Wing Tai warns half-year loss at associate could more than treble to HK$1.4 billion
The group expects to be in the red for FY2024 due to fair value changes and impairments for overseas properties
DEVELOPER Wing Tai Holdings warned on Wednesday (Aug 14) that its Hong Kong associate Wing Tai Properties may report a loss of HK$1.3 billion to HK$1.4 billion (S$215.9 million to S$236.4 million) for the six months to Jun 30, 2024. This would widen the loss of HK$374.2 million that the associate reported in the year-ago period.
Wing Tai Properties said that, on the basis of preliminary findings from its semi-annual independent revaluation, “the aggregate of adverse changes in the fair value of the group’s investment properties and the impairment provision for the group’s properties under development” are estimated to be more than HK$1 billion.
This is much larger than the fair value decline of HK$480 million recorded for the group’s investment properties in the year-ago period. No impairment provision for properties under development were made then.
Changes in fair values and impairment provision are non-cash items, and Wing Tai Properties said that the “overall financial, business and trading positions of the group remain healthy”.
Wing Tai Properties is the developer of various residential and commercial projects in Hong Kong, where property prices have been depressed for some time.
Wing Tai Holdings owns 33 per cent of Wing Tai Properties, based on its latest annual report. On Aug 6, Wing Tai Holdings announced it was likely to report a loss for FY2024 (the company has a June year-end) due to fair value changes and impairments for overseas properties.
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It had reported a profit of S$13.3 million for FY2023, down from S$140.2 million in FY2022.
The group added, however, that its financial position “remains healthy with a low net gearing ratio of approximately 0.07” as at end-June.
Wing Tai Holdings expects to announce its results on Aug 27.
Singapore-listed shares of Wing Tai Holdings closed at S$1.23 on Wednesday, down 1.6 per cent, ahead of the announcement.
Wing Tai Properties, listed in Hong Kong, closed unchanged for the day at HK$1.85.
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