CapitaLand 1st-quarter profit falls 59%
Singapore’s softening property market has started to show up in company balance sheets.
Property giant CapitaLand reported yesterday a 59 per cent year-on-year drop in its net profit to $247.5 million in the three months ended March 31.
This was due to slower home sales and a one-off valuation gain from last year.
CapitaLand booked an unusually large $426.8 million gain in the first quarter of last year from the revaluation of the former Temasek Tower, 8 Shenton Way.
The group’s total revenue remained stable, however. Higher revenue from office and retail properties was offset by lower sales of Singapore homes, CapitaLand said.
Revenue in the first quarter fell slightly to $631.3 million from $637 million year-on-year.
Excluding the one-off gain of $426.8 million, CapitaLand’s net profit actually rose 37 percent.
CapitaLand joins rival Keppel Land in reporting declining profits, as demand for homes cools due to a change in sentiment resulting from the sub-prime crisis in the United States and removal of the local deferred payment scheme.
The company has been trying to reduce its reliance on the Singapore market, as it diversifies overseas.
Its overseas revenue in the first quarter was up 58.6 per cent at $443.8 million from a year earlier, accounting for 70.3 per cent of the group’s total revenue.
Net asset value per share rose to $3.62 as at March 31 from $3.54 as at Dec 31.
Earnings per share dropped to 8.8 cents this quarter from 21.8 cents in the previous corresponding quarter.
‘Since the turn of the year, the financial markets and global economic environment have weakened,’ chairman Richard Hu said in a statement.
‘The continuing global credit crunch would have, as expected, caused uncertainty in the general economic and business environment in Asia.’
He added that the group, however, had strengthened its financial footing and was well-positioned to ‘capitalise on any opportunities that may arise’.
CapitaLand shares closed 18 cents down at $6.79 yesterday.
Source : Straits Times - 1 May 2008
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