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CityDev's Q2 net profit slips 3.2%, declares special interim dividend
CITY Developments Limited (CDL) reported on Thursday that its net profit for the second quarter to end June slipped 3.2 per cent to S$133.5 million despite strong prevailing headwinds.
Revenue fell by 4.2 per cent to S$824.9 million. Earnings per share eased 3.4 per cent to 14 Singapore cents, from 14.5 cents a year ago.
CDL posted a 2.8 per cent increase in revenue to S$1.6 billion in the first-half of 2015 on revenue from Millennium & Copthorne Hotels plc (M&C)'s hotels acquired in 2014, and improved performance from refurbished hotels. CDL has a 63 per cent interest in M&C.
During the quarter, the property and hotel group had net cash outflows from financing activities of S$145.0 million, compared to net cash inflows of S$283.7 million a year ago. The cash outflow was due to lower net proceeds from borrowings of S$113.5 million, higher dividend paid, coupled with increased payment arising from more shares of M&C being purchased by the group.
As at June 30, 2015, without factoring revaluation surpluses in investment properties, CDL's net gearing ratio was 28 per cent, with interest cover at 10.5 times. Its balance sheet remained strong with over S$3.7 billion of cash and cash equivalents.
Kwek Leng Beng, CDL Executive Chairman, said the operating environment in Singapore was expected to stay challenging in the near term, while the global outlook remained uncertain.
"With our strong balance sheet, we have the financial prowess and agility to capture opportunities in a timely manner, while maintaining firm discipline in our investment strategy for Singapore and abroad,'' he said.
Mr Kwek said CDL's diversification strategy was poised to gather momentum and prominence in the next few years.
"CDL is actively pursuing our unlisted funds management business, though we are deliberately adopting a highly selective approach to nurture this new platform, which will take time to develop. The real estate development platforms that we have established in new markets are swiftly taking shape. In the rest of the year, we plan to launch some of our residential projects in UK and China progressively."
The board has declared a special interim dividend of 4.0 Singapore cents per share.