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New World Underlying Profit Falls on Hong Kong Home Sales, Rents

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Sept. 29 (Bloomberg) -- New World Development Co., the Hong Kong developer controlled by billionaire Cheng Yu-tung, posted a 23 percent decline in full-year underlying profit after booking lower earnings from home sales and commercial rents in the city.

Profit excluding property revaluations fell to HK$4.67 billion ($599 million) for the 12 months ended June 30 from HK$6.08 billion a year earlier, New World said in a statement today. That missed the HK$5.08 billion average estimate of seven analysts surveyed by Bloomberg. Sales rose to HK$32.9 billion from HK$30.2 billion.

Growth in Hong Kong home prices has slowed since the second quarter on rising mortgage rates and as the government stepped up measures to curb real estate values that have surged more than 70 percent since early 2009. New World’s rental revenue was also hurt by the closure of its New World Centre in the Tsim Sha Tsui district for redevelopment.

Profit from property sales fell to HK$3.5 billion from HK$6.06 billion a year earlier, as the group sold units at projects including Emerald Green and Belcher’s Hill, it said.

New World said gross rental income in Hong Kong declined 5 percent to HK$1.14 billion

The stock has fallen 49 percent this year, compared with the 22 percent declined in the benchmark Hang Seng Index. The shares fell 1.8 percent to HK$7.45 in Hong Kong yesterday. The Hong Kong stock market was closed today as Typhoon Nesat swept gale-force winds and rain into the city.

The builder also invests in roads, power generation, transportation, telecommunications and retailing. Chairman Cheng is Hong Kong’s fourth-richest person, according to Forbes Magazine rankings, with an estimated wealth of $9 billion.

The company will pay a final dividend of 28 Hong Kong cents a share, unchanged from a year earlier.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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