City Developments reports 1Q19 net profit more than doubled on strong margins, divestment

City Developments building and Lau Pa Sat food court in Singapore’s central business district (CBD); taken October 2018.City Developments building and Lau Pa Sat food court in Singapore’s central business district (CBD).

City Developments reported Wednesday its first quarter net profit jumped 133.8 percent on-year to S$199.56 million on strong profit margins for development projects and a gain from the divestment of Manulife Centre.

Revenue for the quarter ended 31 March fell 29.5 percent on-year to S$746.16 million, the property developer said in a filing to SGX before the market open.

That was due to the year-ago recognition of revenue in entirety form The Criterion Executive Condominium after its completion in February 2018, City Developments said, adding that excluding the project, revenue for the first quarter of 2019 would have risen by 6 percent.

In Singapore, executive condominiums (EC) are a hybrid public-private housing segment. For ECs, the entire revenue from units sold is only recognized upon receiving the temporary occupation permit (TOP), the company said.

For the first quarter of 2019, revenue was largely recognized from the New Futura, Gramercy Park and The Tapestry projects, it said, adding those developments had higher profit margins compared with The Criterion.

The Manulife Centre divestment contributed a S$144.3 million pre-tax gain, it said.

In addition, City Developments said it saw higher rental income from recently acquired properties, including Aldgate House and 125 Broad Street in the U.K. and Central Mall and Le Grove Serviced Residences in Singapore.

The share of after-tax profit from joint ventures jumped to S$33.53 million from S$2.76 million in the year-ago quarter on contributions from from South Beach Residences, launched in the third quarter of 2018, along with returns recognized from the sale of units in the Ivy and Eve project in Australia, City Developments said.

In Singapore, the company and its joint-venture associates sold 173 residential units with a total sales value of S$516.3 million, compared with 459 units with a sales value of S$792.6 million in the year-ago quarter, the filing said.

“Our recent successful residential launches in Singapore indicate healthy demand for well-located projects that are exceptionally designed and sensitively priced,” Kwek Leng Beng, City Developments’ executive chairman, said in the statement.

Kwek pointed to a launch pipeline of around 2,250 units, across the EC, mass-market, mid-tier and high-end segments.

“We are confident that our new projects will generate strong interest due to their unique selling propositions and good locational attributes,” he said. “While Singapore will always remain our home ground, our overseas efforts have borne fruit and provided much needed diversification to our earnings.”

The company declared a dividend of 1.94 Singapore cents per preference share, unchanged on-year.

 

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