it added.

Chairman Stephen Ng Tin-hoi said there is excessive panic over the decline in overnight visitors to the city, saying many issues are cyclical. If the yuan strengthens against the local currency, there will be more mainland visitors and fewer Hongkongers heading north for shopping.

Shares of Wharf REIC rose 5.7 percent after the release of earnings.