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Capitaland Posts 10.1% Profit Growth In 1H13; Plans For Bigger Projects
Corporate Digest | 26 July 2013
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By: Wilfred Ng
Articles (6) Profile

Capitaland reported a 10.1 percent growth in its profit after tax and minority interest to $571.3 million for the six month ended 30 June 2013. The jump is attributed to higher contributions of its four strategic business units – CapitaLand Singapore, CapitaLand China, CapitaMalls Asia and The Ascott, which lifted its revenue up by 22.7 percent to $1.8 billion. Notably, a one-time loss of $27.7 million incurred for the repurchase of convertible bonds, impeded the profit growth to an otherwise 15.4 percent to $599 million.

Despite news coverage of China’s slowdown, Capitaland’s confidence in its presence in China remains unwavering. Given its current portfolio’s exposure in China at 40 percent, Capitaland reiterated that it would increase it to 50 to 60 percent if opportunities present.

In the analysts and media briefing, Capitaland highlighted its investment strategy with Singapore and China viewed as its core markets.  Under the geographical location performance, the two core markets represented 77.4 percent of the earnings before interest and taxation in 1H13, with Singapore and China recording 4.9 percent and 30.7 percent growth from 1H12 respectively.

The outlook of Capitaland remains positive as it moves toward bigger scale projects such as the mixed development of Danga Bay in Iskandar, and Hanzhonglu Site in Shanghai. In addition, Captialand’s balance sheet remains healthy with its gearing standing at 0.45 and a good cash balance of $5.2 billion, including reserves made for repayment of its maturing debt.

However, a point to note would be the increasing debt exposure to flexible interest rate from 23 percent in FY12 to 28 percent in 1H13. In view of the liquidity tightening policy in China, the property cooling measures in Singapore and possible tapering of quantitative easing in September, the volatility of interest rate may weigh on Capitaland’s earnings going forward.

CapitaLand  3.580 +0.02 +0.56%   
Business: Co develops, owns, and manages real estate properties. [FY18 Geographical] China (41.2%), S'pore (38.5%), Europe & others (18.6%), Vietnam & Others (1.7%).

Insight: Apr-19, 1Q19 revenue fell 23.8% while net profit d... Read More

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