CapitaLand Q4 net profit surges 73.8%

Better operating performance among reasons for upswing

Raffles City Shenzhen is one of the eight malls that CapitaLand will be opening this year. The developer is now in a very resilient position, said its CEO, following last financial year's good results.
Raffles City Shenzhen is one of the eight malls that CapitaLand will be opening this year. The developer is now in a very resilient position, said its CEO, following last financial year's good results.PHOTO: CAPITALAND

Developer CapitaLand ended last year on a high note, with a sharp spike in fourth-quarter net profit, driven partly by a better operating performance.

Net profit surged 73.8 per cent to $430.5 million for the three months ended Dec 31, the company reported yesterday.

Higher fair value gains on the revaluation of investment properties and lower impairments also pushed quarterly earnings higher.

Fourth-quarter revenue rose 6.5 per cent year on year to $1.85 billion, thanks to higher rental income from the serviced residence business and higher handovers of development projects in China.

Singapore and China accounted for 87.2 per cent of the group's revenue in the fourth quarter, up from 86.7 per cent a year before.

CapitaLand president and group chief executive Lim Ming Yan said that the firm believes in the medium- to long-term prospects of the Singapore economy amid the country's transition into its next phase of growth.


  • NET PROFIT: $430.5 million (+73.8%)

    REVENUE: $1.85 billion (+6.5%)

    PROPOSED DIVIDEND: 10 cents per share

"Singapore is an important market for us. In the medium term, we are definitely positive about the market here. We are constantly on the lookout for opportunities in the markets that we have presence in," Mr Lim told a briefing yesterday.

Its home sales here more than doubled last year to 571 units, valued at $1.42 billion, while sales in China rose by 14 per cent year on year to a record 10,738 units which were sold for 18.1 billion yuan (S$3.75 billion).

Even though the property cooling measures in Singapore remain firmly in place, the developer sees signs of stabilisation in the residential market as private home prices fell at a slower clip and new sales rose slightly last year.

"There are some positive signs that the market is picking up. But, the competition for (land) tender is still very steep," noted Mr Wen Khai Meng, chief executive of CapitaLand Singapore. He added that the firm is still "eager" to land bank and that it will continue to evaluate opportunities here against the risk and returns on other investment options.

Quarterly earnings per share was 10.2 cents, up from 5.8 cents a year before. Net asset value per share came in at $4.15 as at Dec 31, lower than $4.21 at the end of 2015.

CapitaLand posted an 11.7 per cent jump in full year net profit to $1.19 billion, while revenue rose 10.3 per cent to $5.25 billion. The operating profit, after tax and minority interests - which climbed 5 per cent to $865.3 million for fiscal 2016 - was the highest since the firm was listed in 2000. "CapitaLand is now in a very resilient position with a strong operating cash flow," said Mr Lim .

The developer has a strong pipeline of projects this year, including the opening of eight malls with a total of one million sq m of retail gross floor area. They comprise a mall each in Malaysia and India, and six in China, including Raffles City Shenzhen.

The firm is proposing a dividend of 10 cents per share for the 2016 fiscal year, up from nine cents in 2015.

"We are very confident of sustaining this dividend in the years ahead through, what we believe would be, increasingly uncertain times," said group chief financial officer Andrew Lim.

CapitaLand shares ended three cents higher at $3.49 yesterday after the earnings were announced.

Correction note: An earlier version of the story stated that CapitaLand's president and group chief executive is Lim Min Yan. This is incorrect. His name is Lim Ming Yan. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on February 16, 2017, with the headline 'CapitaLand Q4 net profit surges 73.8%'. Print Edition | Subscribe