CDL expects H1 net loss of up to S$35m due to Covid-19 restrictions

PROPERTY player City Developments (CDL) expects to post a net loss of up to S$35 million for the half-year ended June, reversing its year-ago profit of S$3.1 million, the company said in a profit guidance on Friday evening.

CDL expects its pre-tax profit to fall by 25-30 per cent from the S$13.8 million recorded in H1 last year. This is due to higher net financing costs, foreign exchange losses and lower divestment gains.

The rise in net financing costs is largely due to the absence of interest income from loans extended to and bonds issued by Sincere Property Group, which CDL had substantially impaired last year. Its exposure to Sincere Property was S$117 million as at end-June.

CDL's hotel portfolio, which includes wholly-owned Millennium & Copthorne Hotels, is expected to register an operational loss due to periodic lockdowns across numerous cities this year.

CDL's investment properties were similarly hit by the pandemic, facing lower footfalls and sustained rental rebates given to its retail tenants. The company cited Jungceylon mall in Phuket as an affected property.

It also noted that last year's H1 earnings had been lifted by a deferred tax credit of S$17.6 million, which was part of the New Zealand government's Covid-19 Business Continuity Package.

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"CDL wishes to emphasise that the overall business and financial position of the group remains healthy, with sufficient liquidity to meet its operational and financial commitments. It will continue to maintain a high level of business and financial discipline," the company said in Friday's filing.

As of end-June, it had cash and available undrawn committed bank facilities of about S$4.4 billion. Shares of CDL closed flat at S$6.76 on Friday.