Hong Kong developer K Wah reports first decline in core profit since 2017 in absence of dividend from chairman Lui Che-woo’s casino firm Galaxy Entertainment
- The company’s 2021 underlying profit, excluding a revaluation gain on investment properties, fell 17.4 per cent to HK$2.93 billion
- In 2020, K Wah received HK$73 million in dividend from Galaxy, which owns and operates hotels and casinos in Macau
The company’s 2021 underlying profit, excluding a revaluation gain on investment properties, fell 17.4 per cent to HK$2.93 billion (US$374 million) from HK$3.54 billion, K Wah said in a statement on Tuesday. Net profit taking the revaluation gain into account rose 3 per cent to HK$3.4 billion.
“The global economy is expected to be volatile and growth is less visible, as there are more uncertainties resulting from the anticipated interest rate hikes led by the US, along with its tightening of liquidity to curb its rising inflation,” the company said.
As of December last year, Galaxy’s share price was down to HK$40.4 from HK$60.25 as of the end of 2020, which translates into a HK$3.2 billion decline in the total value of its 162 million shares. K Wah said on Tuesday that the change in Galaxy’s fair value would not be reclassified to profit or loss. Since it did not sell the stock, the decline in Galaxy’s fair value will not affect K Wah’s balance sheet.
K Wah recorded a 38 per cent increase in turnover to HK$16.2 billion last year, mainly from property sales at its K Summit and Solaria developments in Hong Kong, its Azure and Windermere projects in Shanghai, the J City development in Jiangmen, and rent income from the Shanghai K Wah Centre.
