New World Development (00017) Releases Performance Forecast: Core Profit Expected to Reach HK$6.9 billion in FY2024

Zhitong Finance App News, on August 30, New World Development (00017) released a performance forecast. Excluding gains and losses such as one-time sales of investment properties, changes in fair value of investment properties, and provisions for the erosion of marketable assets, it is expected that the basic profit (core profit) of the company's core business will continue to record positive performance in fiscal year 2024.

Affected by factors in the downward cycle of the industry, listed real estate companies generally experienced pressure on their performance in the first half of 2024. The profit performance of many Hong Kong developers, such as Changshi Group, Hang Lung Properties, Swire Properties, and Wharf Land, all showed a decline or loss. Among them, the increase in accrued impairment losses was the main reason.

New World Development's overall profit performance was also disrupted by depreciation. The company said it expects core operating profit from continuing operations to drop by 18%-23% to HK$65-6.9 billion in fiscal year 2024.

However, some industry analysts said that real estate agents accruing impairment provisions based on prudential principles are only an accounting adjustment, not an actual cash outflow from the enterprise, and will not have a direct impact on the company's daily production and operation activities.