CapitaLand issues profit warning, expects full-year loss

CapitaLand's overall business and financial position remains resilient, the firm said. PHOTO: REUTERS

SINGAPORE (THE BUSINESS TIMES) - CapitaLand announced in its profit guidance on Friday that it is expecting to report a loss for the full year ended Dec 31, 2020 as a result of the impact from revaluations and impairments.

Based on indicative values, the company's share of fair value losses is expected to be in the range of S$1.55-1.65 billion, compared with the gain of S$674.8 million a year ago. This fair value loss represents about 4.7 per cent of the group's investment properties portfolio value.

It is also expecting to recognise higher impairment losses in the range of S$800-900 million in FY2020 versus S$31.6 million in the previous year. The group is in the process of finalising valuations on its portfolio of properties as well as impairment assessments of its investments as at Dec 31, 2020.

"The fair value and impairment losses are non-cash in nature, and principally stemmed from the extraordinary events relating to the Covid-19 pandemic that materially affected the CapitaLand group's business during FY 2020," the group said in its bourse filing.

It added that the group's operating and financial performance continues to recover, improving in the second half of 2020 as compared with the first half.

In its profit guidance for the full year ended Dec 31, 2020, the group also said that it expects operating profit after tax and minority interests (Patmi) to shrink by about 20-30 per cent from the S$1.06 billion recorded a year ago.

Cash Patmi, comprising operating Patmi and portfolio gains is expected to fall by 35-45 per cent from the S$1.49 billion achieved in FY2019.

Notwithstanding the expected full-year loss, CapitaLand's overall business and financial position remains resilient, it said.

The company expects to deliver healthy cash Patmi for FY2020, which will continue to support the company's dividend policy, it added.

CapitaLand will be releasing its FY2020 financial results before the start of trading on Feb 24.

Shares of CapitaLand ended Friday at S$3.40, down S$0.05 or 1.5 per cent.

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