CDL's Q1 net profit falls 12% to $137.6m

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http://www.straitstimes.com/archive/...1376m-20130514

CDL's Q1 net profit falls 12% to $137.6m

Published on May 14, 2013


LOWER revenue from its property development segment sent first-quarter net profit at City Developments (CDL) down 12.2 per cent to $137.6 million from the preceding year.

Revenue for the three months to March 31 fell 9.8 per cent to $763.5 million year-on-year, the property giant said yesterday.

CDL said property development revenue fell because it sold a Tagore Avenue warehouse which had contributed to turnover in the first quarter of 2012.

Earnings from hotel operations also fell in the first quarter, which CDL put down to factors such as Korean geopolitical tensions, weather woes in Europe and the United States, and a slowing economy in Singapore. It owns 55 per cent of the Millennium and Copthorne Hotels chain.

The group launched two condominium projects during the quarter - the 912-unit D'Nest in Pasir Ris and the 868-unit joint venture Bartley Ridge at Mount Vernon Road.

Over the next few months, it plans to launch the 616-unit Jewel @ Buangkok condominium at Buangkok Drive, a 380-unit executive condominium at Fernvale Link and a mixed development at the junction of Upper Serangoon Road and MacPherson Road near Potong Pasir MRT station, which will have 266 homes and 28 ground-floor retail units.

CDL added that its much-anticipated South Beach development, located between Raffles Hotel and Suntec City and next to the Esplanade MRT station, remains on track for completion in 2015. One part of the project will open in the second half of this year for internal use, it added.

It also said yesterday that it was "in the final stage" of establishing its plans for property development in London and would allocate £250 million (S$476 million) to £300 million for this purpose, in line with its March announcement that it would become more active overseas.

The group's earnings per share stood at 15.1 cents, down 12.2 per cent from the preceding year. Net asset value per share was $8.20 as of March 31, up from $8.03 as of Dec 31.

Its share price rose 10 cents to close at $11.60 yesterday.

MELISSA TAN

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http://www.businesstimes.com.sg/arch...1376m-20130514

Published May 14, 2013

CityDev profit slips 12% in Q1 to $137.6m

Developer planning to launch three projects over next few months

By Felda Chay


PROPERTY developer City Developments' first-quarter net profit fell 12.2 per cent from a year ago to $137.6 million, as a drop in earnings from its hotel operations and other operating income hit its bottomline.

Earnings per share, in turn, was 15.1 cents compared with 17.2 cents last year, when it made a net profit of $156.8 million.

Revenue for the three months ended March 31, 2013, declined 9.8 per cent to $763.5 million from $846.7 million last year, dragged lower by a drop in turnover from its property development segment.

The group said that revenue fell due to the disposal of a warehouse at Tagore Avenue last year. It was also affected by lower contributions from projects such as The Glyndebourne, Volari, NV Residences, Hundred Trees and Tree House.

CDL is planning to launch three projects over the next few months, "subject to market conditions".

One is the 616-unit, 99-year leasehold Jewel @ Buangkok, a condominium located in Buangkok Drive/Sengkang Central.

The second project is a 380-unit executive condominium at Fernvale Link/ Sengkang West Way.

The third is a mixed retail-cum-residential development located at the junction of Upper Serangoon Road and MacPherson Road that will have 266 residential units and 28 retail and F&B units on the ground floor.

In its financial statement yesterday, CDL noted that while investment sentiment in the residential high-end segment remains subdued, buying interest in mass and mid-market projects remains strong due to abundant liquidity in the market supported by the low interest rate environment.

"New and innovative mass and mid-tier market residential projects that are located near MRT stations and shopping amenities should continue to be popular," it said.

Property development accounts for the bulk of the group's revenue and bottomline. In Q1, it made up 48.9 per cent, or $91.3 million, of the group's profit before income tax (PBT) of $186.5 million.

The Q1 PBT from property development rose 3.7 per cent from last year's $88 million, despite a 20 per cent revenue drop to $315 million from $394.2 million. This was due to profit contribution from Bartley Residences, which started in December last year.

CDL's hotel operations, which include London-listed unit Millennium & Copthorne Hotels (M&C), saw a sharp 35.1 per cent drop in PBT to $26.2 million. Revenue fell 3.6 per cent to $341.3 million.

Explaining the fall, CDL said: "The ongoing refurbishment programme resulting in temporary closures of rooms, particularly at Grand Hyatt Taipei and Millennium Minneapolis, regional geo-political tensions in Korea as well as harsh weather conditions in Europe and the United States deterred travellers, impacting hotel performance."

It added that its hotels in Singapore were also hit by the slowing economy, continuing restraint in corporate travel, increased supply of competitor hotel rooms and a reduction in foreign labour quotas which put pressure on costs.

Said CDL: "While the global economic and political environment remains volatile, M&C's strong financial position enables it to overcome the economic headwinds, so that it can act quickly on attractive acquisition opportunities, while remaining focused on maximising the potential of its asset portfolio."

Other operating income fell 30 per cent to $32.1 million, due to "substantially lower" gains on the realisation of a private real estate fund for the quarter.

Net asset value per share as at March 31 was $8.20, compared with $8.03 as at end December.

Yesterday, CDL's shares closed 0.9 per cent higher at $11.60.