CAPITALAND posted net profit of $885.7 million for the fourth quarter ended Dec 31, 2009, which included an $899.8 million gain from listing a 34.5 per cent stake in CapitaMalls Asia late last year.
The Q4 net profit was also inclusive of $302.2 million in impairments and a net revaluation surplus of $8.8 million.
Impairments made include those for a joint venture project in Shinjuku, Tokyo; Raffles City Bahrain; some goodwill from the privatisation of Ascott earlier last year; and on the group’s subsidiary Australand.
The group had posted nearly $78 million net profit in Q4 2008.
CapitaLand is proposing a 5-cent per share special dividend in view of CMA’s successful listing in addition to a first and final dividend of 5.5 cents for FY2009. The total payout of 10.5 cents compares with 7 cents in 2008.
For full-year 2009, the property giant reported a net profit of $1.05 billion, down 16.4 per cent from $1.26 billion in FY2008. Excluding net revaluation losses of $92.9 million and impairments of $485.6 million, as well as divestment gains of about $1 billion – mainly from listing CMA, selling its stakes in Hong Kong’s Link Reit, Raffles City Hangzhou and the Kallang Bahru Complex and Kallang Avenue Industrial Centre in Singapore – the operational profit after tax and minority interest (Patmi) for FY2009 would be about $650 million. This is higher than FY2008 operational Patmi of about $360 million, on the same basis.
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In acknowledging the strong contribution from CMA’s flotation to the group’s Q4 and full-year bottomlines, CapitaLand’s management stressed that the CMA business was built over many years.
Net asset value per share fell from $3.78 at end-2008 to $3.16 at end-2009; the latter figure was computed on a larger share base after a rights issue.
Overseas earnings before interest and tax (Ebit) contribution in FY2009 were $236.9 million or 15.3 per cent of group total Ebit (FY2008: $1.3 billion or 59.8 per cent), due to lower contribution from China, Australia and Other Asia. China’s FY2008 contribution had been boosted by gains from selling the Raffles City portfolio and Capital Tower Beijing.
The group Q4 net profit (Patmi) of about $886 million was its best quarterly bottomline last year. FY2009 marks the fourth consecutive year that CapitaLand has achieved net profit of over $1 billion, said CapitaLand Group president and CEO Liew Mun Leong. ‘Our proactive capital management and business initiatives in 2009 have positioned us to be ahead of the curve.’
The group deleveraged early in the financial crisis, raising a total of $5 billion through various equity issues, extended its debt maturity profile through a $1.2 billion convertible bonds issue and raised $2.8 billion from CMA’s IPO. All these helped the group lower its net debt/equity ratio from 0.47 at end-2008 to 0.09 at end-2009, although the latter figure would be higher at 0.26, assuming the acquisition of Orient Overseas Developments Ltd (OODL) announced in January had been completed on Dec 31, 2009. The US$2.2 billion transaction was completed on Feb 10.
CapitaLand Residential Singapore posted a 165.4 per cent year-on-year jump in Ebit to $132.7 million in Q4 2009. Full-year Ebit from this unit rose 112.4 per cent to $371.7 million. The group booked gains of $164 million from The Seafront on Meyer, $60 million for Latitude and $130 million for The Orchard Residences for FY2009.
Ebit from CapitaLand China Holdings leapt from $34.7 million in Q4 2008 to $195 million in Q4 2009 on the back of higher residential sales and fair value gains. This year, projects on three of the seven OODL sites will be ready for launch. These are located at Changle Road in Luwan and Nanmatou (both in Shanghai) and Kunshan Huaqiao in Kunshan City. The group has also resolved ‘idle land notice’ issues with the authorities for the Hengshan site in Shanghai and construction can now begin this year.
In Singapore, the group plans to launch this year new phases at The Interlace (after Chinese New Year), as well as Urban Resort Condo on the former Silver Tower site in the Cairnhill area and a condo project on the former Farrer Court site. As well the plan is to release The Nassim, on the former ANA Hotel site, around mid-year. The project comprises 55 units, mostly three and four bedders.
CapitaLand Residential Singapore CEO Patricia Chia expects the mid to high-end residential market will continue to do well this year, with a price upside of probably 10-20 per cent. ‘The mass market will be more or less flattish because it has reached resistance level at $800-900 psf, which is the affordability level,’ she added.
The group, which has a pipeline of about 2,600 residential units in Singapore, has not been active at recent Singapore state land tenders, but remains keen on sites nearer to the city fringe and transportation hubs. Mr Liew said the group is not pressured to buy residential land in Singapore when the price gets exorbitant as it has the option of looking overseas.
Mr Liew said the Gulf Cooperation Council (GCC) market is the most fragile of the group’s markets. While the group does not have any projects in Dubai, – although its serviced residence arm Ascott has management contracts – the fallout from Dubai will have impact on the whole GCC region. Construction of Raffles City Bahrain has been held back and the group is redesigning the project.
Mr Liew did not rule out the possibility of relisting serviced residences arm Ascott. However, such a proposition would have to add value. But there have not been any discussions for a relisting, said CapitaLand Group CFO Olivier Lim.
Source : Business Times – 12 Feb 2010
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