NRA Capital Pte Ltd

Written by: NRA Team

Tuesday 6 Aug 2013

City Developments Ltd - 2Q13 news release

CDL delivers strong performance with profit up 48% yoy for 2Q13

Declares special interim dividend of 8.0 cents per ordinary share

Key highlights:
  • Achieved sterling performance with profit up 48.0% for Q2 2013.
  • No revaluation surpluses on investment properties and hotels (including CDL Hospitality Trusts).
  • No profit recognition from fully sold Executive Condominiums (ECs) until completion of construction, in accordance with prevailing accounting treatment.
  • Strong balance sheet with cash and cash equivalents of $2.5 billion as at 30 June 2013.
  • Healthy net gearing ratio at 22% (excluding any revaluation surpluses for investment properties) and interest cover at 15.0 times for 1H 2013.
  • Special interim ordinary dividend of 8.0 cents per ordinary share.

 

Commenting, Mr Kwek Leng Beng, CDL Executive Chairman said: 
 
“The global economy remains fragile and unpredictable. Domestically, with the latest round of property cooling measures which has been the most effective to date, the Group expects stronger headwinds in the second half of the year. Transaction volume for private residential sales is beginning to be more measured and prices in general are expected to be moderated for the mass market segment, due to the tightening of bank borrowings. 
 
Many home buyers who see the current high bidding at land tenders are likely to perceive that property prices will rise even higher. This psychology of buyers far outweighs the fundamentals of supply and demand. In general, people want to buy low and sell high. However, my observation is that as property prices move upwards, more people want to buy in. Conversely, as prices start declining, people become fearful and cautious in buying property. This “herd instinct” may distort market perception and all industry stakeholders should consider this paramount factor in their decision making. 
 
The Group has already established various synergistic platforms to grow its business. In Singapore, it has earned a strong reputation in property development and an enviable portfolio of valuable investment properties. Regionally and globally, it has an established hotel operations and a hotel real estate investment trust (REIT) whose potential can be further exploited. 
 
The Group will continue to focus on developing its existing overseas growth engines, which includes an ever expanding China platform, with developments through CDL China and FSCL (M&C’s associate) and also its latest real estate development arm in London. The Group also has plans to be more active in private equity opportunities which it entered into some years ago. The execution of some of these platforms will take time to develop. These engines, when in full swing, will enable the Group to achieve a balanced and diversified portfolio in Singapore and abroad.” 
 
 


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