Singapore's CapitaLand, Southeast Asia's largest developer, said on Tuesday its 2008 earnings were unlikely to match last year's $2.8 billion (US$2.06 billion) due to a lack of revaluation gains.
The firm should, however, perform better at the operating level, chairman Richard Hu said in response to shareholders' queries at the firm's annual general meeting (AGM). 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.
The firm will report its first-quarter earnings on Wednesday.
According to an average estimate of three analysts polled by Reuters, CapitaLand's net profit likely fell 59 per cent to $247 million compared with the first three months of 2007, when earnings received a boost from divestments.
The smaller bottomline will also reflect slowing apartment sales in Singapore due to a global economic slowdown and government measures to cool the republic's property market.
For the whole of 2008, the firm is expected to post a net profit of $1.04 billion, according to a Reuters Knowledge poll of 19 analysts.
'CapitaLand will probably continue to book some revaluation gains this year, but most of the increments would already have been booked in 2007,' Kim Eng property analyst Wilson Liew said.
CapitaLand's chief executive Liew Mun Leong told shareholders at the AGM that the firm will be able to weather the current economic uncertainties as it is well diversified geographically and can still raise funds amid tight credit markets.
The firm made inroads into Vietnam, India and the Middle East last year and it successfully raised $4 billion in the first three months of 2008, he said.
'Because we are well capitalised, we are ready to capitalise on opportunities that arise,' he said.
Singapore property firms have so far reported disappointing earnings for the quarter ended March 2008, partly due to slower sales in the local market.
Singapore's number three developer Keppel Land posted a 3.5 per cent fall in net profit, while GuocoLand and Allgreen reported earnings declines of 93 per cent and 65 per cent respectively. -- REUTERS
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