UPDATE: CapitaLand 3Q19 net profit fell 8 percent on lower portfolio gains

Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.

This article was originally published on Tuesday, 5 November 2019 at 8:06 A.M. SGT; it has since been updated with more details.

CapitaLand reported Tuesday its third quarter net profit fell 7.8 percent on-year to S$333.93 million, mainly on lower portfolio gains, partly offset by higher operating profit.

Revenue for the quarter ended 30 September increased 37.1 percent on-year to S$1.73 billion, the property developer said in a filing to SGX.

The increased revenue was mainly on higher contributions from China development projects, contributions from Ascendas-Singbridge and from the multi-family portfolio in the U.S., CapitaLand said.

Profit from operations increased 36.6 percent on-year to S$941.37 million, CapitaLand said.

Portfolio gains for the quarter were S$54.3 million, down 58 percent on-year, the filing said; portfolio gains/losses include divestments, acquisitions and realized revaluation gains/losses.

“The first full quarter contribution from Ascendas-Singbridge has provided an immediate uplift to the quality of CapitaLand’s earnings,” Lee Chee Koon, group CEO of CapitaLand, said in the statement. “Fee income from the group’s REITs and funds grew by more than 30 percent year-on-year in the third quarter of 2019, tracking the increase in our REIT and fund assets under management. The strengthened recurring income will provide us with greater stability as we continue to drive growth.”

Lee noted that so far this year, CapitaLand had divested more than S$5.2 billion of assets, releasing around S$2.4 billion of net capital.

“This will enhance our financial flexibility to seize potential opportunities ahead,” he said.

Fee income from CapitaLand’s REITs and funds totaled S$86.8 million, up 35 percent on-year, the filing said.

Administrative expenses increased 42.5 percent on-year to S$155.80 million after consolidating expenses from Ascendas-Singbridge and Raffles City Chongqing and on higher depreciation expenses, the filing said.

Finance costs increased 43.7 percent on-year to S$234.37 million, CapitaLand said.

Other operating income declined 23.6 percent on-year to S$144.13 million, the filing said.

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