CDL braces for substantial FY2023 profit drop on lack of significant divestment gains

CITY Developments Ltd (CDL) expects a substantial drop in attributable profit for its 2023 financial year ending Dec 31, as no significant divestment gains were made in the year, the property giant said on Thursday (Dec 21).

Stating this in a profit guidance ahead of the February 2024 release of its unaudited financial results for the second half, CDL noted that the lack of significant divestment gains was intensified by higher financing costs. Nevertheless, the group added, it expects to remain profitable for FY2023 as its overall business performance as well as core operating earnings have not been significantly affected compared with the previous financial year.

CDL meanwhile said that it had provided for impairment losses for its investment properties in the United Kingdom in the first half and will continue to review its portfolio of properties for impairment review.

“The group is in the process of finalising valuations on its portfolio of properties as at Dec 31, 2023,” it stated.

Interim financial statements released for the first half ended Jun 30 had revealed that the group achieved lower net profit after tax and non-controlling interest of S$66.4 million, compared with S$1.1 billion seen in H1 FY2022.

The drop in profit was attributed to the absence of substantial divestment gains as well.

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And when giving its third-quarter operational update, CDL had said that the global economic outlook remains highly vulnerable to macroeconomic sensitivities, including persistent inflation, a high interest rate environment and geopolitical tension.

Shares of CDL closed up 0.8 per cent, or S$0.05, at S$6.41 before the announcement on Thursday.