CDL jumps more than 8% on special interim dividend and hints of more rewards for shareholders
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CDL's group chief executive Sherman Kwek (left) and executive chairman Kwek Leng Beng at the company's results briefing on Aug 13.
PHOTO: CDL
Follow topic:
- CDL's first half of the year net profit rose 3.9% to $91.2 million, with revenue up 8% to $1.69 billion, driven mainly by the Copen Grand project.
- A special interim dividend of 3 cents per share was proposed, with significant gains expected from divestments, particularly South Beach.
- Forex losses and weaker hotel performance led to pre-tax losses of $84.4 million; Philip Yeo exited CDL board in July.
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SINGAPORE – City Developments Limited (CDL) stocks surged in early trade on Aug 13 on the back of a special interim dividend and hints that there are more goodies to come.
The shares opened at $6.41 after the developer unveiled its first-half results and quickly climbed to $6.89, up more than 8 per cent. They eventually closed at $6.80, up 7 per cent.
Chief executive Sherman Kwek told a briefing that CDL will try to pay one-third of its net income as dividends every year.
He added that when the firm has a “nice bonanza with big divestments, we will try to reward our shareholders more. But on the whole, every year, we try to stick to a one-third payout ratio”.
“I think we have had a track record where whenever we have had strong years, we always tended to reward our shareholders handsomely, he said.
“This year, we are expecting quite an outsized divestment. So hopefully we will have a nice surprise for all of you.”
Mr Kwek noted that shareholders received a total payout of 31.1 cents a share in the 2021 financial year, most coming from a special distribution in specie amounting to 11.7 per cent of the units in CDL Hospitality Trusts. This came as the group swung into the black.
CDL generated net profit of $91.2 million in the six months to June 30, 2025, up 3.9 per cent from a year earlier, while revenue grew 8 per cent to $1.7 billion.
The board declared a special interim dividend of three cents a share, payable on Sept 5, up from the two cents a share it paid out a year earlier.
The improved bottom line was driven by a better performance by the property development segment, the largest revenue contributor.
It recorded full profit recognition from its fully sold joint venture executive condominium project Copen Grand, which was completed in April 2025. Other contributing projects included The Myst and Norwood Grand, as well as joint ventures Canninghill Piers, Tembusu Grand, The Orie and Kassia.
Mr Kwek said the results could have been better if not for the $63.1 million unrealised net foreign exchange losses incurred in the first half following the depreciation of the US dollar against the Singdollar. The impact is unrealised, so the position will reverse if the US dollar appreciates.
If the exchange effects were excluded, CDL’s net profit for the first half would have jumped 322.7 per cent year on year to $154.3 million.
Mr Kwek reiterated the board has approved the buyback programme, noting that the share price is still “hugely undervalued compared to its net asset value and revalued net asset value”.
Net asset value per share was $10.10 as at June 30.
Capital recycling remains a key focus, with around $1.5 billion in contracted divestments made so far this year. But Mr Kwek added that Republic Plaza – CDL’s flagship and headquarters, will never be sold or injected into an investment platform.
The expected completion of the sale of the group’s 50.1 per cent stake in the South Beach mixed-use development
The investment properties segment recorded stable revenue, supported by higher contributions from Republic Plaza, Jungceylon Shopping Centre, City Square Mall and the living sector projects in Britain and Japan. But these were offset by lower contributions from its British commercial properties.
Hotel operations reported a pre-tax loss of $84.4 million in the first half, largely due to a net foreign exchange loss from the depreciation of the US dollar, inflation pressures and weaker performance in key markets such as Singapore and the US.
Mr Kwek said CDL will re-explore listing its British real estate investment trust (Reit) after it was shelved in 2022 due to a challenging market. CDL applied to list the Reit on the Singapore Exchange’s mainboard in 2021, with two commercial buildings and an asset owned by a third party.
The firm has since acquired a third British commercial asset, St Katharine Docks in central London, for £395 million (S$685 million) in March 2023.
“Now we have a portfolio that’s worth at least a billion sterling. So we have scale to be able to move forward to do a Reit listing on our own. It will be quite a substantial, sizeable listing, but you do need conditions to be conducive for such listing,” Mr Kwek said.
The briefing held in the M Hotel also included questions about the high-profile feud among board members early this year.
Executive chairman Kwek Leng Beng, who is Mr Sherman Kwek’s father, said: “Our priority is to deliver on our commitments, strengthening our balance sheet, unlocking the potential of our portfolio and redeploying capital into higher-yielding opportunities.”
Mr Sherman Kwek added that these matters are “fluid and ultimately will depend on shareholders and the board of directors”.
