CapitaLand first-half profit swells to $922.2m from $96.6m on portfolio gains, market recovery

CapitaLand will operate as two distinct entities from September: the new, listed unit CapitaLand Investment, and the privatised CapitaLand Development.
CapitaLand will operate as two distinct entities from September: the new, listed unit CapitaLand Investment, and the privatised CapitaLand Development.ST PHOTO: KUA CHEE SIONG

SINGAPORE (THE BUSINESS TIMES) - CapitaLand reported a net profit of $922.2 million for the first half of the year ended June 30 - nearly 10 times the profit of $96.6 million for the same period last year.

In a bourse filing on Friday morning (Aug 13), the property giant attributed this to the nascent economic recovery of its two core markets: Singapore and China.

Operating profit from business operations increased 66 per cent to $433.6 million, from $261.2 million previously.

The rest of the boost to profit was credited to portfolio gains of $489 million, which the group said included gains from divestments and realised revaluation gains.

Earnings per share rose to 17.7 cents for the half year, up from 1.9 cents in the year-ago period.

Revenue for the first half of the year rose 34.7 per cent year on year to $2.73 billion, driven mainly by CapitaLand's development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore.

Singapore and China together accounted for 77 per cent of total revenue for the half-year period. As the Covid-19 situation in these two countries gradually stabilised, lower rental rebates were also granted to the group's tenants in Singapore and China.

Other factors contributing to the group's top-line boost in the first half include higher transactional fees from CapitaLand's real estate investment trusts and unlisted funds, along with contributions from its newly acquired business park properties in China as well as 79 Robinson Road, which commenced operation in the second half of 2020.

The latest set of results will be the last the group will be reporting as it heads towards the completion of its proposed restructuring.

Earlier this month, CapitaLand shareholders voted in favour of the real estate group's proposal to privatise its development arm and to list its fund management and property investment business.

CapitaLand will operate as two distinct entities from September: the new, listed unit CapitaLand Investment, and the privatised CapitaLand Development.

"I am looking forward to the continued support of our shareholders under the soon-to-be listed CapitaLand Investment. We remain committed to managing our capital prudently and effectively, albeit under a new pandemic-hit landscape, to deliver on our promise to grow our business sustainably and do right by our stakeholders," said group chief executive Lee Chee Koon.

Shares of CapitaLand closed up one cent, or 0.2 per cent, at $4.10 on Friday.