CapitaLand Q2 net profit down 36.6%

CAPITALAND Limited posted a 36.6 per cent fall in net profit after tax and minority interests (PATMI) for the second quarter ended June 30 from a year ago to S$294 million, dragged by higher cost of sales and lower fair value gains of investment properties.

Operating PATMI also slipped 33 per cent to S$171.6 million. But excluding the one-off fair value gain of S$125.9 million arising from the change of use of development projects a year ago, CapitaLand's operating PATMI would have grown 31.8 per cent.

Lending support to operating earnings are higher contributions from shopping malls and development projects in China, higher contribution from CapitaGreen in Singapore, as well as its serviced residence business.

CapitaLand group CEO Lim Ming Yan noted that CapitaLand's operating performance "has remained robust in an environment of slow economic growth and market uncertainties" with recurring income providing stability and resilience.

"We will maintain our focus on our core markets of Singapore and China and the growth markets of Vietnam and Indonesia, as well as our serviced residence global platform," he said.

Group revenue climbed 9.7 per cent to S$1.13 billion, thanks to higher contributions from development projects in Singapore and China as well as higher rental income from its serviced residence business and higher contribution from CapitaGreen. Residential sales that contributed to the higher revenue during the quarter include Cairnhill Nine in Singapore as well as The Paragon, Shanghai and Vermont Hills, Beijing.

To date, the group has sold over 7,000 homes this year with a total sales value of nearly S$2.62 billion. In Singapore, the group sold 304 homes in the first half this year, nearly three times the 106 units sold in the year-ago period.

In China, CapitaLand sold 6,273 homes in the first half of 2016, 50 per cent more than the same period last year. For the second half of the year, it has over 3,000 launch-ready units.

CapitaLand will also start handing over about 9,000 sold units in China with a total value of about 13 billion yuan (S$2.6 billion) from the second half onwards - with at least 60 per cent of this value expected to be recognised in the second half this year.

As for its serviced residence arm, The Ascott Limited, it is poised to outpace its growth last year when a total of 6,700 was added to the portfolio. In the first half of 2016 alone, it has already added over 5,300 units across the Americas, Asia, Europe and the Middle East to bring its portfolio to more than 47,000 units.