New | Soho China core profit drops 60p to 1.78b yuan
Soho China's transition from developer to landlord is weighing on its earnings, with the company yesterday reporting a 60 per cent drop in core profit to 1.78 billion yuan (HK$2.24 billion) for last year.
Soho China's transition from developer to landlord is weighing on its earnings, with the company yesterday reporting a 60 per cent drop in core profit to 1.78 billion yuan (HK$2.24 billion) for last year.
Net profit, including net valuation gains on investment properties, was about 4.08 billion yuan for the 12 months to December, a decline of about 45 per cent year on year, the mainland's largest developer of prime office space said yesterday.
Turnover fell 58 per cent to 6.1 billion yuan. Its core net profit margin last year was about 29 per cent, against 30 per cent in 2013.
The company attributed the worse-than-expected earnings slump to a change in the business model from build-to-sell to build-and-hold. The consensus estimate from analysts for core profit was for a 50 per cent decline to 2.15 billion yuan.
Soho China reported rental income of about 424 million yuan last year, a rise of about 52 per cent from the previous year.
That was driven mainly by higher average occupancy rates at its Qianmen Avenue project in Beijing and Soho Century Plaza in Shanghai and the contributions from the newly completed Wangjing Soho Tower 3 in Beijing, and Soho Fuxing Plaza and Sky Soho in Shanghai.
