Sino Group reports 24.7% profit decline on slower home sales, higher revaluation losses

Net profit amounted to HK$4.4 billion (US$564 million), down 24.7 per cent from HK$5.8 billion in its 2022-2023 financial year, Sino Land said in a filing to the Hong Kong stock exchange on Tuesday.

Revaluation losses were more than three and a half times higher from a year ago at HK$580 million. Revenue from property sales for the financial year was HK$8.89 billion, down 25.5 per cent from HK$11.93 billion.

Property revenue mainly derived from residential units and car parking spaces at its Grand Victoria phases 2 and 3 in southwest Kowloon, as well as One Soho in Mong Kok and the remaining stock of other projects in Wong Chuk Hang, Ho Man Tin and Kwun Tong.

During the financial year, the group launched two new residential developments – La Montagne in Wong Chuk Hang, which is 6.8 per cent sold, and Villa Garda III in Tseung Kwan O, which is 34.9 per cent sold.

“Looking ahead the group has a pipeline of new projects to be launched,” Sino Land said. “These include Once Central Place in Central and Grand Mayfair III in Yuen Long, which have obtained presale consents.”

The developer added that presale consent is expected for two additional residential projects in Yau Tong and Lohas Park for the financial year 2024-2025.

For the year ahead, the group noted lingering challenges such as high interest rates, sustained inflation and geopolitical tensions.

“The cautious spending and investment patterns of consumers and businesses reflect the prevailing economic challenges,” said Robert Ng See Chiong, Sino Land chairman. “In response to these evolving market conditions, it is imperative for companies to respond swiftly to the new operational landscape to stay competitive.”

“The group will stay alert and flexible in the rapidly evolving macroeconomic environment,” Ng added. “The importance of solid fundamentals, pursuing excellence, upholding integrity and sustainability, enhancing productivity and efficiency, coupled with ongoing prudent financial management, will allow us to be in a good position to tackle challenges and capitalise on opportunities that will arise.”

Sino Land proposed a dividend of HK$0.43 per share, with the board of directors giving shareholders the option to receive the final dividend in new shares instead of cash, subject to conditions.

Separately, Sino Hotels, a unit of Sino Group whose portfolio includes City Garden Hotel in Fortress Hill and the Conrad Hong Kong in Admiralty, returned to profit with earnings of HK$64.3 million in the year ending June compared with a net loss of HK$19.5 million for the previous year.

City Garden has a bulk hiring arrangement that allowed it to have 100 per cent occupancy during the financial year. Conrad, which is effectively 80 per cent owned by Sino Group, had an average room occupancy rate of 69.1 per cent, higher than the 50.3 per cent in the comparable period. The Royal Pacific Hotel & Towers also improved its occupancy rate, to 83 per cent from 55 per cent previously.

The hotel unit is proposing a HK$1.5 cents per share dividend, with the board also giving shareholders the option to receive new shares instead of cash.

Tsim Sha Tsui Properties, another listed company under the group, saw its profits fall about 24 per cent from HK$3.28 billion last year to HK$2.50 billion in the latest financial year.