CityDev promotes Sherman Kwek to CEO-designate; Q2 net profit slips 17.9%

CITY Developments Ltd (CDL) said on Friday that it has promoted its deputy chief executive officer, Sherman Kwek, to be CEO-designate with immediate effect after CEO Grant Kelley tendered his resignation the day before.

Mr Kelley's last day will be December 31, 2017. Mr Sherman Kwek - son of CityDev's executive chairman, Kwek Leng Beng, and nephew of non-executive director Kwek Leng Peck - will take over the full responsibilities on January 1, 2018.

"Having put in place a succession plan to ensure continuity of leadership within the senior management team, the board is unanimous in its support to promote Mr Sherman Kwek, currently, the Deputy CEO, to be CEO-designate...'' the property group said.

Mr Kelley, who has served more than three and a half years, will be taking up new challenges as the CEO of a listed company based in Melbourne, Australia, which offer is timely as he intends to return home to Australia for personal reasons.

Mr Sherman Kwek has been the Deputy CEO of CDL and the Executive Chairman of CDL China Limited since April 2016. In his previous roles as the Chief Investment Officer of CDL and the CEO of CDL China Limited, he established a presence for the Company in Japan and Australia as well as spearheaded the expansion into China for the past 7 years, helping to obtain prime sites in Shanghai, Suzhou and Chongqing and investing in various innovative startups. He has experience in the areas of investments, mergers and acquisitions, real estate and hospitality, and has worked in New York, Hong Kong, Shanghai and Singapore.

The Singapore-listed property group posted a net profit of S$109.9 million for the second quarter ended June 30, 2017, down 17.9 per cent from the net profit of S$133.8 million a year ago. Revenue was S$854.1 million, down 21.8 per cent from S$1.1 billion a year ago.

At the end of June 2017, CityDev's net gearing ratio, without considering revaluation surplus from investment properties, remained at 16 per cent with interest cover at 10.6 times. It boasts of some S$3.5 billion in cash and cash equivalent.

Its board has declared payment of a special interim dividend of 4.0 cents a share.

Kwek Leng Beng said the group is well poised to benefit from an upcycle:"To replenish our land bank, we will continue to bid strategically while remaining disciplined to core fundamentals.

"We remain hopeful that the Qualifying Certificate policy can be reviewed in due course, so that developers can look towards both Government Land Sales and private sales for land replenishmentand avoid a dangerous upward spiral in land cost and property prices that is not in line with the growth of the economy."