SINGAPORE - Property heavyweight City Developments Ltd (CDL) reported on Thursday that its net profit for the second quarter to June 30 dipped 3.2 per cent to $133.5 million despite strong prevailing headwinds.
Revenue fell by 4.2 per cent to $824.9 million. Earnings per share eased 3.4 per cent to 14 cents from 14.5 cents a year ago.
The group posted an increase of 2.8 pr cent in revenue to $1.64 billion for the first half-year, largely due to revenue generated from Millennium & Copthorne Hotels plc (M&C)'s hotels acquired in 2014, and improved performance from M&C's refurbished hotels. However, this increase was partially offset by lower contribution from the property development segment, said CDL.
Without factoring revaluation surpluses in investment properties, the group's net gearing ratio as at end-June was 28 per cent, with interest cover at 10.5 times. Balance sheet remained strong with over $3.7 billion of cash and cash equivalents said CDL.
Looking ahead, executive chairman Kwek Leng Beng said the operating environment in Singapore was expected to stay challenging in the near term, while the global outlook remained uncertain.
"With our strong balance sheet, we have the financial prowess and agility to capture opportunities in a timely manner, while maintaining firm discipline in our investment strategy for Singapore and abroad," he said.
Mr Kwek said CDL's diversification strategy was poised to gather momentum and prominence in the next few years.
"CDL is actively pursuing our unlisted funds management business, though we are deliberately adopting a highly selective approach to nurture this new platform, which will take time to develop."
"The real estate development platforms that we have established in new markets are swiftly taking shape. In the rest of the year, we plan to launch some of our residential projects in UK and China progressively."
The board has declared a special interim dividend of 4.0 cents per share