CDL more than doubles Q1 gain to S$199m; CEO joins board

Singapore

CITY Developments Limited (CDL) more than doubled its net profit to S$199.6 million for its first quarter to March 31, from S$85.3 million for the year-ago period, boosted by strong profit margins for development projects and realisation of a S$144.3 million pre-tax gain from the divestment of Manulife Centre.

Earnings per share was 22 Singapore cents, versus 9.4 Singapore cents previously. CDL shares closed down 1.61 per cent, or S$0.14, at S$8.54 on Wednesday.

Revenue dropped 29.5 per cent to S$746.2 million for Q1 2019, from S$1.06 billion a year ago. For Q1 2018, the group included revenue from The Criterion Executive Condominium in its entirety, following its completion in February 2018.

Excluding the executive condominium's contribution, Q1 2019 revenue would have increased by 6 per cent.

The property and hotel conglomerate on Wednesday appointed its group chief executive officer Sherman Kwek to the board of directors; he will assume the role of executive director from May 15. Mr Kwek is also the executive chairman of CDL China Limited.

He is the elder son of executive chairman Kwek Leng Beng and a nephew of non-executive director Kwek Leng Peck.

CDL announced separately that it has entered into deals to invest 5.5 billion yuan (S$1.1 billion) in Chinese real estate developer Sincere Property Group. The amount, which comprises share subscription and a four-year interest-bearing loan, will be finalised upon completion. CDL added that the investment is its single largest in China to date.

In addition, CDL has entered into an agreement with Sincere to acquire a 70 per cent stake in Shanghai Hongqiao Sincere Centre (Phase 2), a prime commercial property in the heart of Shanghai's Hongqiao Central Business District (CBD), for 1.2 billion yuan, equivalent to about 49,000 yuan per square metre (sq m).

China is now CDL's second-largest asset contributor (15 per cent), with the UK (14 per cent) dropping to third place. Singapore remains the largest contributor at 46 per cent.

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