CITY Developments Ltd’s (CDL) net profit for the first half-year ended Jun 30, 2024, rose 32 per cent on the year to S$87.8 million from S$66.5 million. This comes even as the company’s revenue fell 42.2 per cent to S$1.6 billion from S$2.7 billion.
The property developer said on Wednesday (Aug 14) that H1 FY2024 revenue was lower due to weaker contributions from the property development segment.
In the first half of the previous year, revenue was boosted by full recognition of S$1 billion for the executive condominium project Piermont Grand, which obtained its temporary occupation permit in January 2023.
Meanwhile, the increase in net profit was boosted by divestment gains as part of the company’s capital recycling efforts.
Earnings per share for the half-year period was S$0.092, an increase from S$0.066 in H1 FY2023.
The board has declared a special interim ordinary dividend of S$0.02 per share for the full financial year. It will be paid on Sep 3, after the record date on Aug 21.
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This is higher than the special interim ordinary dividend of S$0.04 per share in the previous year.
Two out of three of the group’s segments recorded an increase in H1 revenue. Revenue for the investment properties and hotel operations segments rose 21.3 per cent and 10.8 per cent, respectively.
The increase in revenue for the investment properties segment was mainly due to acquisitions in 2023, such as St Katharine Docks and living sector assets across markets such as the UK, Japan and Australia.
In its property development segment, revenue fell to S$468.3 million from S$1.7 billion, due to lower profit from the company’s operating activities and higher finance costs.
However, CDL noted that it was “confident in the resilience of its Singapore property development segment, with two projects planned for launch in 2024”.
More notably, the group continued its recovery in the hospitality sector. Its hotel revenue per available room grew 3 per cent on the year to S$156 from S$151.50.
This was supported by the recent acquisition of Sofitel Brisbane Central Hotel in December and the 268-room Hilton Paris Opera for 240 million euros (S$350.2 million).
The hotel in France has a strong demand, as well as high occupancy and average room rate, the group said.
CDL’s executive chairman Kwek Leng Beng said the Hilton Paris Opera strengthened its hospitality portfolio and recurring income, while expanding the company’s presence in Europe.
Group chief executive officer Sherman Kwek added: “The real estate sector faced considerable headwinds from macroeconomic conditions and higher financing costs, impacting the group’s financial performance.”
The potential for interest rate cuts by the US Federal Reserve, however, could strengthen the group’s capital position, he added.
Shares of CDL closed 0.4 per cent or S$0.02 higher at S$5.22 on Tuesday.
