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City Developments posts higher Q4 profit, driven by asset monetisation
REAL estate developer and hotel owner City Developments (CDL) reported a net profit of S$410 million for its fourth quarter ended Dec 31, 2015, up 6.6 per cent from S$385 million a year ago.
Revenue was up one per cent to S$855 million from S$847 million a year ago.
The higher profit was driven by the monetisation of the group's prime office assets 7 & 9 Tampines Grande, Manulife Centre and Central Mall (Office Tower) through a second Profit Participation Securities investment platform (PPS 2) in December 2015.
For the full year, net profit was up 0.5 per cent to S$773 million while revenue fell 12.2 per cent to S$3.3 billion.
Contributors to full-year profit before tax of S$985 million were its property development (S$356 million) and rental properties (S$460 million) segments, the latter segment benefiting from the gain arising from PPS 2.
However, profit before tax from hotel operations fell to S$171 million in 2015 from S$333 million in 2014. The hotel business had been affected by global uncertainty due to falling commodity prices, terrorism, health advisory travel alerts and worries over China's growth, CDL said.
Looking ahead, CDL said an air of caution prevails over the global economy, and the group has been "cognisant of the storm that has been brewing" and is focused on expanding overseas and growing its funds management platform.
It re-entered the Australian residential property sector late last year, while its China subsidiary is making "very strong progress" on its four China projects with sales launched in two out of the four, CDL said.
A final dividend of eight cents per share and a special final dividend of four cents per share were declared, similar to a year ago.
Net asset value per share was up to S$9.89 at end-2015 from S$9.25 at end-2014.
CDL last traded at S$7.04.