CapitaLand’s Q4 net profit soars 71% to $475.7m

The developer does not expect home prices to rebound quickly after new property cooling measures were introduced in July.

Singapore’s largest developer CapitaLand saw its net profit jump 71 percent year-on-year to $475.7 million during the fourth quarter of 2018, while revenue rose 34 percent year-on-year to $1.62 billion.

The developer attributed the increase in net profit to “better operating performance, as well as higher gains from asset recycling and revaluation of investment properties”.

For the whole of 2018, revenue and net profit climbed 21 percent and 12.3 percent to $5.6 billion and $1.8 billion respectively.

“CapitaLand has achieved good results amidst a challenging economic and market environment. This achievement is due primarily to our diversified asset base, disciplined approach in asset recycling and capital allocation, and strong operating expertise,” said CapitaLand’s chairman Ng Kee Choe.

Speaking in a Bloomberg interview, CapitaLand’s chief financial officer Andrew Lim said the company does not expect home prices in Singapore to stage a rapid rebound after the government introduced new property cooling measures in July.

“We agree with the main view on the street which is that we don’t expect a big bump up anytime soon,” he said.

“If we see a five percent increase in home prices I think that will be a pretty good year for the Singapore residential market,” noted Lim. “The severity and extent of the measures in July caught us by surprise.”

Meanwhile, City Developments Limited (CDL) saw net profit for the fourth quarter of 2018 drop 54.7 percent to $77.9 million from $171.9 million over the same period in 2017. Revenue also fell 40.6 percent to $788.3 million from $1.3 billion in Q4 2017.

It noted that the higher revenue and net profit for Q4 2017 “were boosted by the full recognition of revenue and profit from The Brownstone EC, which obtained its Temporary Occupation Permit in October 2017 and a gain from the partial divestment of the Group’s interest in two Chongqing projects”.

“Excluding $94.1 million of impairment losses for hotels and $20.1 million of allowance for foreseeable losses for two small-scale development projects in central London which potentially may be leased out, as well as a gain from the partial divestment of the group’s interest in two Chongqing projects in 2017”, net profit for Q4 2018 had in fact expanded by 17 percent.

For the whole of 2018, CDL’s revenue and net profit rose 10.3 percent and 6.7 percent to $4.2 billion and $557.3 million respectively.

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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg