CityDev Q4 net profit up 41%; optimistic outlook

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http://www.businesstimes.com.sg/sub/...27584,00.html?

February 24, 2011, 8.05 am (Singapore time)

CityDev Q4 net profit up 41%; optimistic outlook


SINGAPORE - City Developments, Southeast Asia's second-largest property firm, posted on Thursday a 41 per cent rise in fourth quarter net profit and said it was optimistic about prospects.

CityDev, which owns 53 per cent of London-listed hotel operator Millennium & Copthorne, said net profit rose to S$249 million (US$195 million) in October-December from S$177 million a year ago, helped by higher contributions from offices and hotels.

This was slightly lower than an average estimate of S$256 million by three analysts surveyed by Reuters.

CityDev, controlled by the family of Singapore tycoon Kwek Leng Beng, recommended a special ordinary dividend of 10 Singapore cents per share in addition to the ordinary dividend of 8 cents per share.

Larger rival CapitaLand reported a net profit of S$522.1 million on Tuesday, 41 per cent lower than S$885.7 million a year ago.

CityDev does not book gains from the revaluation of its portfolio as profit unlike CapitaLand so their results are not directly comparable.

CityDev said positive sentiments riding on Singapore's forecast GDP growth of 4-6 per cent this year will bolster sentiment and increase confidence across all business segments. -- REUTERS

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http://www.businesstimes.com.sg/sub/...27668,00.html?

Published February 25, 2011

CityDev reports 41% gain in Q4 earnings

Full-year profit also increases by 26% to $749m from $593.4m in 2009

By UMA SHANKARI


CITY Developments yesterday said that net profit in the quarter ended Dec 31, 2010 climbed 41 per cent to $249.2 million from $176.7 million a year earlier.

Earnings per share jumped 43 per cent to 26.7 cents from 18.7 cents.

Revenue, however, fell 25 per cent to $691 million from $922.4 million in Q4 2009.

The company, which is Singapore's second-largest property group by market capitalisation, plans to pay out a special dividend of 10 cents per share in addition to the ordinary dividend of 8 cents per share. This represents a dividend payout ratio of 22 per cent.

Last year, CityDev paid out 8 cents per ordinary share.

The group's earnings rose even as revenue fell as it recorded gains from selling some of its non-core commercial and industrial properties in Q4 2010.

It sold all strata units in Chinatown Point, several strata units in GB Building, and Pantech 21 in line with its ongoing strategy of reviewing its current asset portfolio 'to unlock shareholders' value at the opportune time'.

Full-year net profit increased by 26 per cent to $749 million in 2010 from $593.4 million in 2009, beating the $686 million average estimate of 24 analysts surveyed by Bloomberg.

Revenue for the whole of 2010 slipped by 4 per cent to $3.1 billion from $3.3 billion in 2009.

'Going forward, homebuyers, sellers and developers will take time to review the impact of the latest property measures,' CityDev said in a statement, referring to the last round of government measures to cool the market announced on Jan 13.

Prices are likely to remain steady but sales volume will fall in the short term, the company said. But new projects which are 'well-located' and 'with good access' will still see reasonable response with the right pricing, CityDev added.

The group plans to market 580 homes across four residential projects in the first half of 2011. In 2010, it sold 1,559 homes worth $2.1 billion in total.

Citigroup yesterday upgraded its call on CityDev to a 'buy' from a 'hold' after the results announcement.

The group looks well-positioned to capitalise on any opportunities which might arise, said analyst Wendy Koh.

'With its successful residential sales in last few years and recent divestment of non-core assets, CityDev's net debt to equity ratio is at its lowest at just 20 per cent after taking into account fair value gains on investment properties. The group has an outstanding cash balance of $1.9 billion,' she said.

However, JP Morgan kept its 'neutral' call on the stock, while Morgan Stanley maintained its 'equal-weight' rating.

It is 'too early to get excited', cautioned Morgan Stanley analysts.

'With further policy risk a persistent overhang, and our expectation that residential prices could decline by 5-10 per cent in 2011, we see limited positive catalysts,' said analysts Brian Wee and Wilson Ng in a report.

CityDev shares gained 22 cents or 2 per cent to close at $10.92 yesterday.