Impairment losses took a toll on property group City Developments (CDL) in the fourth quarter, it announced yesterday.
Net profit for the three months to Dec 31 came in at $77.9 million, down 54.7 per cent on restated earnings of $171.9 million recorded in the same period a year earlier.
The results translate to earnings per share of 7.9 cents, compared with 18.2 cents in the same three months in 2017.
In addition to the final ordinary dividend of eight cents a share, the board is also recommending a special dividend of six cents a share.
CDL said profit after tax and minority interests for the quarter rose 17 per cent compared with the same period in 2017, excluding $94.1 million in impairment losses for hotels and an allowance of $20.1 million in foreseeable losses for two small-scale projects in Central London that may be leased out. This also factors in a gain from the partial divestment of CDL’s interest in two China projects in 2017.
CDL’s hotel operations segment registered a loss of $53.2 million for the quarter following major impairments, particularly in the United States, and the full closure of Millennium Hotel London Mayfair last July.
Revenue dropped 40.6 per cent to $788.3 million. Turnover in the quarter was recognised primarily from New Futura, The Tapestry and Park Court Aoyama The Tower. Gross profit fell 7.4 per cent.
CDL’s other operating income declined to $640,000 compared with $76.5 million a year ago. Other operating income comprises mainly gains from disposal of investments, investment properties, and property and plant and equipment.
The developer recorded a gain of $52 million in the fourth quarter of 2017 from the partial disposal of two China entities that held residential projects, and another $30 million from the disposal of an office building in Tokyo in September 2017.
CDL posted a net profit of $557.3 million for the 2018 fiscal year, up 6.7 per cent, as revenue rose 10 per cent to a record $4.2 billion.
Executive chairman Kwek Leng Beng said: “We are confident that when the global issues are stabilised, Singapore is well-poised to recover given its strong fundamentals. The residential property market sentiments should thereby improve with pent-up demand.
“Moreover, the group has a geographically diversified and income-stable portfolio primarily comprising residences, offices, hotels, serviced apartments, integrated developments and shopping malls, which can weather cyclical impacts and market shifts. When one segment is impacted, another class of asset can help cushion and often make up the difference.”
CDL shares closed up 0.11 per cent at $9.54 yesterday.
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