SINGAPORE (Aug 7): CapitaLand reported earnings of $579.8 million, or 13.9 cents per share, for 2Q19, 4.2% lower compared to earnings of $605.5 million in 2Q18
The quarterly bottomline brings 1H19 earnings to $875.4 million, down 5.3% from $924.6 million a year ago.
Revenue for 2Q19 decreased by 19.3% to $1.08 billion mainly attributed to lower contributions from its residential projects in Singapore and China, partially mitigated by higher rental revenue mainly from its portfolio of properties the US and Europe acquired in 2018.
In China, the group sold 3,025 residential units with a sales value of RMB6.4 billion ($1.3 billion) in 1H19, an increase of 73% and 31% respectively compared to 1H18.
Revenue from investment properties increased 9.5% to $927.9 million.
In line with lower revenue, cost of sales also decreased 26% to $531.7 million as the proportion of rental income which had higher gross profit margin was higher in the quarter compared to the group’s development projects.
Gross profit fell 11.7% to $551 million.
Other operating income fell 16.9% to $450.9 million mainly due to absence of portfolio gains from divestment of Sembawang Shopping Center in 2Q 2018.
Administrative expenses increased 52.3% to $121.2 million mainly due to transaction costs incurred on the acquisition of Ascendas-Singbridge (ASB).
Share of results increased 14.7% to $379 million.
As at end June, cash and cash equivalents stood at $4.8 billion.
CapitaLand says it achieved 95% leasing rate for the retail component of Raffles City Chongqing ahead of its opening in September while 203 units in One Pearl Bank in Singapore have been sold since its July launch.
Some 7,300 units sold in China as at end June are expected to be handed over from 3Q19 onwards, of which 50% of the sales value is expected to be recognised over the next six months. Over 3,000 residential units in China are launch-ready.
Against a backdrop of cautious global economic outlook, CapitaLand says the enlarged group, with added asset classes and a new core market in India, will be better positioned to weather economic uncertainties and seize growth opportunities across its core business segments.
Following completion, ASB became wholly owned subsidiaries of the group and their balance sheets have been consolidated by the group as at June 30. The group expects ASB to start contributing to the group’s profit or loss from 3Q19 onwards
Shares in CapitaLand closed 2 cents higher at $3.48 on Tuesday.
