SINGAPORE (Nov 5): CapitaLand has registered a 7.8% drop in earnings to $333.9 million for the 3Q19 ended September, falling from $362.2 million a year ago.
On a fully diluted basis, this translated to earnings per share (EPS) of 6.4 cents for 3Q19, compared to EPS of 8.1 cents in 3Q18.
The decline was largely attributed to lower portfolio gains recorded during the quarter, due to the absence of a one-time gain of $99.2 million from the divestment of Westgate in August 2018.
In addition, the group’s bottom-line was hit by a surge in taxation expenses, which more than trebled during the quarter to $311.0 million, compared to $94.7 million a year ago.
The jump was mainly due to higher taxable income and land appreciation tax in China, as a result of higher handover of units for its residential projects.
Operating PATMI grew 18.8% to $277.6 million in 3Q19, driven by maiden contribution from Ascendas-Singbridge, higher contributions from development projects in China, and fee income from Vietnam.
3Q19 revenue rose 37.1% to $1.73 billion, from $1.26 billion a year ago, mainly due to higher contributions from development projects in China and contributions from Ascendas-Singbridge and the group’s multifamily portfolio in USA.
As at end-September, cash and cash equivalents stood at $5.67 billion.
“The first full quarter contribution from Ascendas-Singbridge has provided an immediate uplift to the quality of CapitaLand’s earnings,” says Lee Chee Koon, group CEO of CapitaLand Group. “Fee income from the group’s REITs and funds grew by more than 30% year-on-year in 3Q19, tracking the increase in our REIT and fund assets under management. The strengthened recurring income will provide us with greater stability as we continue to drive growth for the group.”
“Active and disciplined asset recycling remain an important part of CapitaLand’s strategy to enhance returns and rejuvenate our portfolio for sustainable growth. Year to date, we have divested more than $5.2 billion worth of assets and released $2.4 billion of net capital back to the Group. This will enhance our financial flexibility to seize potential opportunities ahead,” he adds.
As a whole, the group reports that it will continue to focus on its core markets of Singapore and China, on the back of its robust retail portfolio in both markets, with healthy occupancy levels above 96% as at Sept 30, 2019. In China, the group also successfully opened the retail component of Raffles City Chongqing, registering over 900,000 visitors during its opening weekend.
CapitaLand also reported that the development of 79 Robinson Road and CapitaSpring is on track for completion in 2020 and 2021 respectively; and both buildings have each secured healthy office leasing pre-commitments to date of about 30%.
On the residential front, One Pearl Bank in Singapore has sold 235 of the 280 launched units to date. On Nov 2, the group also launched Sengkang Grand Residences in Singapore, selling 216 of the 280 available units during the first weekend.
In China, the group sold 3,694 units in the first nine months of 2019 with a value of RMB8.5 billion, and expects to launch an estimated further 1,700 units in 4Q 2019. As at end-September, the group had sold but not yet handed over approximately 6,500 units with a value of RMB16.1 billion.
In its new key market of India, the group aims to ramp up the current 17.4 million sqft of commercial space comprising business and IT parks, industrial and logistics properties to 40 million sqft by 2024. This will correspond to about $7 billion of assets under management in India, more than double the current value.
As at 2.49pm, shares in CapitaLand are trading 1 cent lower at $3.68.
