CityDev Q2 net profit up 95%

Singapore
August 14, 2006, 6.22 pm (Singapore time)

CityDev Q2 net profit up 95%


SINGAPORE - City Developments Ltd (CityDev), Southeast Asia's second-largest developer, posted a 95 per cent rise in quarterly net profit on stronger Singapore home sales and global hotel earnings.

The firm, controlled by Singapore tycoon Kwek Leng Beng, earned $44.9 million (US$28.4 million) in the April-June quarter, up from a restated $23 million a year earlier. CityDev's luxury residential projects in Singapore have seen strong sales, with interest spurred by the government's move last year to ease rules on foreign property ownership and financing.

Earlier this month, the group's 52.6 per cent-owned global hotel chain Millennium & Copthorne Hotels Plc reported a 36 per cent increase in first-half underlying profit.

Last month, CityDev spun off some of its hotel assets into property and business trust, CDL Hospital Trusts. -- REUTERS

Singapore
August 14, 2006, 7.32 pm (Singapore time)

Hong Leong reports 17% rise in Q2 profit


HONG Leong Finance fared better in the second quarter of this year compared to the same period a year ago.

The finance company turned in a net profit after tax of $22.3 million this year - a 17-per-cent improvement from the $19.0 million it recorded last year.

It declared an interim dividend of six cents per share, similar to the interim dividend declared last year. -- BT

Singapore Companies
Published August 15, 2006


CDL Q2 gain almost doubles to $44.9m
It says its Jan-Aug 2006 residential sales have already topped 2005 figure


By KALPANA RASHIWALA



PROPERTY giant City Developments yesterday posted a near doubling of second-quarter net profit to $44.9 million from $23 million due partly to profit booking from The Sail @ Marina Bay condo and City Square Residences along Kitchener Road.


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Upmarket: CDL is expected to book in Q3 its first profits from St Regis Residences


The group expects to release at least two new residential projects in the second half of this year - One Shenton (351 units) on Shenton Way and The Pharos @ Waterfront, a 175-unit condo next to Grand Copthorne Waterfront hotel. Another possible launch is Ferraria Park, a 472-unit freehold condo to be developed jointly with Hong Leong Holdings.

CDL said it has a landbank which can be developed into nearly 9 million sq ft potential gross floor area. Of this, about 70 per cent is for residential use, which could last the group about five years.

Assuming an average unit size of 1,500 sq ft, CDL's residential landbank can generate about 4,100 new homes.

About 60 per cent of CDL's residential landbank is in mass market or mid-market districts.

CDL yesterday said it had sold $1.7 billion worth of residential properties between the start of the year and Aug 10, better than the figure for the whole of last year, which was $1.65 billion. So far this year, the group has sold a total of 714 homes - 386 in the first half, followed by 328 between July 1 and Aug 10.

CDL executive chairman Kwek Leng Beng yesterday reiterated that the group is considering all options for its office portfolio. He said it was not the right time for the group to divest its offices or spin off a real estate investment trust at a time when office rents and values are rising.

BT reported early last month that a fund of Macquarie Global Property Advisors (MGPA) was in talks with CDL to buy a mixed bag of 11 properties including offices that CDL failed to sell to Suntec Reit last year.

At yesterday's results briefing, CDL managing director Kwek Leng Joo revealed, for the first time since BT published the story, that the group had received a 'very concrete offer' for the portfolio originally intended to be sold to Suntec Reit one or two months ago. The price was more than $200 million above the $788 million that Suntec Reit had offered.

'The board considered it, but decided not to accept the offer. If the office property segment continues to recover, values and prices should grow further. We'll probably be better off if we try to dispose of the properties at a slightly later date,' Kwek Leng Joo said, without identifying the party that made the recent offer.

For the three months ended June 30, 2005, CDL's revenue rose 2.9 per cent to $601.9 million - much smaller than the 95.3 per cent jump in net profit to $44.9 million. 'In accordance to the group's policy of equity accounting for the results of its jointly-controlled entities, whilst revenue from The Sail @ Marina Bay, Parc Emily and Edelweiss Park has not been consolidated into the group's total revenue, the group's share of profits arising from these joint-venture developments has been included in pretax profit,' CDL said in its results statement.

The strong Q2 performance boosted CDL's first-half net profit by 36.1 per cent to $86.1 million.

CDL's Q2 and H1 bottom-lines were arrived at after deducting $39.6 million and $81.1 million respectively in depreciation/amortisation charges.

The group is expected to book in Q3 the maiden profits from the sale of units in the upmarket St Regis Residences and divestment gains from the sale of four hotels to CDL Hospitality Trusts, which was listed on the Singapore Exchange last month.

About 80 of the 100 units released at St Regis Residences have already been sold, some at prices of more than $3,000 psf. CDL said yesterday it may release more units in the 173-unit condo for sale later, or defer the release until nearer the project's completion. And in view of the impending shortage of hotel rooms, the group may retain some units in the condo to be managed by the 299-room St Regis Hotel next door which is expected to be completed by end-2007.

Asked about how CDL will benefit from its close relationship with Las Vegas Sands, which has been awarded the Marina Bay Integrated Resort, Kwek Leng Beng said: 'They're talking to (sister company) Hong Leong Asia about buying building materials.'