CapitaLand's net profit for Q1 rises 35.4% to $218.3m

The Vista Verde in Vietnam. Revenue from corporate and other sources fell 30.7 per cent to $13 million due to fewer units handed over to buyers for projects in Vietnam.
The Vista Verde in Vietnam. Revenue from corporate and other sources fell 30.7 per cent to $13 million due to fewer units handed over to buyers for projects in Vietnam.PHOTO: CAPITALAND

Lift comes from divesting Beijing property but revenue falls 2.3%

Gains from divesting a Beijing property boosted first-quarter earnings at real estate firm CapitaLand.

Net profit rose 35.4 per cent to $218.3 million for the three months to March 31 over the same period a year earlier, but revenue fell by 2.3 per cent to $894.2 million.

The decline in turnover was mainly due to the absence of a fair value gain of $59.6 million from the change of use of Ascott Heng Shan Shanghai in the previous year, and lower revenue recognition from its development projects in Singapore and Vietnam.

Across business units, CapitaLand Singapore posted a 18.2 per cent drop in revenue to $281.3 million. This was due to the absence of contributions from Bedok Residences and lower contributions from Sky Habitat as both projects were completed in the second quarter of last year. There were also lower sales from Urban Resort Condominium and Marine Blue.

The decline was partly mitigated as revenue started to be recognised for Cairnhill Nine and by higher sales for The Interlace, along with rental income from CapitaGreen.

  • AT A GLANCE

  • REVENUE: $894.2 million (-2.3%)

  • NET PROFIT: $218.3 million (+35.4%)

  • DIVIDEND PER SHARE: N.A.

CapitaLand Singapore sold 222 homes in the quarter with a total value of $506 million compared with 69 units worth $197 million previously.

CapitaLand China saw a 3.8 per cent dip in revenue to $195.9 million.

A year earlier, revenue had been boosted by a fair value gain from the change in use of Ascott Heng Shan Shanghai from a development property to an investment property.

If such one-off items were excluded, the unit would have recorded increased revenue in the first quarter due to the higher value of the apartments it handed over.

CapitaLand China sold 3,377 units with a sales value of 4.5 billion yuan (S$933 million) in the first quarter, compared with 1,306 units and a total value of 2.2 billion yuan a year earlier. It handed over 773 units to home buyers in the first quarter, down from 1,109 units previously.

Revenue from CapitaLand Mall Asia fell 18.9 per cent to $147.2 million, largely due to the absence of revenue recognition from Bedok Residences and the loss of contribution from Bedok Mall, which was divested to CapitaLand Mall Trust in the fourth quarter of last year.

Turnover from the company's serviced residence unit Ascott rose 53.6 per cent to $256.8 million as it expanded into Bandung in Indonesia, Penang and Shah Alam in Malaysia and Nha Trang in Vietnam. It also secured three other management contracts for properties in Thailand, China and Malaysia.

Revenue from corporate and other sources fell 30.7 per cent to $13 million due to fewer units handed over to buyers for projects in Vietnam.

The group's earnings before interest and tax rose 20.1 per cent to $458.2 million, mainly due to fair value gains from the divestment of Somerset ZhongGuanCun Beijing, improved contributions from CapitaGreen, shopping malls and development projects in China, as well as lower divestment losses.

Earnings per share for the quarter was 5.1 cents, up from 3.8 cents a year earlier, while net asset value per share was $4.13 at March 31, down from $4.21 at Dec 31. CapitaLand shares closed down five cents to $3.17 yesterday. The results were announced before markets opened.

A version of this article appeared in the print edition of The Straits Times on April 21, 2016, with the headline 'CapitaLand's net profit for Q1 rises 35.4% to $218.3m'. Print Edition | Subscribe