CapitaLand Net Rises 49% on Investments, Home Sales (Update5)
By Jean Chua
Feb. 22 (Bloomberg) — CapitaLand Ltd., Southeast Asias
largest developer, said fourth-quarter profit jumped 49 percent
as property investments rose in value and the company sold more
homes in China, Australia and Singapore.
Net income rose to S$674.7 million ($478 million), or 23.1
cents a share, in the three months to Dec. 31, from a restated
S$453.5 million, or 16 cents, in the year-earlier period, the
Singapore-based company said today in a statement. Full-year
profit more than doubled to S$2.76 billion, beating the average
estimate of S$2.31 billion Bloomberg compiled from seven
analysts.
CapitaLand and rivals including City Developments Ltd. and
Keppel Land Ltd. face declining demand at home after Singapore
this month cut its 2008 growth forecast and said the city state
may fall into a recession as a slump in the U.S. erodes exports.
CapitaLand, which has properties in more than 90 cities
worldwide, has expanded in China, Malaysia and Russia, seeking
to reduce its dependence on Singapore.
“The current weakness in the U.S. housing market and
economy and the tight credit environment will likely cast a
cloudy outlook over the general economic and business conditions
for at least the first half of 2008, CapitaLand Chairman
Richard Hu said in the statement.
CapitaLand fell 9 cents, or 1.4 percent, to S$6.18 at the
close of trading. The stock has dropped 20 percent in the past
year, outpacing the 5.5 percent decline in the Straits Times
Index.
Sales, Gain
Fourth-quarter sales rose 33 percent to S$1.3 billion from
S$999 million, taking full-year sales to S$3.8 billion. In 2007,
CapitaLand gained S$472.9 million from the sale of Temasek Tower
in Singapores central business district.
The company booked an unrealized gain of S$401.6 million
for investment properties in the fourth quarter of 2007.
CapitaLands fourth-quarter profit in 2006 rose fivefold as
the company posted gains of S$163.8 million from the sale of
malls in China to a property trust it took public in December
2006.
Home sales remained the companys biggest revenue earner.
CapitaLand sold 1,430 homes in 2007 for more than S$3 billion in
Singapore, more than double the amount it earned a year earlier
by selling 954 dwellings. This year, the company plans to offer
fewer homes for sale, between 800 and 1,000, in Singapore, where
home prices may rise as much as 10 percent, CapitaLand said in a
slide presentation to the stock exchange.
`Hard to Predict
“The outlook is hard to predict, the major factor is the
Singapore property market and which way its going, said David
Lum, an analyst at Daiwa Institute of Research Singapore Pte.
“Clearly transactions have dried up. In terms of office, the
government is trying desperately to keep costs down by keeping
rentals reasonable and weve got an unclear economic outlook. So
one major driver might not be around.
CapitaLand benefited as rents at its office blocks in
Singapore doubled last year on demand from financial firms
expanding in the city state. Rents will likely climb by between
10 percent and 15 percent this year, according to the developer,
one of Singapores biggest commercial landlords.
The company is tapping growing economies overseas to
broaden its revenue base beyond Singapores market of 4.7
million people. Foreign businesses accounted for about 40
percent of 2007 earnings before interest and tax, with China
making up 23 percent of pretax earnings.
CapitaLand is also expanding in Australia, where it agreed
to set up a venture with AustraLand Property Group to build and
manage industrial properties in Asia. CapitaLand will own 51
percent of the venture and Sydney-based Australand will own the
other 49 percent, the companies said in statements today.
Temasek Holdings Pte, Singapores sovereign wealth fund, is
the biggest shareholder in CapitaLand, with a 40 percent stake.
CapitaLand owns 54 percent of AustraLand.
AustraLand shares fell 0.5 percent to A$1.84 at the 4:10
p.m. close of trading in Sydney.
To contact the reporter on this story:
Jean Chua in Singapore at
