City Dev More Than Doubles FY Net Profit To S$725m

Source : Channel NewsAsia, 28 February 2008

Property developer City Developments (CDL) has booked record full year earnings, thanks to strong home sales and hotel revenues.

Net profit for 2007 more than doubled on-year to S$725 million, beating market expectations.

Revenue rose by 22 percent to S$3.1 billion.

CDL says it will not rush into new residential launches in the coming months but will closely monitor market conditions.

It has been a good year in 2007 for City Developments which sold 1,655 residential units in Singapore.

But the developer expects to see a dip in sales this year because of the US sub-prime mortgage crisis.

But it says hotel operations, which accounted for 64 percent of its revenue last year, will remain robust.

Kwek Leng Beng, Executive Chairman, City Developments, said: "I think all sectors will slow down but I think hotels will continue to perform very well in the key gateway city where we're located."

CDL's full year earnings are its highest since its inception in 1963.

For the fourth quarter alone, net profit jumped by 71 percent on year to S$235 million.

The developer acquired 8 sites worth about S$1.3 billion last year, the biggest of which was South Beach.

It expects to launch its Quayside Isle@ Sentosa Cove project this year, as well as the redeveloped former Lock Cho apartments at Thomson Road.

But CDL says it is possible some of its project launches may be delayed.

Mr Kwek said: "This year we will continue to operate more efficiently for the hotels and the office rental. We will continue to revise the rentals when the leases are expired and we will launch the project at the right time.

"The difference between last year and this year is that last year you could sell property under development very quickly (but) this year you have to be realistic that you cannot do that. Therefore there's a likelihood that some projects will be delayed before we launch."

Out of the four projects scheduled to be launched in the first half of 2008, CDL is giving priority to two projects.

Mr Kwek said: "We will delay some. We will go ahead with some of these launches where we had already secured much earlier, construction cost has been cheaper. I think we have five but possibility is that we will launch two first. One is the Quayside in Sentosa and the other one could be the Thomson Road Lock Cho building construction for 300 over units."

CDL remains positive about its prospects for 2008, saying it expects to say profitable.

It is proposing to pay a final dividend of 7.5 cents a share and a special dividend of 12.5 cents per share. - CNA/ch/ir