CMA's Q1 profit falls 24%

CapitaMalls Asia (CMA), a wholly-owned subsidiary of CapitaLand, has posted a 24.2 percent drop in its net profit in the first quarter, down to S$49.1 million from last year’s S$64.8 million.

Its Q1 revenue also slipped 32.8 percent to S$50.2 million, after CMA divested Clarke Quay to CapitaMall Trust and three of its malls in Malaysia to CapitaMalls Malaysia Trust.

CMA’s earnings before interest and tax (EBIT) also saw a 20.5 percent decline year-on-year to S$64.8 million. This was largely due to the loss of contributions from the assets it had sold, which amounted to S$3.1 million from Clarke Quay and S$11.9 million from the three Malaysia malls.

In contrast, the Orchard belt rallied by offsetting the lower earnings through strong revenue contributions from the sale of units at The Orchard Residences, as well as a better performance by ION Orchard.

“Retail sales are expected to remain robust in our key markets. Singapore is projecting a record 12 million to 13 million visitor arrivals and between S$22 billion and S$24 billion in tourism receipts this year,” said Liew Mun Leong, Chairman of CMA.

“In China, total retail sales increased 15.8 percent to reach 2.9 trillion yuan (S$551 billion) in the first two months of this year, compared to the same period last year. And in Malaysia, retail sales are targeted to grow 8.3 percent a year from 2011 to 2015,” Mr. Liew noted.

This bodes well for the completion of three acquisitions in Malaysia and China, as well as the opening of two malls in Shanghai, one of which has already secured 95 percent in committed leases while the other has committed leases of 75 percent.

“Our current 38 operational China malls account for only 38 percent of our net asset value in the country, with a return on equity (ROE) of seven percent,” said Lim Beng Chee, Chief Executive of CMA.

“While we ramp up the opening of our China malls over the next few years, our performance will continue to be underpinned by our Singapore and Malaysia malls, which gave us ROE of 17 percent and 16 percent respectively for 2010. As our newly opened China malls stabilise and other malls are opened, we expect the ROE of our China portfolio to increase going forward.”