PROPERTY giant CapitaLand yesterday posted a 59.3 per cent year-on-year drop in first-quarter net profit to $247.5 million, from $608.1 million in Q1 2007 when the bottom line had been boosted by a $426.8 million fair value gain from the sale of 8 Shenton Way (formerly Temasek Tower).
The group said, however, that its assets under management (AUM) rose to $19.1 billion as at end-Q1 2008 from $14.6 billion a year ago. It now manages four listed real estate investment trusts and 13 private equity funds across Singapore, China, Japan, Malaysia and the Gulf Cooperation Council region.CapitaLand also said in its Q1 results statement that it plans to originate new property funds in Asia, in particular China, following the increased institutional and private investors' interest for real estate investments.
The group is on track to grow AUM to $25 billion in three to five years. Its fund management arm, CapitaLand Financial, reported a 52.4 per cent year-on-year jump in Q1 earnings before interest and tax (Ebit) to $18.5 million.
Group revenue for the first quarter ended March 31, 2008, dipped 0.9 per cent to $631.3 million. Higher revenue from office and retail properties was offset by lower sales of development projects in Singapore. Singapore's share of CapitaLand's group revenue and Ebit slipped in Q1 this year against the year-ago period. The Republic made up 29.7 per cent of revenue in Q1 2008, down from 41.4 per cent in Q1 2007. Singapore's share of Ebit fell from 83.5 per cent in Q1 2007 to 55 per cent in Q1 2008.
At CapitaLand's annual general meeting on Tuesday, shareholders were told that 2008 full-year earnings are unlikely to match last year's $2.8 billion due to a lack of revaluation gains. However, the group should perform better at the operating level, chairman Richard Hu told shareholders.
In its results statement yesterday, CapitaLand said it expects sentiment in the Singapore residential sector to remain cautious until more stability emerges in global financial markets and economic conditions. 'However, earnings for our residential business in Singapore will be underpinned by brisk sales achieved in the last two years,' it added.
The group was silent on possible launches in Singapore this year, although it highlighted likely launches elsewhere, in China, Vietnam, Thailand and Kazakhstan.
Ebit from residential rose 11.7 per cent year-on-year to $151.5 million in Q1 2008, with the improvement contributed mainly by China, arising from marked-to-market gains on an investment.
Ebit from commercial strategic business unit fell 74.6 per cent to $138.6 million due mainly to the fair value gain for Temasek Tower in the same year-ago period. The retail SBU posted a 145.8 per cent jump in Q1 Ebit to $58.1 million largely on the back of unrealised forex gains arising from revaluation of US dollar-denominated loans as the Sing dollar strengthened against the US currency and the divestment gain of Xizhimen mall to CapitaRetail China Trust, but partly offset by higher operating expenses.
The Ascott Group's Ebit rose 35.3 per cent to $39.5 million, due largely to the portfolio gain from the divestment of the property at 6 Sarkies Road in Singapore and better revenue per available unit performance from Europe and Singapore operations.
CapitaLand also said that the group's net debt to equity ratio rose to 0.59 as at end-Q1 2008 from 0.5 as at end-Q1 2007. The group's gross debt stood at $12.4 billion as at end-Q1 2008 compared with $8 billion a year earlier.
Earnings per share fell from 21.8 cents in Q1 2007 to 8.8 cents in Q1 2008. Net asset value per share stood at $3.62 as at March 31, 2008, up slightly from $3.54 as at Dec 31, 2007.
On the stock market yesterday, CapitaLand closed 18 cents lower at $6.79.
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