CDL Q2 profit surges 80% on strong residential sales

The crowd at the launch of Phase 1 of The Tapestry, CDL's 861-unit condominium in Tampines, in March this year.
The crowd at the launch of Phase 1 of The Tapestry, CDL's 861-unit condominium in Tampines, in March this year.PHOTO: CDL

SINGAPORE - City Developments Limited (CDL) on Wednesday (Aug 8) reported a second quarter net profit of $204.8 million, up 80 per cent from $114.1 million the year ago.

This came on the back of a 60 per cent increase in revenue for the quarter to $1.36 billion this year from $854 million last year.

Earnings per share for the quarter ended June 30 came up to 21.8 Singapore cents, compared to 11.8 cents in the previous year.

The increases for second quarter 2018 were largely due to higher gross profit generated by the company's property development segment, said the property developer.

CDL said its launched projects performed well in H1 2018, before the new property cooling measures were announced in July. The group, together with its joint venture associates, sold 651 units including executive condominiums (ECs), with a total sales value of $1.29 billion compared with 691 units worth $1.15 billion for the same period last year.

In Singapore, CDL's property projects that did well include the 174-unit Gramercy Park at Grange Road, which, launched in March 2016, is fully sold. The 124-unit New Futura at Leonie Hill Road saw 92 units (representing over 74 per cent of all units), including the two penthouses, sold to-date, achieving an average selling price (ASP) of about $3,500 per square foot, said CDL. Since Phase 1 of The Tapestry, the group's 861-unit condominium in Tampines was launched in March this year, 488 or 89 per cent of the 550 units released have been sold to date with an ASP of about $1,350 psf.

The board has declared a tax-exempt (one-tier) special interim ordinary dividend of six cents per ordinary share for the period, payable on Sept 12.

Mr Kwek Leng Beng, CDL's executive chairman, said, "We had two quarters of strong residential sales in Singapore, but market dynamics changed after the unexpectedly harsh property cooling measures were announced in July. Sales are expected to moderate though prices may be sustained for very few quality projects in good locations where there is limited supply and pent-up demand.

"Having navigated various property cooling measures over the years, we have seen that sentiment and timing are critical. As our land bank was bought relatively early before prices rose further, this gives us more flexibility for the commencement of construction and sales launches. Our investment horizon remains long-term and we will continue to adopt a disciplined approach to maximise returns for shareholders."