Westgate Tower sale helps CapitaLand Q4 profit to rise 187 per cent

Profit from the $579.4 million sale of Westgate Tower helped CapitaLand achieve a 187 per cent surge in fourth-quarter earnings to $409.4 million.

Net profit for the full year ended Dec 31 came in at $1.16 billion, up 38.2 per cent from a year back.

Despite the sterling bottom line, CapitaLand suffered markedly weaker sales in China, its main market apart from Singapore.

"Despite the challenges in the market, CapitaLand has done relatively well. We have been able to deliver most of the numbers and outcomes we were hoping for at the beginning of the year," said president and chief executive Lim Ming Yan at yesterday's results briefing.

Revenue for the fourth quarter rose 67.2 per cent to $1.52 billion, owing mainly to recognition of the sale of office strata units in Westgate Tower.

The group also recorded higher revenue in its shopping mall and serviced residence businesses and development projects in Singapore. The increase was partially offset by fewer handover of units from development projects in China, CapitaLand said.

Revenue for the year rose 11.8 per cent to $3.92 billion, with Singapore accounting for 54.7 per cent of overall revenue and China 22 per cent.

Revenue from CapitaLand Singapore rose 71.6 per cent to $368.9 million for the quarter, owing mainly to the Westgate Tower sale, and rose 0.3 per cent to $1.24 billion for the year.

But revenue from CapitaLand China fell 20.9 per cent to $231.8 million for the quarter and was down 29.1 per cent to $637.5 million for the year.

CapitaLand China sold 1,673 residential units in the quarter, down from 1,902 units a year back. For the full year, it sold 4,961 units, down from 7,688 a year earlier.

It also handed over fewer units. Revenue was lower for the 2014 financial year as units handed over previously were from projects with higher average selling prices, in particular The Paragon, it said.

Fourth-quarter earnings per share were 9.6 cents, up from 3.3 cents a year earlier. Net asset value per share was $3.94 as of Dec 31, up from $3.79 a year earlier.

Revenue from subsidiary CapitaMalls Asia surged 256.7 per cent to $656.5 million for the quarter and rose 83.8 per cent to $1.18 billion for the year, thanks to its share in Westgate Tower, higher contribution from Bedok Mall and Westgate mall, and improved performance from malls in China.

Revenue from another unit, The Ascott, rose 7.5 per cent to $176.6 million for the quarter, and increased 7.6 per cent to $682.9 million for the year. The rise was mainly from newly acquired properties in China and Japan, and newly opened properties in Europe.

Mr Lim yesterday alluded to CapitaLand's scale - with managed real estate assets of $70.6 billion and revenue under management of $8.7 billion - noting that it "allows us to look at various opportunities".

"We have significantly simplified the organisation and the major pieces are in place... We can respond fast to market opportunities."

CapitaLand has cut its nine listed entities down to six. Whereas previously it had three treasury vehicles, it now has just one funding platform for better economies of scale.

CapitaLand chief financial officer Arthur Lang said yesterday that the group intends to grow its assets under management via its funds, and is targeting another four or five funds or joint ventures by 2017 or 2018, on top of 16 now.

CapitaLand yesterday proposed a first and final dividend of nine cents, up from eight cents a year back. Its shares closed four cents higher at $3.63 yesterday.

wrennie@sph.com.sg

At a glance

Revenue: $3.92 billion (+11.8 per cent)

Net profit: $1.16 billion (+38.2 per cent)

Dividend per share: 9 cents (+12.5 per cent)

This article was first published on Feb 18, 2015.
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