It posts 28.4% jump in profit, sells North Bridge Commercial Complex
CITY Developments Ltd (CDL) sold 854 private homes for a total of about $1 billion in the third quarter of this year. As a result, its sales tally for the first nine months of 2009 came to 1,391 units worth about $1.72 billion, a big jump from the 360 units of about $340 million in the same period last year.
Residential projects that contributed to the group’s latest Q3 sales include Volari in the Balmoral area, Hundred Trees in West Coast, Livia in Pasir Ris and The Arte at Thomson.
The property and hotels group posted a net profit of $193.6 million for the third quarter ended Sept 30, 2009, an increase of 28.4 per cent from $150.8 million a year ago. The improvement was due chiefly to its property development business. There was no one-off divestment gain, unlike for Q3 2008 when the sale of Commerce Point was booked.
For the first nine months, CDL’s net earnings slipped 13.3 per cent to $416.75 million.
CDL said that it has agreed this month to sell all its 60 strata subdivided units in the 999-year-leasehold North Bridge Commercial Complex for $46 million. The sale is slated to be completed in March 2010 and profits will be booked in Q1 2010.
On the launch front this quarter, CDL is planning to offer a new 177-unit condo on Thomson Road next to The Arte. The project will comprise one to four-bedroom units, and they will be relatively small at affordable prices, the group said.
CDL generated $852.4 million cash flow from operating activities in the first nine months, a 175 per cent jump from $309.8 million previously. Gearing ratio improved to 42 per cent at end-September, from 48 per cent at end-December last year. CDL pointed out that this was not due to any fund-raising exercise such as rights issues or equity funding. Interest cover also improved to 13 times, compared to 11.7 times previously.
Group revenue increased 36.7 per cent to $940.9 million for Q3, and 5.5 per cent to $2.35 billion for the first nine months.
At Sentosa Cove, the group expects to complete construction of a yet-to-be-launched 228-unit condo on the Quayside Isle Collection plot towards the end of next year. The hotel and commercial components of the site could be completed in second-half 2012.
CDL, which is also a major office landlord, said that the group achieved occupancy of 90.3 per cent for its office portfolio as at end-Q3.
It said that the office market is seeing an increase in leasing activity. ‘Occupiers are, in the meantime, still looking for lower-cost and better-value options, but there are selective companies seeking to expand.’
Looking ahead, CDL said that home buying interest in the next few months is expected to remain relatively stable, though not at the same pace as that experienced in Q2 and Q3 this year. This is on the back of the Monetary Authority of Singapore’s recent statement that it may introduce further measures to cool the property market should there be risk of renewed escalation of speculative momentum.
‘Compared to a year ago, positive property market sentiments are showing signs of recovery,’ CDL said. ‘For the group’s property development segment, it has managed to lock in its profits from presales activities. It also has a wide spectrum of land bank catering to the different needs of the market segment and will be able to extract the appropriate land parcels, at the right time, to seize the opportunities as the market improves.’
The counter ended 12 cents lower at $10.08 yesterday.
Source : Business Times – 13 Nov 2009
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