SINGAPORE (Aug 3): CapitaLand, Singapore’s biggest developer, has reported a near doubling of 2Q17 earnings to $579.3 million from $294 million a year ago.
CapitaLand says the bottomline was lifted by better operating performance, higher revaluation gains from investment properties in Singapore and China, as well as higher portfolio gains arising mainly from the divestments of Innov Tower in China and 18 rental housing properties in Japan.
Revenue in 2Q17 fell 12.3% to $992.4 million mainly due to lower contribution from development projects in Singapore. This was partially mitigated by higher contribution from development projects in China and higher rental income from newly acquired and opened properties. The development projects that contributed to the revenue this quarter included Victoria Park Villas in Singapore as well as Beaufort in Beijing and Summit Era in Ningbo, China.
However, cost of sales narrowed to $615.7 million from $828 million while other operating income nearly doubled to $369.4 million from $188.2 million. Share of results of associates and joint ventures net of tax also rose 71.4% to $339.5 million.
As a result, profit for the period doubled to $810.9 million from $395.3 million a year ago.
Lim Ming Yan, President & Group CEO of CapitaLand, says: “CapitaLand has achieved another quarter of strong growth. Our PATMI for 2Q 2017 increased 97% to $579.3 million compared to 2Q 2016. Total PATMI at the half-year mark stands at $966.1 million. The quality of the Group’s earnings has also improved with profits from business operations higher than the same period last year, attributable to steady recurring income from our investment properties and management contracts, and realised gains from our trading properties which include residential and office strata sales. Our earnings per share almost doubled for both 2Q 2017 and 1H 2017 compared to the same periods a year ago.”
Year to date, the group has divested $2.37 billion worth of assets and deployed $2.04 billion to higher yielding ventures across various asset types and geographies.
In 2Q17, the retail components of three Raffles City developments in Shenzhen, Changning District in Shanghai and Hangzhou, together with the CapitaMall Westgate integrated development, started operations. Since embarking on the group’s mall network expansion strategy in August 2016, CapitaLand has secured six management contracts in Singapore and China to date, growing the portfolio by close to 300,000 sqm within a year.
Year to date, the group’s serviced residence arm, The Ascott Limited, has added 35 properties to its portfolio through investments, management contracts and franchise agreements, including its first two franchise properties in Brazil, its first Citadines property in the US, and its first three lyf properties in Singapore and China.
Shares in CapitaLand closed 1 cent higher at $3.76.
