The year 2023 has been “unusually difficult”, said Capitaland Investment’s (CLI) group CEO Lee Chee Koon in a New Year message to staff. Despite working “extremely hard” and remaining clear and focused on the group’s goals, CLI will face asset valuation losses for the FY2023 ended Dec 31, 2023, across the various markets it is operating in.
“Even though these losses may be non-cash in nature, they will still impact CLI’s full year results. This is despite the fact that our underlying operating performance continues to be resilient and our business units continue to position strongly for the future. Our operating profit also remains strong, driven by our fee income, and we are moving in the right direction,” said Lee.
On Dec 8, 2023, CLI announced that it expects fair value losses on its portfolio of investment properties, primarily attributable to the investment properties in China, Australia, Europe, the UK and the US. The fair value losses are non-cash in nature and arose mainly due to higher capitalisation rates and weaker market sentiments, said the group.
As such, CLI expects to report a significant decrease in its total patmi for the FY2023 on a y-o-y basis.
Further to his message, Lee cited several geopolitical and economic headwinds including the ongoing Russia-Ukraine war and the unfolding crisis in the Middle East that will impact on how the group can move and grow.
He adds that he is “of the view that many companies could struggle to navigate a persistently high interest rate environment and a politically divided world.”
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“We must be ready to turn this into our advantage. Already, we are seeing some interesting opportunities emerge which would not have been available when times were good,” he continued. “The key is never to waste a crisis. We will continue to ensure we have the balance sheet and stand ready to make bold moves to bring a step change to our businesses. We will focus on meeting the needs of our customers and in so doing, we will build a base of recurring fee income and strong enterprise value in line with our vision to be the preferred global real asset manager creating positive sustainable impact.”
That said, Lee says he remains optimistic about the future, as he sees “exciting opportunities for growth in all our business verticals” especially in Asia Pacific.
Shares in CLI closed at $3.16 on Dec 29, 2023.
