CapitaLand’s Q4 net profit soars 71% to $475.7m

Romesh Navaratnarajah21 Feb 2019

CapitaLand logo

The developer attributed the increase in net profit to “better operating performance, as well as higher gains from asset recycling and revaluation of investment properties”. However, the company does not expect home prices to rebound quickly after new property cooling measures were introduced in July.

Singapore’s largest developer CapitaLand saw its net profit jump 71 percent year-on-year to $475.7 million during the fourth quarter of 2018, while revenue rose 34 percent year-on-year to $1.62 billion.

The developer attributed the increase in net profit to “better operating performance, as well as higher gains from asset recycling and revaluation of investment properties”.

For the whole of 2018, revenue and net profit climbed 21 percent and 12.3 percent to $5.6 billion and $1.8 billion respectively.

“CapitaLand has achieved good results amidst a challenging economic and market environment. This achievement is due primarily to our diversified asset base, disciplined approach in asset recycling and capital allocation, and strong operating expertise,” said CapitaLand’s chairman Ng Kee Choe.

Speaking in a Bloomberg interview, CapitaLand’s chief financial officer Andrew Lim said the company does not expect home prices in Singapore to stage a rapid rebound after the government introduced new property cooling measures in July.

“We agree with the main view on the street which is that we don’t expect a big bump up anytime soon,” he said.

“If we see a five percent increase in home prices I think that will be a pretty good year for the Singapore residential market,” noted Lim. “The severity and extent of the measures in July caught us by surprise.”

Meanwhile, City Developments Limited (CDL) saw net profit for the fourth quarter of 2018 drop 54.7 percent to $77.9 million from $171.9 million over the same period in 2017. Revenue also fell 40.6 percent to $788.3 million from $1.3 billion in Q4 2017.

It noted that the higher revenue and net profit for Q4 2017 “were boosted by the full recognition of revenue and profit from The Brownstone EC, which obtained its Temporary Occupation Permit in October 2017 and a gain from the partial divestment of the Group’s interest in two Chongqing projects”.

“Excluding $94.1 million of impairment losses for hotels and $20.1 million of allowance for foreseeable losses for two small-scale development projects in central London which potentially may be leased out, as well as a gain from the partial divestment of the group’s interest in two Chongqing projects in 2017”, net profit for Q4 2018 had in fact expanded by 17 percent.

For the whole of 2018, CDL’s revenue and net profit rose 10.3 percent and 6.7 percent to $4.2 billion and $557.3 million respectively.

Home buyers looking for Singapore Properties may like to visit our ListingsProject Reviews and Guides.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

POST COMMENT

You may also like these articles

Capitaland’s earnings forecasted to rise by 19% in 2018-2020

La Botanica in Xi’an is one of CapitaLand's latest residential developments in China. (Photo: CapitaLand)UOB KayHian analysts expect Capitaland’s net profit to grow by about 19 percent in 2018 to

Continue Reading6 Dec 2018

Sales at CDL projects remain healthy: report

CDL recorded healthy sales were despite the new property cooling measures, and CDL’s residual inventory of residential properties reached 292 units in the third quarter of 2018. Artist’s impressio

Continue Reading13 Feb 2019

REDAS calls on government to tweak property cooling measures

REDAS urged the government to review the additional buyer’s stamp duty (ABSD) policy to avoid the ‘land grab’ situation seen in 2017 and 2018. Last year, the government raised the ABSD payable b

Continue Reading20 Feb 2019