Wing Tai Properties may see FY2022 loss on adverse change in fair value of JV properties

WING Tai Holdings’ Hong Kong-based associate company, Wing Tai Properties, has issued a profit warning, stating that the group may report a loss for the financial year ended Dec 31, 2022.

This is despite the company making HK$854.4 million (S$146.7 million) in profit in the previous FY.

This comes as the group’s share of results of joint ventures may be a loss of about HK$50 million for the financial year, versus a profit of HK$242.9 million in FY2021.

In a bourse filing on Tuesday (Mar 14), Wing Tai Properties attributed the expected loss to an adverse change in the fair value of the investment properties of the joint ventures.

It added that preliminary findings from the independent revaluation indicated that the total adverse change in the fair value of the investment properties may be more than double the amount of HK$527.4 million previously reported for FY2021.

Meanwhile, the group noted that FY2021’s profits included a one-off valuation gain of HK$472.2 million on units distributed in specie by a joint venture to it. 

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Exclusive of this one-off gain, the group’s profit attributable to shareholders of the company amounted to HK$382.2 million in that year, it declared.

That said, Wing Tai Properties said a change in the value of investment properties is non-cash in nature and will not have an impact on the operating cash flow of the group. 

“The overall financial, business and trading positions of the Group remain healthy,” it said.

Wing Tai Properties is expected to announce its audited results around Mar 23.

On Tuesday, shares of Hong Kong-listed Wing Tai Properties closed 0.9 per cent lower at HK$3.51, while Wing Tai Holdings lost 0.7 per cent to end at S$1.47.