WHARF REIC(01997)2022-03-31 08:44Financial Performance - The group's underlying net profit decreased by 13% to HKD 6.5 billion, compared to HKD 7.5 billion in 2020, with the decline rate narrowing from the previous year[9]. - Shareholders' attributable profit was HKD 4.4 billion, reversing a loss of HKD 7.9 billion in 2020[9]. - Revenue for 2021 was HK15,515 million in 2020[12]. - Operating profit decreased by 9% to HK9,973 million in the previous year[12]. - Basic net profit fell by 13% to HK7,477 million in 2020[12]. - Total revenue decreased by 9%, with shopping mall revenue down 11% and office revenue down 5%[33]. - The hotel segment continues to face challenges, with ongoing losses unless repurposed for quarantine use due to the lack of travelers[7]. - The company reported a profit of HKD 4,391 million for the year, compared to a loss of HKD 7,854 million in the previous year, indicating a significant turnaround[186]. Asset Management - The company holds a portfolio of six premium assets in Hong Kong, including Harbour City and Times Square, which are located in popular shopping areas[6]. - The fair value of investment properties was reported at HKD 243.3 billion, resulting in a revaluation loss of HKD 2.203 billion[67]. - Investment property assets totaled HKD 243.3 billion, accounting for 90% of operating assets, with Harbour City valued at HKD 163.2 billion[73]. - The investment properties segment accounts for 90% of the group's total assets, indicating its core business focus[168]. - The company recognized rental income on a straight-line basis over the lease term, including contingent rents based on the sales of certain retail stores[178]. Market Conditions - Retail sales in Hong Kong increased by 8% compared to the low base in 2020, indicating a recovery in local consumption[7]. - The local economy experienced a 6% growth in GDP, with improvements in the job market[7]. - The office rental market is experiencing weak demand and oversupply, leading to necessary rent adjustments, although the group's properties remain well-located[8]. - The ongoing COVID-19 pandemic has created economic pressure on tenants, leading to a decline in rental income and negatively affecting cash flow[168]. Corporate Governance - The company has a strong governance structure with a diverse board of directors and independent non-executive members[3]. - The board consists of ten members, including four executive directors and six independent non-executive directors, promoting a diverse and balanced skill set[91]. - The company adheres to the corporate governance code and has maintained compliance with all relevant rules during the fiscal year ending December 31, 2021[87]. - The board is responsible for the company's business management and strategy oversight, aiming to enhance shareholder value[89]. - The company has adopted a formal Nomination Policy in January 2019 to ensure a balanced skill set and diversity among board members[95]. Sustainability Initiatives - The company is committed to corporate social responsibility, engaging in various community projects and educational initiatives[6]. - The group has raised its first sustainable performance-linked loan totaling HKD 1.6 billion, demonstrating its commitment to sustainable development[10]. - The company aims to reduce carbon emissions by decreasing direct emissions and lowering energy intensity by 2030[60]. - The company promotes a new lifestyle model focused on reducing plastic use, reusing, and recycling to alleviate solid waste issues in Hong Kong[60]. Shareholder Communication - The company values transparent communication with shareholders and aims to create higher value through effective dialogue with stakeholders[125]. - The company has adopted a Shareholder Communication Policy to ensure shareholders have access to unbiased and easily understandable information regarding financial performance and strategic goals[125]. - The company will hold its 2022 Annual General Meeting on May 6, 2022, via a hybrid meeting format to facilitate shareholder participation while ensuring safety during the ongoing pandemic[129]. Employee Engagement - The company employs around 2,900 staff as of December 31, 2021, with compensation based on job responsibilities and market trends, including discretionary annual performance bonuses[85]. - The group has implemented various employee wellness programs and talent development initiatives to enhance professional growth[63]. Risk Management - The group has established a risk management framework to identify and mitigate various operational risks[167]. - The company emphasizes the importance of timely and accurate disclosure of inside information to ensure fair disclosure practices[124]. - The audit committee reviewed the effectiveness of the group's risk management and internal control systems for the fiscal year ending December 31, 2021, covering financial, operational, compliance, and risk management controls[123].