http://www.businesstimes.com.sg/arch...1828m-20140426

Published April 26, 2014

CapitaLand's Q1 profit down 1.7% at $182.8m

Singapore unit the only one that failed to record higher revenue

By lee meixian

[email protected] @LeeMeixianBT


CAPITALAND yesterday reported a 1.7-per cent drop in first quarter net profit to $182.8 million. Revenue, too, dipped 3.4 per cent to $612.6 million, for the quarter ended March 31.

This was mainly due to a 37.7 per cent drop in revenue from CapitaLand Singapore to $196 million, the only unit that failed to record higher revenue.

"(This was because) sales from Urban Resort Condominium and The Interlace tapered off after obtaining Temporary Occupation Permit in 2013. There was also the absence of rental income from TechnoPark@Chai Chee which was divested in November 2013," it said.

The Singapore subsidiary is the largest contributor to its top and bottom line. CapitaLand's other direct subsidiaries include CapitaLand China, CapitaMalls Asia and The Ascott Limited.

An absence of a one-time portfolio gain of $58.7 million compared with the preceding year also affected its income.

Yesterday, at CapitaLand's annual general meeting, two shareholders who also own shares in CapitaMalls Asia (CMA) asked if CapitaLand can look into offering a higher price for the mall developer. Chairman Ng Kee Choe replied that the company, bound by rules, cannot comment on the offer. He also advised the shareholders to wait for the independent financial adviser report on the privatisation offer.

CapitaLand recently launched a privatisation offer for CMA to streamline the organisation's structure. Market observers are split on whether the offer is fair for CMA shareholders.

The company expects demand and prices for private homes to further moderate for the rest of this year under the effect of the Total Debt Servicing Ratio framework and concerns over interest rate hikes.

"However, the long-term outlook for the residential market remains positive as demand is expected to be supported by governmental policies to promote population and economic growth," it said.

A recent marketing campaign to promote Sky Habitat has helped to sell 106 units (out of the total 509) at a total value of $157.6 million. BT recently reported that units at the condo project were re-launched at lower prices amid mounting pressure from upcoming condo launches.

CapitaLand Singapore's Marine Blue and six new residential projects from Capitaland China are expected to be launch-ready in 2014.

CapitaLand shares ended 3 cents lower at $3.24 yesterday.