CapitaLand Q2 profit up 4.4% on higher contributions from investment properties

CAPITALAND Limited recorded a 4.4 per cent rise in its net profit for its second fiscal quarter, lifted by contributions from newly acquired and opened investment properties in Singapore, China and Germany, as well as revaluation gains by its portfolio investment properties.

The gains were partially offset by lower portfolio gains and contribution from the group's residential business, the real estate developer announced in a press statement on Wednesday before the market opened.

For the quarter under review, net profit for one of Asia's largest developers stood at S$605.5 million, up from the S$580.1 million the year before, on a 35.3 per cent rise in revenue to S$1.34 billion. Last year's net profit restated to reflect retrospective adjustments related to new accounting standards.

Earnings per share was 14.4 Singapore cents in Q2, up from 13.7 Singapore cents last year.

Revenue rose in the quarter on the back of higher handover of residential units in China, rental revenue from newly acquired and opened properties in Singapore, China and Germany, and the consolidation of revenue from CapitaLand Mall Trust (CMT), CapitaLand Retail China Trust (CRCT) and RCS Trust (RCST).

Century Park West in Chengdu, New Horizon in Shanghai, and Sky Habitat in Singapore were development projects which contributed to revenue for the quarter.

The Singapore and China markets accounted for 74.8 per cent of the group's revenue, up from 74.5 per cent in the year-ago period.

For the fiscal first half, CapitaLand's net profit was S$924.6 million, down 5 per cent from S$972.9 million, while revenue rose 43.8 per cent to S$2.72 billion, excluding gains from the sale of The Nassim.

Lim Ming Yan, president and group chief executive of CapitaLand Group, said: "CapitaLand continued to make solid progress in strategy execution in H1 2018. In the first six months, we divested assets worth S$3.11 billion and redeployed S$1.8 billion into new investments, exceeding our full year capital recycling target of S$3 billion. In terms of capital allocation, we remain disciplined and focused on ensuring a 50:50 balance between emerging and developed markets, while targeting an optimal mix between trading and investment properties."

The group, meanwhile, expects residential sales to moderate in the second half of this year due to increased additional buyer's stamp duty rates and tightened loan-to-value limits introduced in early July.

CapitaLand's counter was down 1.23 per cent to S$3.22 as at 10am on Wednesday, seeing heavy trading of some 7.89 million shares.