Southeast Asia's biggest property developer CapitaLand has reported record earnings for the fourth year in a row.
Net income for 2007 came in at better than expected S$2.8 billion, almost three times higher compared to the previous year. The jump was due to robust growth in its key markets of Singapore, China and Australia as well as fair value gains on its portfolio.
CapitaLand expects Singapore's residential market to remain robust in 2008, with prices climbing by 5 to 10 percent.
It is confident about its business fundamentals despite the current US sub-prime woes.
Apart from record profits last year, revenues also came in at an all-time high of S$3.8 billion, a jump of 20.5 percent year-on-year.
With a strong cash flow, CapitaLand is looking to capitalise on opportunities that may arise in these uncertain times.
Liew Mun Leong, President and CEO, CapitaLand, said: "In our case, our financial position is very strong. We have a strong balance sheet. We have very low debt equity ratio of only 0.47; (this) is a very low gearing for a real estate company... So in terms of borrowings we still have a lot of capacity.
"In fact, today we have a cash - free cash - of S$4.4 billion. So financially we are there in terms of addressing the opportunity in the market. Of course going forward, we still got to watch out for how long the crisis will affect the credit market. We think that we are in a better position than most companies."
The property developer says it will focus on growing its key markets of Singapore, Australia and China, which together account for 70 to 80 percent of its business.
Last year it saw strong growth in its earnings, in particular, from Singapore and China. Earnings before interest and tax for Singapore rose 150 percent on-year to S$2.3 billion.
Meanwhile, China grew 115 percent to S$879 million, while Australia saw a 61 percent jump to S$450 million.
But CapitaLand is also looking at emerging markets such as Vietnam, India and Abu Dhabi. It is expected to look for growth opportunities in new markets for serviced apartments and financial services, as well as through private real estate funds and REITS.
Mr Liew said: "Today we have a number of REITS which are doing very well. We are still interested in creating more REITS. Our target is to have 10 REITS at least in our portfolio. There are some promising potential for us to do new REITS." Currently CapitaLand has five REITS.
CapitaLand also announced that it has entered into a joint venture with AustraLand Industrial and Logistics International to grow its logistics and industrial sectors in Asia.
The developer is proposing a final and special dividend of 15 cents per share, compared to 12 cents in the previous year. - CNA/ch
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