CapitaLand posts 71.2% increase in net profit in Q4, full-year net profit up by 12.3%

Real estate firm CapitaLand Limited posted its highest net profit record since 2008 for the financial year of 2018, while its fourth quarter net profit came in 71.2% higher than a year ago, boosted by strong income from properties and higher gains from asset recycling and revaluation of investment properties, the group said on Wednesday.

Its full-year net profit was up by 12.3% compared to a year ago, at S$1.8 billion. The improved earnings were supported by stronger recurring income from newly acquired and operational properties, higher contributions from residential projects in China and Vietnam, and higher gains from asset recycling and revaluation of investment properties, CapitaLand said.

CapitaLand’s fourth quarter net profit was at S$475.7 million, higher than the S$277.8 million recorded in the same period a year ago, boosted by a better operating performance, and similarly, higher gains from asset recycling and revaluation of investment properties.

Operating profit for the fourth quarter improved by 26.1% to S$213.8 million due to higher contributions from residential projects in China, as well as newly acquired and operational properties, CapitaLand said.

Amid the challenging economic and market environment, CapitaLand has achieved ‘good results’, commented Mr Ng Kee Choe, chairman of CapitaLand Limited. He said the group’s achievement is due primarily to CapitaLand’s diversified asset base, disciplined approach in asset recycling and capital allocation, and operating expertise.

CapitaLand's share price gained 1.18% or S$0.04 to S$3.43 by mid-morning on Wednesday.

Full-year revenue up by 21.3%

The group’s return on equity (ROE) for the financial year of 2018 grew to 9.3% from 8.6% a year ago.

Revenue for the full-year increased by 21.3% to S$5.6 billion. The growth in sales came from higher contributions from newly acquired and operational properties in Singapore, China, Germany, and the United States (US), higher handover of units from residential projects in countries such as China and Vietnam, as well as the consolidation of revenue from CapitaLand Mall Trust (CMT), CapitaLand Retail China Trust (CRCT) and RCS Trust (RCST).

For the full-year, CapitaLand achieved an earnings before interest and tax (EBIT) of S$4.1 billion, 25.5% higher compared to the previous financial year. The key contributors to EBIT remain the Singapore and China markets, accounting for 89.2% of total EBIT.

The group is proposing a final ordinary dividend of 12 Singapore cents a share for the financial year of 2018.

CapitaLand seeking out new growth drivers

The group will look for new growth drivers to bring it into the next phase of growth, while it continues to work on its existing business and asset portfolio, said Mr Lee Chee Koon, president and group chief executive of CapitaLand Group.

Mr Lee mentioned the proposed acquisition of Ascendas-Singbridge, a move which is slated to create Asia’s largest diversified real estate group with assets under management (AUM) of over S$116 billion.

‘The transaction will strengthen our presence and pipeline in our core markets – Singapore and China. It will give us immediate scale in new economy sectors such as logistics and business parks, and in growth markets such as India, the US and Europe,’ he said.