SINGAPORE - City Developments Limited (CDL) posted a 94.1 per cent drop in net profit to $66.5 million for its first half ended June 30, from $1.1 billion in the previous corresponding period.
This was mainly due to the absence of the significant divestment gains booked in the first half of 2022, as well as greater financing costs and impairment losses for its British investment properties in the latest period, said the property developer on Thursday.
The divestment gains from the first half of 2022 included those from the sale of Millennium Hilton Seoul and its adjoining land site, as well as the gain from the deconsolidation of CDL Hospitality Trusts (CDLHT) from the group after the distribution in specie of CDLHT units.
Earnings per share stood at 6.6 cents for the first half, down from $1.227 the previous year.
Revenue for the first half of 2023 rose 83.6 per cent to $2.7 billion, from $1.5 billion a year earlier.
This was due to strong contributions from its property development segment, as well as improvements from its hotel operations segment and investment properties.
The property development segment was the largest contributor, with a 183.2 per cent increase to $1.7 billion, largely due to the fully sold Piermont Grand executive condominium (EC).
The EC received its temporary occupation permit in the first half of 2023, allowing its revenue and profit to be recognised in its entirety upon completion under the current accounting policies for ECs.
Revenue from CDL’s hotel operations segment also rose by 12.4 per cent to $672.9 million, as revenue per available room (RevPAR) grew across all regions amid the recovery in international travel.
Global RevPAR stood at $151.50 for the first-half period, up 42.7 per cent from the same period in 2022.
The group enjoyed strong recovery in the Asia and Australasia regions, while the Europe and the US markets continued to grow.
The addition of investment properties to the group’s portfolio, including St Katharine Docks in central London and two Osaka assets, also contributed to the revenue increase.
CDL group chief executive Sherman Kwek said: “The record profit performance last year, driven by significant divestments, provided us with the significant cash to make strategic acquisitions that would add value to our portfolio.”
He noted that the group is focused on capital recycling and asset portfolio optimisation.
Finance costs widened to $220.6 million from $99.5 million previously, mainly as a result of higher interest expenses and a fair value loss on financial derivatives booked in the first half, as opposed to a gain registered in the previous year.
Impairment losses of $33.5 million from British investment properties contributed largely to the increase in the group’s other operating expenses for the first half.
An interim dividend of four cents per share was declared, down from 12 cents previously.
It will be paid on Sept 5, after the record date of Aug 21.
Shares of CDL closed down 1.8 per cent, or 13 cents, at $6.99 on Thursday.
