CAPITALAND, South-east Asia's top property developer, met expectations with a 59 per cent slide in quarterly profit due to lower sales in Singapore and the absence of one-off gains, and said buyers would remain wary amid the credit crisis.
CapitaLand earned net profit of $247.5 million (US$182 million) in the three months to the end of March, compared with $608.1 million from a year agoThe developer earned net profit of $247.5 million in the three months to the end of March, compared with $608.1 million from a year ago, in line with the average forecast of $247 million by three analysts polled by Reuters.
CapitaLand said on Wednesday the 2007 first-quarter results included a $426.8 million fair value gain from one of its office buildings in Singapore.
'Market sentiment in the property market is expected to remain cautious until a sustained recovery in the financial markets and economic conditions can be foreseen,' CapitaLand said in a statement.
'Nevertheless, the group is confident that it will be profitable in 2008,' said the group, which is partly owned by state investment firm Temasek Holdings.
The developer's Chairman Richard Hu said on Tuesday that its 2008 earnings were unlikely to match last year's $2.8 billion due to a lack of revaluation gains.
Private home prices in Singapore, CapitaLand's biggest market, recorded a second straight quarter of slower growth in the first quarter of 2008 as property sales slumped to the lowest in five years, government figures showed on Friday.
About $1.1 billion of CapitaLand's profit last year was from gains in the value of properties and investments it still holds. The other $1.7 billion came from selling apartments, trading properties, rent and managing real estate funds.
Singapore property firms have so far reported disappointing earnings for the quarter ended March 2008, partly due to slower sales in the local market.
The city-state's number three developer Keppel Land posted a 3.5 per cent fall in net profit, while GuocoLand and Allgreen suffered earnings declines of 93 per cent and 65 per cent respectively.
CapitaLand shares rose 1.3 per cent in the first quarter, outperforming rivals City Developments whose shares lost 22 per cent while KepLand is down 24 per cent. The broader Straits Times Index fell 13 per cent in the same period. -- REUTERS
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