CityDev Q1 Net Profit Up 31%; More Profits To Be Recognised

Source : The Business Times, May 14, 2008

Property developer City Developments Ltd said net profit for the first quarter ended March 31, 2008 rose 30.8 per cent to $164.97 million due to strong property development segment.

Basic earnings per share rose to 18.1 cents versus 13.9 cents a year ago - an increase of 30.2 per cent.

Revenue for the period, however, fell 1.3 per cent to $758.75 million.

Explaining the dip in revenue, CityDev said the group's share of revenue in the jointly-controlled entities (JCE) is not included according to its policy of equity accounting for its JCE.

If its share of revenue in JCE was to be included, the revenue for Q1 2008 would show an increase of 6.9 per cent to $956.8 million, compared to $895.1 million a year ago.

For the period, profits were recognised from City Square Residences, One Shenton, Tribeca and The Solitaire. Profits were also recognised from joint-venture projects such as The Sail@ Marina Bay, St. Regis Residences, The Oceanfront @ Sentosa Cove, Parc Emily, The Botannia and Ferraria Park.

However, no profit recognition has been made yet for Cliveden at Grange and Wilkie Studio as these projects are still in the initial stage of construction.

Going forward, CityDev has lined up four projects for launch once the sentiments improve and when pent-up demand can be expected. These are Shelford Suites, The Arte @ Thomson, Pasir Ris Phase 1 and The Quayside @ Sentosa.

It expects office leasing to remain strong with upward adjustment of existing rentals to higher level when the existing leases are up for renewal.

It is expediting the construction of two commercial properties -- 3-storey Tampines Concourse as well as the two 8-storey office towers, 9 Tampines Grande -- to cater to the growing demand for office location, outside of the Central Business District.

With profits yet to be recognised from residential developments sold over the last three years which are still in the course of construction, the group is confident of remaining profitable during the next 12 months, even if it decides to continue to hold back or pace its property launches. -- BT newsroom