City Developments' Q1 net profit shrinks 18.9% to S$85.5m

PROPERTY and hotels group City Developments Ltd (CDL) has posted an 18.9 per cent drop in first quarter net earnings to S$85.5 million from the preceding year, the group said in a Singapore Exchange filing on Thursday evening.

The lower net earnings compared to Q1 2016 were due to a range of factors, including the absence of contribution from two joint-venture projects in Singapore, Bartley Ridge and Echelon, which were completed in 2016; and exchange losses incurred primarily from the repayment of a New Zealand dollar-denominated inter-company loan under the group's indirect subsidiary, CDL Hospitality Trusts.

Also contributing to the weaker bottomline was a disappointing performance by the group's London-listed hotel subsidiary, Millennium & Copthorne Hotels; and lower investment income earned from the realisation of an investment in Real Estate Capital Asia Partners, a private property fund.

For the three months ended March 31, 2017, revenue increased 8.4 per cent to S$783.8 million from the preceding year. This was on the back of improved performance from the property development segment, which posted a 33.9 per cent increase in contribution, primarily led by the progressive handover of units in Phase 1 of Suzhou Hong Leong City Center (HLCC), and a strong take-up for the Gramercy Park condo project in Singapore.

Earnings per share shrank to 9.4 Singapore cents from 11.6 Singapore cents in the year-ago period. Net asset value per share crept up to S$10.23 as at March 31, from S$10.22 three months earlier.

CDL shares closed seven Singapore cents higher at S$10.85 on Thursday.