CapitaLand Investment (CLI) has reversed into the black with earnings of $762 million in the 2HFY2021 ended December, from the $461 million loss recorded in the corresponding period the year before.
Earnings for the FY2021 stood at $1.67 billion, from the $146 million loss in the FY2020.
Earnings per share (EPS) on a fully diluted basis for the 2HFY2021 and FY2021 stood at 15.1 cents and 37.6 cents respectively.
Revenue for the 2HFY2021 grew 26.2% y-o-y to $1.24 billion, thanks to higher contribution from both the fee income-related business (FRB) and real estate investment business (REIB). The higher FRB revenue was mainly driven by higher transactional fees from the listed REITs and private funds, as well as higher base management fees.
The higher REIB revenue can mainly from acquisitions, higher occupancy from an office building in Singapore, as well as 79 Robinson Road, which began operations in the 2HFY2020. Lodging properties also contributed to the REIB revenue as travel restrictions eased in certain parts.
The increase was partially offset by the divestment of assets in Japan, Korea, Singapore and China as well as lower contribution from retail malls in Malaysia.
Cost of sales increased 22.5% y-o-y to $691 million in line with the higher revenue for the 2HFY2021.
Gross profit grew 31.0% y-o-y to $553 million in the half-year period.
2HFY2021 other operating income increased 62% y-o-y to $444 million, mainly due to fair value gains from investment properties. This was partly offset by lower portfolio and foreign exchange gain, as well as lower pre-termination of contracts, forfeiture of deposits and government grants.
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The higher interest income in 2HFY2021 mainly came from a short-term investment in notes while foreign exchange gain in the 2HFY2021 rose mainly from the revaluation of RMB and USD receivables.
Profit from operations stood at $327 million compared to loss from operations at $453 million.
Share of results of associates surged 46.9 times to $610 million from $13 million the year before, mainly attributable to the gains on revaluation of investment properties as CLI recorded fair value losses in the same period the year before.
Share of results of joint ventures stood at $167 million from a $153 million loss due to gains on revaluation of investment properties.
As at end-December, cash and cash equivalents stood at $3.82 billion.
The board has proposed a dividend of 15.0 cents per share, which comprises an ordinary dividend of 12.0 cents and a special dividend of 3.0 cents for the FY2021.
“Despite a challenging macroeconomic environment, CLI achieved creditable all-round performance for FY 2021 and its stock price has outperformed benchmark indices since its listing on Sept 20, 2021,” says Miguel Ko, chairman of CLI.
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“This underscores market recognition of CLI’s resilient and diverse global portfolio, operating expertise and disciplined capital recycling. CLI is well-positioned to support the growth of its investment vehicles given its strong balance sheet and its ability to tap on CapitaLand Development as another pipeline source of assets,” he adds.
“With a strong first set of results, CLI has embarked positively on its journey in becoming a leading global real estate investment manager (REIM) which delivers high quality returns. We will strive to achieve sustainable double-digit ROE by continuing to prioritise growing our fund and lodging management platforms and continuing to invest in our operating platforms,” says Lee Chee Koon, CEO of CLI.
“As part of our growth strategy, we will focus on expanding and diversifying our investor base and network of international partners as we scale up our private equity business, tap new fundraising channels and launch new funds, even as we remain disciplined in our portfolio reconstitution and capital recycling strategies,” he adds.
In light of the Russia-Ukraine conflict, Lee says the group will “closely monitor developments”. He adds that CLI is “cautiously optimistic” that its “experience and track record in Asia will enable us to deploy capital into attractive opportunities in our core and focus markets, particularly in China, where we believe the ongoing challenges in China’s real estate market will present interesting investment themes.”
CLI says it is on track to achieving its $100 billion target in funds under management (FUM) by 2024.
Shares in CLI closed 13 cents lower or 3.46% down at $3.63 on Feb 24.
Photo: CLI
