CDL sees 13.1% fall in net profit for Q1

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http://www.straitstimes.com/archive/...it-q1-20140515

CDL sees 13.1% fall in net profit for Q1

Drop mainly due to absence of gains made in same period last year

Published on May 15, 2014 1:14 AM

By Rachael Boon


PROPERTY giant City Developments (CDL) suffered a decline in first-quarter earnings, but the main reason was the absence of gains made in the same period last year.

Net profit fell 13.1 per cent to $119.7 million for the three months to March 31, while revenue dipped 5.4 per cent to $734.2 million year-on-year.

The one-off gains in the first quarter last year were from the disposal of strata units in Elite Industrial Building I, Elite Industrial Building II and Citimac Industrial Complex. If these gains were excluded, first-quarter net profit would have grown by 4 per cent.

The firm, whose executive chairman is Kwek Leng Beng, noted that it had adopted a revised financial reporting standard that became effective on Jan 1 this year.

The property development segment was the top contributor, which the firm said remained "relatively on a par with the corresponding period of last year, despite achieving lower revenue".

Profit from joint venture projects such as the 868-unit Bartley Ridge, the 396-unit The Inflora and the 508-unit Echelon contributed to the segment, along with higher contribution from Bartley Residences.

The rental properties segment saw much lower earnings owing to the absence of the gains from the first quarter last year.

The group's office portfolio recorded "healthy occupancy of about 95.8 per cent", compared with the national average of 90 per cent, CDL said.

The South Beach mixed development is progressing in construction, and the firm expects the 654-room South Beach Hotel to open next year.

Revenue contribution from subsidiary Millennium & Copthorne Hotels (M&C) rose when it was translated into the Singapore dollar, due to the strong pound sterling. CDL, which has a 59 per cent interest in M&C, reported a 5.9 per cent rise in revenue. However, the firm noted the pre-tax profit achieved was lower, as social and political uncertainties in parts of Asia affected trading profits.

M&C expects to complete the acquisition of the Novotel Times Square in New York next month and the Boscolo Palace Roma in Rome in the third quarter.

Earnings per share was 13.2 cents for the quarter down from 15.1 cents previously, while net asset value per share was $8.63 as at March 31, up from $8.50 as at Dec 31. CDL shares closed two cents higher at $10.08 yesterday.

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http://www.businesstimes.com.sg/arch...n-131-20140515

Published May 15, 2014

CDL net profit down 13.1%

Group has acquired five prime freehold properties in UK for £152m

By Kalpana Rashiwala

[email protected] @KalpanaBT


CITY Developments Ltd (CDL), which posted a 13.1 per cent drop in net profit to $119.7 million for the first quarter ended March 31, 2014, has acquired five prime freehold properties in the UK for £152 million (S$318.9 million) since September last year.

Besides the £80 million purchase of a multi-storey car park site at 28 Pavillion Road in Knightsbridge, which the group intends to redevelop into a luxury residential project (subject to planning approval), it has picked up investment properties in Croydon and Chelsea in addition to duplex apartments in Belgravia (near Sloane Square).

The group reiterated that it is actively seeking new opportunities in mature markets such as the US, Japan and Australia, whose economies are recovering and whose capital markets' sophistication, transparency and corporate governance are akin to those of Singapore.

For Q1 2014, CDL's group revenue eased 5.4 per cent year-on-year to $734.2 million.

As for the reduced bottom line over the same period, the group said this was chiefly due to gains from disposal of strata units in Elite Industrial Building I, Elite Industrial Building II and Citimac Industrial Complex in Q1 2013. Excluding divestment gains from such non-core investment properties, net profit would have increased by 4 per cent, CDL said.

Pre-tax profits (including share of after-tax contributions of associates and jointly-controlled entities) from property development, the top contributor, rose to $95.2 million in Q1 2014 from $91.3 million in Q1 2013 - despite revenue from this segment sliding to $257.3 million from $315 million.

The strong profit figure was due to maiden profit contribution from joint-venture projects, namely Bartley Ridge, The Inflora and Echelon, as well as higher contribution from Bartley Residences.

Pre-tax profit from rental properties fell to $37.5 million from $55.7 million - due to the absence of the aforesaid divestment gains in the latest reporting period, CDL said.

In the hotel operations segment, revenue contribution from Millennium & Copthorne Hotels plc (M&C) increased when translated into Singapore dollar terms, due to the strength of the pound. Despite the higher hotel revenue, pre-tax profit was lower at $30.6 million compared with $43.8 million previously, due to social and political uncertainties in some parts of Asia which impacted trading profits.

CDL's earnings per share fell to 13.2 cents from 15.1 cents. Net asset value per share rose to $8.63 as at March 31 from $8.50 at end-December last year.

The counter ended two cents higher at $10.80 yesterday. CDL released its results after the stock market closed.

In Singapore, sales at the Coco Palms condo near Pasir Ris MRT Station is expected to begin on Saturday.

The office component of the South Beach development is expected to be completed by end-2014, while the 654-room South Beach Hotel is slated to open next year.

In China, if market conditions are favourable, residential pre-sales in both Eling Residences, in Chongqing, and Suzhou Hong Leong City Center will officially begin in September/ October this year.

As for the Huang Huayuan project, also in Chongqing, due to the deep excavation required and the lofty height of its three buildings, sales will begin next year.

M&C completed the acquisition of a five-star all-suite hotel located within the Chelsea Harbour district in London in March. Plans are in place to reposition the property. M&C is scheduled to complete the acquisition of Novotel Times Square in New York next month. Subject to conditions being met, the acquisition of Boscolo Palace Roma is scheduled for completion in Q3 this year.

In Tokyo, construction of M&C's new hotel in the Ginza district is slated to complete before year-end and the hotel is expected to open in Q1 2015.