STRONG gains from sales in Singapore, China and Vietnam helped to make the third quarter more cheerful for CapitaLand, but its results were still down substantially from a year ago.
The property giant said in a results statement that ‘while business conditions are improving’, it remains vigilant.
‘Operating results will be underpinned by the recognition of profits from residential sales in Singapore and China, and ongoing income contributions from Raffles City Beijing and Ion Orchard,’ it added.
The firm reported net profit of $281.3 million for the three months to Sept 30 – better than the numbers from earlier in the year but down 33 per cent on the $419.4 million earnings last year, when it benefited from large divestment gains.
Revenue rose 75 per cent to $1.05 billion on sales of development projects in Singapore, China and Vietnam.
Sales of Singapore development projects accounted for a rise of $354.4 million in the third quarter, largely from recognition of revenue from The Seafront on Meyer and Latitude. Sales from China rose by $154.3 million.
For the first nine months of the year, net profit reached only $167.2 million, down from $1.18 billion in the same period a year ago. The fall mainly resulted from lower divestment gains, net fair value loss from the revaluation of investment properties and impairment of assets. It posted a second-quarter net loss of $156.9 million, its first red ink in six years.
However, revenue for the nine months climbed 3.7 per cent to $2.12 billion.
Revenue from overseas operations contributed nearly 64 per cent of the total – with China and Australia being the main contributors – down slightly from nearly 70 per cent in the same period a year ago.
Vietnam’s contribution, while small, is growing. For instance, all 330 phase one units of its Hanoi residential project Mulberry Lane were booked within two days of its soft launch this month.
The rest of the units in the 1,500-unit project will be launched early next year.
CapitaLand president and chief executive Liew Mun Leong said yesterday: ‘Our next phase of growth is multi-pronged, both in sectors and geographically.’
The company will continue to focus on organic growth in its core markets of China, Singapore, Australia and Vietnam, as well as its serviced residence business, which saw improved rents after a year of decline.
Its newest residential project here, the 1,040- unit The Interlace, had a fairly buoyant phase one launch and the next project, on the former Char Yong Gardens site, could be pushed out this quarter.
CapitaLand’s target over the next three to five years is to grow Vietnam’s business to account for 5 per cent to 10 per cent of the group’s total assets, up from 1 per cent now. It also wants China to account for 40 per cent to 45 per cent of group assets, up from 28 per cent.
Earnings per share totalled 6.6 cents, down from a restated 12.3 cents a year ago, while net asset value per share was at $2.96, down from $3.78 at the end of last year. The group will seek shareholder approval at an extraordinary general meeting on Friday for a proposal to list CapitaMalls Asia. Its shares lost 13 cents to $4.30 yesterday.
THE WAY FORWARD
‘Our next phase of growth is multi-pronged, both in sectors and geographically.’ – CapitaLand president and chief executive Liew Mun Leong
Source : Straits Times – 28 Oct 2009
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