CapitaLand Full-Year Profit Soars 172.5%

Source : The Business Times, February 23, 2008

CAPITALAND achieved a record performance in 2007, with full-year net profit soaring 172.5 per cent to $2.76 billion, from $1.01 billion the year before.

Revenue increased 20.5 per cent to $3.79 billion, from $3.15 billion in 2006.

The stellar performance was attributed to strong sales of development projects in China and Australia, and the consolidation of revenue from Raffles City Shanghai and One George Street, which became group subsidiaries from Q4 2006 and Q4 2007 respectively.

Fuelled by sales registered in China and Australia, overseas revenue accounted for 76.4 per cent of group revenue, up from 71.2 per cent in 2006. Revenue from China grew 66.3 per cent to $1.1 billion, while revenue from Australia rose 16 per cent to $1.4 billion.

Directors have proposed a total annual dividend of 15 cents a share, comprising eight cents core dividend and seven cents special dividend.

If approved at the group’s annual general meeting in April, this will amount to around $420.9 million in dividends paid.

CapitaLand chief executive officer and president Liew Mun Leong said the group’s business model ‘has enabled us to deliver four consecutive years of record profits since 2004′.

But he said the first six months of 2008 are likely to reflect the dampening effects of the US sub-prime crisis and global credit crunch. However, he believes the market may turn around in the second half of the year.

Last year, CapitaLand sold more than 1,400 homes in Singapore and about 2,000 homes in China.

For 2008, Mr Liew said the group expects to launch between 800-1000 residential units in Singapore. Projects slated for launch include Latitude at Jalan Mutiara and the development at the former Silver Tower site. CapitaLand has a pipeline of of 3,500-4,000 units in Singapore, of which about 20 per cent are in the high-end region, he said.

The group has a pipeline of 35,000 homes in China, where it will launch about 2,000 units this year.

In Vietnam, it intends to launch three projects in Ho Chi Minh City. Over in Thailand, it is looking to launch two projects in Bangkok and Krabi.

On a business segment basis, revenue from residential developments in 2007 was $2.86 billion, up 21.5 per cent year-on-year. Earnings before income tax were $1.07 billion, up 52.6 per cent year-on-year.

CapitaLand’s commercial business unit reported revenue of $241.8 million, up 73.7 per cent year-on-year. Earnings before income tax were $1.96 billion, up 443.8 per cent year-on-year and attributed to fair value gains from investment properties, divestment gains, improvement in operating results as well as the consolidation of Raffles City Shanghai and One George Street.

CapitaLand’s retail unit saw revenue increase 31.3 per cent to $124.2 million year-on-year, with earnings before income tax rising 34.7 per cent to $297.9 million. This was attributed to revenue from Clarke Quay, malls in China and property management fees from the group’s China funds.

CapitaLand’s financial services unit saw assets under management grow $2.6 billion to $15.9 billion, excluding Ascott Residence Trust and Ascott Serviced Residence Fund. Revenue grew 17.7 per cent to $119.2 million and earnings before income tax increased 13.2 to $69.7 million.

The serviced residence unit saw revenue fall 3.9 per cent mainly due to consolidation of Ascott Residence Trust. But earnings before income tax rose 66.5 per cent to $337.2 million.