CDL posts 16.3% drop in Q1 net profit

Group releasing phase 2 of New Futura this weekend; has pipeline of over 3,000 homes

Sat, May 12, 2018

Kalpana Rashiwala


New Futura is a 124-unit freehold luxury condo in Leonie Hill Road in prime District 9.

The average price for the North Tower will be higher than about S$3,350 per square foot (psf) achieved for the 62 units sold in the 64-unit South Tower, released in January 2018.

The South Tower units include a duplex penthouse, which The Business Times understands went for S$36.28 million or S$4,630 psf. The buyer of the 7,836 sq ft unit - occupying the top two levels of the 36-storey tower - is understood to be a Chinese citizen who is an executive director of a Hongkong-listed company in the beauty and healthcare business. CDL's lower first quarter bottomline was due to compressed profit margins for The Criterion executive condo (EC) in Singapore - compared with higher profit margins achieved for the year-ago period from projects such as Coco Palms, D'Nest and Suzhou Hong Leong City Center, as well as the absence of contribution from Commonwealth Towers, a joint venture project that was completed and sold last year.

The Q1 FY2018 net profit figure included a pretax divestment gain of S$29 million from the sale of Mercure Brisbane and Ibis Brisbane by the group's indirect subsidiary CDL Hospitality Trusts (CDLHT), in which the group's effective interest is 24 per cent.

The group's revenue rose 35 per cent to S$1.06 billion in Q1 FY2018 from S$783.7 million in Q1 FY2017. The increase was propelled by the completion of The Criterion EC in Q1 2018. Under prevailing accounting standards, revenue and profits are recognised in entirety upon obtaining Temporary Occupation Permit (TOP) for an EC project, CDL explained.

The group also benefitted from the maiden contribution of New Futura as well as continued contributions from Coco Palms and Suzhou Hong Leong City Center.

Earnings per share slipped 16.2 per cent to 8.8 Singapore cents for Q1 FY2018 from 10.5 Singapore cents in Q1 FY2017. CDL ended 2 Singapore cents lower at S$12.53 on Friday.

Profit before tax (including share of after-tax contribution of associates and joint ventures) from property development fell to S$80.8 million in Q1 FY2018 from S$92 million in Q1 FY2017.

Profit from hotel operations rose to S$20.8 million from S$5.1 million previously on the back of newly opened/acquired hotels such as the M Social Auckland, which opened last October and The Lowry Hotel in Manchester, which was acquired in Q2 2017.

Profit from rental properties doubled to S$61.1 million from S$28.4 million - boosted by the divestment gains from CDLHT.

Back home, CDL, together with its joint-venture associates, sold 459 units including EC units, with a total sales value of S$792.6 million in Q1 2018 - up from the Q1 2017 tally of 293 units with a total sales value of S$477.1 million.

In the first quarter, the group boosted its Singapore residential landbank with the acquisition of three sites at state land tenders - in Handy Road, West Coast Vale and Sumang Walk in Punggol

Including the Amber Park collective sale site acquired in October last year (with about 600 units planned for) and existing unlaunched projects, the group now has a pipeline of over 3,000 residential units here.

CDL also said the group has four upcoming Singapore residential property launches lined up.

Besides the North Tower of New Futura, other projects include the 190-unit joint-venture project South Beach Residences, which is expected to be soft launched in the third quarter of 2018; and the West Coast Vale project, which is planned to be launch-ready in Q4 2018).

Concurrently, CDL is working on the Amber Park en bloc site, which has received provisional permission, and plans to launch the project in the first half of next year.

CDL is also upbeat about prospects for Singapore office rentals, on the back of limited supply completion this year and a positive economic outlook.

CDL executive chairman Kwek Leng Beng said: "We will continue to seek strategic bids to bolster our local land bank but will remain highly selective and disciplined.

"In addition to organic growth, given our strong balance sheet, acquisitive growth is also on our radar and we will continue to prudently seek suitable opportunities that are synergistic with our core real estate business."