CapitaLand’s board raises dividend payout ratio on S$1.6 billion loss

• CapitaLand Limited's (SGX: C31) share price traded flat on Wednesday (24 February)
• The property group posted a net loss of S$1.57 billion for the 2020 financial year earlier in the day
• This represented a 26% decline from FY2019’s profit of S$2.14 billion
• Nevertheless, the board proposed a final ordinary dividend of S$0.09 a share, equating to 52% of cash PATMI
• Trade CapitaLand shares, long or short, with a live or demo IG account

CapitaLand sees red for FY2020

CapitaLand recorded a net loss of S$1.57 billion for the 2020 financial year against a profit of S$2.14 billion the year before, it revealed in its latest financial results on Wednesday (24 February 2021).

The results are in line with a profit guidance provided on 22 January 2021.

The property developer attributed the 26% decline to a revaluation of investment properties, and impairment of projects and equity investments totalling S$2.5 billion.

The group’s share price remained flat as at 15:30 SGT on the same day.

FY2020 results in detail

Meanwhile, operating profit after tax and minority interests (PATMI) for FY2020 came in at S$769.9 million, 27.2% lower year-on-year.

Revenue rose 4.8% year-on-year to S$6,532.6 million, mainly due to higher handover from the residential projects in China and Vietnam, as well as full year consolidation of results for Raffles City Chongqing and the Ascendas-Singbridge (ASB) portfolio acquired in June 2019.

The increase, however, was partially offset by the recognition of rental rebates granted to tenants, as well as lower performance from the group’s shopping malls and lodging businesses amid Covid-19. Collectively, Singapore and China accounted for 76.4% of CapitaLand’s revenue.

Finally, earnings before interest and taxes (EBIT) for FY2020 fell 95.4% year-on-year to S$231.5 million. This was primarily due to revaluation losses from investment properties, impairment of residential projects and investments, lower gains from asset recycling, as well as lower contribution from retail and lodging operations as a result of the pandemic.

CapitaLand proposes final dividend of S$0.09

The board of directors has proposed a final ordinary dividend of S$0.09 a share for FY2020, which corresponds to a total dividend payout of S$467.4 million.

This dividend sum, if approved by shareholders, represents a dividend payout ratio of about 52% of FY2020’s cash PATMI. This is above the 41% average of the previous four financial years.

The proposed amount is also 25% lower than FY2019’s total dividend payout of S$0.12 a share.

The payout, although lower than in 2019, ‘underpin our continuing ability to distribute returns to our shareholders’ and the company’s profitability despite a ‘challenging 2020’, said Mr Ng Kee Choe, Chairman of CapitaLand Limited.

Mr Lee Chee Koon, Group CEO of CapitaLand Group, was equally optimistic. ‘Not only will CapitaLand’s strong balance sheet and cashflow position tide us through the ongoing Covid-19 pandemic; more importantly, we will be able to capitalise on new opportunities to further transform our business,’ he said.

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