CapitaLand Q2 profit jumps 97%, boosted by divestments, revaluation gains

Capitaland's profit jump was due to higher contribution from development projects in China and higher rental income from newly acquired and opened properties.
Capitaland's profit jump was due to higher contribution from development projects in China and higher rental income from newly acquired and opened properties. PHOTO: CAPITALAND

SINGAPORE - Developer CapitaLand saw a 97 per cent jump in second quarter net profit to S$579.3 million from S$294 million in the year-ago period on the back of divestments and revaluation gains.

Revenue for the three months to end-June dropped 12.3 per cent to S$992.4 million, mainly due to lower contribution from development projects in Singapore, partially mitigated by higher contribution from development projects in China and higher rental income from newly acquired and opened properties.

The development projects that contributed to the revenue in the quarter include Victoria Park Villas in Singapore as well as Beaufort in Beijing and Summit Era in Ningbo, China, CapitaLand said in a pre-market filing on Thursday (Aug 3).

Portfolio gains for the second quarter came to S$123.1 million, mainly from the divestments of Innov Tower in China and 18 rental housing properties in Japan (Zenith Residences). This compares to portfolio gains of S$19.3 million for the same period last year.

CapitaLand also recorded a net fair value gain of S$422.9 million in the second quarter, compared to S$199.7 million for the year-ago period. The gain comprised S$176.4 million from subsidiary projects, recognised in other operating income, and S$246.5 million from share of results of associates and joint ventures. The higher revaluation gain arose mainly from revaluations of its properties in Singapore and China.

 

Operating profit for the quarter increased by 20.5 per cent to S$206.8 million, mainly due to higher contributions from development projects in China and newly acquired properties in Japan and the US.

 

For the half year, CapitaLand net profit grew 88.6 per cent to S$966.1 million despite a 6.7 per cent drop in revenue to S$1.89 billion.

Looking ahead for the Singapore market, CapitaLand said it expects the property cooling measures to continue to weigh on the residential market. Nonetheless, the group will continue to source for well-located sites to build its residential pipeline, it said.

In China, CapitaLand said it will focus on ensuring the smooth opening of new malls and improving its existing malls' performance. It will also continue to look for new acquisitions and management contracts.