Feb. 28 (Bloomberg) -- Sun Hung Kai Properties Ltd., the world’s biggest developer by value, posted a less-than-estimated drop in underlying profit as rental income partly offset fewer apartment sales after its chairmen were charged with bribery.
Profit excluding changes in property revaluation fell to HK$11.55 billion ($1.5 billion), or HK$4.41 a share, for the six months ended Dec. 31, from HK$11.77 billion, or HK$4.58, a year earlier, the company said in a statement to Hong Kong’s stock exchange today. That compares with the HK$10.5 billion median estimate of four analysts surveyed by Bloomberg News.
The company booked a lower profit from apartment sales even as the city’s home prices rose to a record last year, defying government attempts to cool a market it said is at risk of an asset-price bubble. The case against Thomas and Raymond Kwok, sons of the company’s late co-founder, could have delayed the sales of some of Sun Hung Kai’s projects, said Nicole Wong, an analyst at CLSA Asia-Pacific Markets.
The case “has affected new project launches for a few months,” said Wong. “But they have also only just come off a record high year in home sales. It’d be very hard to match that.”
Rental income at the developer, which owns the International Finance Centre office and mall complex and the International Commerce Centre, Hong Kong’s tallest building, rose 11 percent to HK$5.8 billion, Sun Hung Kai said.
Sun Hung Kai’s shares gained 19 percent last year and were the worst performer in the nine-member Hang Seng Property Index. The stock rose 0.8 percent to HK$120 at close of trading in Hong Kong today, before earnings were announced.
The developer’s shares has risen 8 percent since the Kwok brothers’ March 29 arrest, while the property-gauge gained 25 percent during the same period.
For the fiscal first half, profit from property sales fell to HK$6.4 billion from HK$7.9 billion a year earlier.
The Kwok brothers have a combined net worth of $17 billion, according to data compiled by Bloomberg News. The brothers and two other men are charged with conspiring to provide payments, loans and free use of apartments totaling more than HK$35 million to the city’s former No. 2 official Rafael Hui, according to court documents.
They were first arrested in March last year and will next appear in court on March 8. The brothers have denied any wrongdoing.
The company will pay an interim dividend of 95 Hong Kong cents, same as a year earlier.
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