Real estate operator City Developments (CDL) is expecting a net loss of up to $35 million for 1HFY21, a reversal from the $3.1 million net profit logged the year before, the company said in a profit guidance on Aug 6.
CDL has also penciled a 25% to 30% drop in its pre-tax profit from the $13.8 million posted in 1HFY20, due to higher net financing costs, foreign exchange losses and lower divestment gains.
1HFY20 also saw the recognition of $17.6 million in deferred tax credits, which was part of the New Zealand government’s Covid-19 business continuity package.
The rise in net financing costs is largely due to the absence of interest income from loans extended to and bonds issued by Sincere Property Group, which CDL had substantially impaired last year.
Its exposure to Sincere Property Group was $117 million as at June 30.
Meanwhile, CDL’s hotel portfolio - which includes wholly-owned Millennium & Copthorne Hotels - is expected to register an operational loss, no thanks to the periodic lockdowns in numerous cities.
CDL's investment properties were similarly hit by lower footfall and sustained rental rebates given to its retail tenants. The company cited Jungceylon mall in Phuket as an affected property due to the shuttering of borders to international travellers.
“CDL wishes to emphasise that the overall business and financial position of the group remains healthy, with sufficient liquidity to meet its operational and financial commitments. It will continue to maintain a high level of business and financial discipline," the company said.
As at June 30, the group had cash and undrawn committed bank facilities of about $4.4 billion.
Shares of CDL closed flat at $6.76, before its announcement on Aug 6.
Photo: CDLHT
