CapitaLand Q1 profit down 19% on absence of one-time gain

Tue, May 01, 2018

Andrea Soh


EARNINGS for CapitaLand, one of the largest real estate companies in Asia, fell in the first quarter despite a rise in revenue, due to the absence of a one-time gain.

Net profit for the three months ended March 31 fell 18.8 per cent to S$319.09 million.

Excluding the gain from the sale of The Nassim in the first quarter of last year, operating net profit would have increased by 25 per cent to S$228.7 million on the back of higher development profits in Singapore and higher rental income from malls and offices in China and Japan, said CapitaLand.

The group's revenue expanded 53.3 per cent to S$1.38 billion, thanks to higher contributions from development projects in Singapore and China, rental revenue from newly acquired and opened properties, as well as the consolidation of revenue from CapitaLand Mall Trust (CMT), CapitaLand Retail China Trust (CRCT) and RCS Trust (RCST).

CapitaLand president and group chief executive Lim Ming Yan said the group is on track to achieve its annual S$3 billion capital recycling target while it explores investment opportunities across asset classes.

The firm continued to optimise its portfolio by divesting 20 retail assets in China in the first quarter, he said in a statement. It then proposed to acquire Pearl Bank Apartments in Singapore, and a site for its first integrated development in Vietnam.

"We also successfully set up our second commercial fund in the country, the US$130 million CapitaLand

Vietnam Commercial Value-Added Fund, as part of growing our fee-based business," he said.

CapitaLand expects the Singapore residential property market sentiment to improve further this year, underpinned by overall positive economic performance and higher transaction volumes.

"We expect overall sales of new homes to improve with developers launching more projects in 2018."

It is "cautiously optimistic" on the China residential property market, where property cooling measures by the government in Tier 1 and 2 cities are expected to restrict growth in home prices. CapitaLand has over 8,000 units valued at 15.1 billion yuan, which had been sold but not yet handed over as at March 31. It also expects to have 5,000 launch-ready units for the remainder of 2018.

Shares in CapitaLand rose one Singapore cent, or 0.3 per cent, to S$3.76 before the results announcement.