SINGAPORE - Mainboard-listed property heavyweight CapitaLand on Wednesday reported a 5.8 per cent rise in net profit to $464 million for the second quarter ended June 30, 2015, as better operating earnings were partially offset by an impairment for a development project in China.
Operating profit after tax and minority interests (PATMI) was 87.6 per cent higher at $256.1 million compared to a year ago on gains arising from the change in the use of development properties for sale in China, namely The Paragon (Tower 5 & 6) and Raffles City Changning (Tower 3). These projects are at prime locations in Shanghai and the group has changed its business plans for these projects from strata-sale to leasing as investment properties.
Revenue increased by 17.8 per cent on higher contribution from development projects in China, partially offset by lower revenue from development projects in Singapore and Vietnam. In addition, the group also recorded higher rental revenue from its shopping mall and serviced residence businesses during the quarter.
Collectively, the two core markets of Singapore and China accounted for 79.6 per cent, compared to 72.9 per cent a year ago, of the revenue.
The group's operating PATMI for 1H 2015 of $411.3 million was 40.8 per cent higher than that of the same period last year on account of gain arising from change in use of development properties for sale to investment properties.
Said Mr Lim Ming Yan, president & group CEO: "CapitaLand's well-balanced portfolio of investment properties and residential projects will continue to generate recurring income and trading profits for the group. While CapitaLand remains focused on Singapore and China as core markets, it is exploring opportunities to expand in growth markets such as Vietnam, Indonesia and Malaysia."
He added: "CapitaLand is set to scale up with a target of six new funds up to $10 billion in assets by 2020. The first, a joint venture between our wholly owned serviced residence
business unit, The Ascott Limited (Ascott), and Qatar Investment Authority, is a serviced residence fund with an equity commitment of US$600 million (approximately S$809 million). This is part of our plan to grow our assets under management through funds, joint ventures and listed real estate investment trusts (Reits)."