SINGAPORE - One of Singapore's biggest developers, CapitaLand, posted a 39.5 per cent fall in fourth-quarter net profit, hit by the absence of gains recorded last year from the sale of an office tower and the higher cost of sales.
Net income for the three months to Dec 31 came in at S$247.7 million compared to S$409.4 million for the year-ago quarter.
For the full year, earnings declined 8.2 per cent to S$1.1 billion from S$1.16 billion for 2014.
Revenue rose 14.6 per cent to S$1.74 billion during the quarter on higher contribution from development projects in China as well as higher rental revenue from the serviced residence business. But this was offset by cost of sales swelling by 25.9 per cent to S$1.36 billion on higher project costs.
CapitaLand also increased its provision for foreseeable losses to S$105.1 million, from S$91.8 million for the year-ago quarter, mainly for residential projects in Singapore where market conditions because of the impact of property cooling measures and concerns over interest rate hikes.
The bottomline was also hurt by the absence of a S$212.5 million gain recognised in the corresponding year-ago quarter for the completion of CapitaGreen office tower.
A final dividend of nine Singapore cents per share was declared.
Looking ahead in Singapore, CapitaLand said it expects the impact of property cooling measures to continue to weigh on the market.
It said its The Cairnhill Road project, The Nassim and the Victoria Park Villas will be ready for launch in the first half of this year.
For the office sector, it expects occupancy and rentals to remain subdued.
The Group said it remains focused on Singapore and China as core markets, while it continues to expand in growth markets such as Vietnam and Indonesia. Residential sales in China are forecast to remain steady,
CapitaLand also said it will continue to grow its serviced residence arm, Ascott, into a global business. Ascott will continue to grow its fee-based income through securing more management contracts as part of its strategy to scale up its global network in key gateway cities, said the company.