City Developments' Q2 profit soars 48% to $203.8 million

Net profit for property developer City Developments (CDL) soared 48 per cent to $203.8 million on the back of a 1.8 per cent rise in revenue to $801.6 million over the same period last year.

Its rental property segment contributed the highest earnings to the group due to the gain recognised from the disposal of 100G Pasir Panjang and other industrial facilities. These properties were leased out and held for long term investments before they were sold.

The property development segment also accounted for a sizeable portion of its earnings. Profit were booked-in for pre-sold projects such as Cube 8, 368 Thomson and joint-venture projectures such as The Palette and Bartley Residences.

Although CDL enjoyed brisk sales for its two executive condominiums - Blossom Residences and The Rainforest - it could not recognise profit contribution for the two projects for the quarter due to prevailing accounting treatment.

Earnings from the hotel segment were affected because of subdued demand and higher competition in parts of Asia, as well as the refurbishment of its subsidiary, Millennium & Copthorne Hotels, which resulted in a temporary loss of 181,000 room nights.

At a results briefing earlier, executive chairman Kwek Leng Beng, said: "The global economy remains fragile and unpredictable.

"Domestically, with the latest round of property cooling measures which has been the most effective to date, (CDL) expects stronger headwinds in the second half of the year."

He added that transaction volume for private residential sales is beginning to be more measured and prices are expected to moderate due to the tightening of bank borrowings.

Earnings per share for the quarter were 21.7 cents, up from 14.4 cents a year earlier, while net asset value per share climbed to $8.30 from $8.03 as at Dec 31.

On Monday, the board declared a tax-exempt (one-tier) special interim ordinary dividend of eight cents per ordinary share to be paid on Sept 5.

CDL shares closed down two cents at $10.68 today.

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