CapitaLand reported earnings of $96.6 million for 1H20 ended June, 89% lower than the $875.4 million posted in 1H19.
The lower bottomline for the period translates to earnings per share (EPS) of 1.9 cents compared to the 21 cents a year ago.
Group revenue fell 4.9% y-o-y to $2.03 billion mainly due to rental rebates that amounted to some $158.6 million granted to tenants in Singapore, China, and Malaysia. The decline was also attributable to lower contributions from shopping malls and residential projects in Singapore and China, and the group’s lodging business.
The fall in revenue was slightly mitigated by higher handover of residential units in Vietnam and new contributions from the Ascendas-Singbridge portfolio.
The residential projects which contributed to the revenue in 1H20 were mainly One Pearl Bank in Singapore, The Metropolis, Kunshan, Parc Botanica, Chengdu and Spring, Chongqing in China, as well as Feliz en Vista in Vietnam.
Collectively, the two core markets of Singapore and China accounted for 65.1% of the group’s revenue, compared to the 64.8% posted in 1H19.
For 1H20 earnings before interest and taxes (EBIT) fell 71% y-o-y to $596.8 million, mainly due to fair value losses of investment properties for the period, compared to a gain in 1H19. The decline was also due to lower portfolio gains from asset recycling, as well as lower contributions from its retail and lodging operations.
Cost of sales fell 1.7% y-o-y to $988.6 million in line with the lower revenue reported
Gross profit for 1H20 fell 7.7% y-o-y to $1.04 billion.
Other operating income fell 48.7% y-o-y to $350.1 million due to higher distributions received from an investment in Japan.
As at end June, cash and cash equivalents stood at $6.97 billion, up from the $4.84 billion logged a year ago.
“Despite the impact of Covid-19, CapitaLand still generated net cash of about S$300 million from operating activities in 1H 2020. This resilience is underpinned by our global footprint and diversified portfolio. CapitaLand’s balance sheet remains in a strong position and our long-term growth strategy is intact,” says Lee Chee Koon, group CEO of CapitaLand Group.
“Throughout the COVID-19 crisis, we have remained focused on making CapitaLand into a leading global real estate and asset management company… We are also accelerating our digitalisation process, including bringing more retailers onboard CapitaStar and allowing them to tap the digital platform’s membership base of 1 million and 11 million in Singapore and China respectively,” he adds.
Shares in CapitaLand closed flat at $2.76 on Aug 6.
