CapitaLand’s Q2 profit jumps 17.4% to $399m

Business Times: Fri, Aug 05
HIGHER revenue from development projects in Singapore and China helped CapitaLand to record a 17.4 per cent jump in earnings for the second quarter, compared to a year ago. The property giant said yesterday that net profit for the three months ende…
HIGHER revenue from development projects in Singapore and China helped CapitaLand to record a 17.4 per cent jump in earnings for the second quarter, compared to a year ago.

The property giant said yesterday that net profit for the three months ended June 30, 2011, rose to $399 million from a restated $339.7 million last year. Earnings per share were 9.4 cents, compared with a restated 8 cents last year.

Excluding revaluations and impairments, the jump was even greater at 26.6 per cent to $171.3 million, compared with a restated $135.3 million a year ago.

Revenue was 25 per cent higher at $740.4 million, compared with a restated $592.5 million.

The restatements stem from accounting adjustments that the developer made to comply with an accounting policy that became effective this year.

Yesterday, chief executive Liew Mun Leong said that the group will exceed its initial target for new investments, which it earlier set at between $5 billion and $6 billion for 2011. Already, CapitaLand has committed some $5 billion worth of investments in new projects during the first six months of this year, about 80 per cent of which were made in Singapore, said Mr Liew.

‘That’s because of the opportunity that we saw in Singapore in terms of land site, the one in Marine Point, the one in Jurong and all that,’ he said.

Singapore, together with China and Australia, is home to 80 per cent of the group’s assets. CapitaLand said that it continues to see opportunities in Singapore and China despite the introduction of government measures to cool the residential property market in both countries.

‘To me all those measures which they pulled off are not necessarily bad,’ said Mr Liew. This is because the initiatives can help to keep speculation in check, he added.

CapitaLand will seek acquisitions when price ‘expectations of land prices, or en bloc’ properties, have moderated, he said.

And while the bulk of investments made so far this year has been in Singapore, the group continues to be confident about its prospects in China, said CapitaLand.

‘We are not slowing down in China, but we take more caution to make sure that perhaps we can get better price in China.

‘But we will continue to see investments in China, especially in cities where we already have a dominant presence – Shanghai, Beijing, Guangzhou, Chengdu,’ said Mr Liew. CapitaLand’s China pipeline will see it building 22,000 homes there over the next four to five years.

Revenue from China for the quarter rose 51.2 per cent from a year ago to $174.8 million. Earnings before interest and taxes (Ebit), however, fell by 16.1 per cent to $324.3 million, which the group attributed to lower fair value gains from Raffles City Shenzhen.

The group, which aimed to launch 4,000 apartment units in China this year, has launched 1,700 units in the first half, of which 930 were sold. It hopes to roll out 2,500 more in the next six months of the year.

In Singapore, revenue surged 92.3 per cent to $287.7 million, while ebit jumped 46.5 per cent to $263.1 million. CapitaLand said that it will meet its target to launch 1,700 apartments in Singapore this year, and reiterated that it has a pipeline of 2,700 homes that will be launched here over the next three years. It launched 504 units from January to June this year, of which 271 units were sold.

Yesterday, CapitaLand also said that Ascott, its serviced residences arm, saw a 4.1 per cent drop in revenue for the April-June period to $99.3 million compared with a restated $103.6 million a year ago. This was due to a lower share of contribution from the 28 properties it divested to Ascott Real Estate Investment Trust (Ascott Reit) late last year.

Ebit, however, climbed 74.4 per cent to $70.7 million on higher fair value gains from investment properties held by Ascott Reit and a portfolio gain from the divestment of New Minzhong Leyuan Mall to CapitaRetail China Trust.

Overall, cash and cash equivalents held by CapitaLand at the end of the second quarter stood at $6 billion, compared with $4.9 billion last year. Net asset value per share was $3.29, unchanged from end-December.

Yesterday, CapitaLand’s shares closed flat at $2.80.
Source: Business Times © Singapore Press Holdings Ltd

About Propertyguru Expert

Website contend is hand picked and high demand. Marketing Manager at Huttons Asia Pte Ltd. Indonesian Focusing in Private Residential Singapore. *Service Quality Assured. *Top 300 producer in 2011.