City Developments Profit Margin Climbs
City Developments, one of Singapore’s biggest property developers, reported first half net profit dipped 0.4 percent to SGD 256.5 million for the first six months ended June 30th from SGD 257.5 million in the same time period of the year before, the company said a filing to the Singapore Stock Exchange.
Other operating income comprises mainly management fee, miscellaneous income and profit on sale of investments, investment properties and property, plant and equipment- increased by SGD 5.6 million to SGD 6.5 million for second quarter of 2015 when compared SGD 0.9 million same time period last year. And the operating income went up SGD 5.1 million to SGD 7.3 million for first half of 2015. The company attributes the increase to primarily realization of investments in a private real estate fund.
Revenue decreased by SGD 58.2 million to SGD 268.8 million for the second quarter for the company's property development sector, when compared with SGD 327 million last period last year. For the first half, revenue slipped SGD 17.0 million to SGD 567.4 million for property development sector.
Revenue for hotel segment remained relatively constant at SGD 421.7 million for the second half and increased by SGD 27.6 million to SGD 797.6 million for the first half. The developer attributed this increase primarily to contributions from the 5 hotels acquired in 2014 by the company - the Chelsea Harbour Hotel, Novotel New York Times Square, Grand Hotel Palace Rome, Hotel MyStays Asakusabashi and Hotel MyStays Kamata, coupled with better perfromance from refurbished hotels as well as hotels in Australasia, particularly New Zealand which benefited from increased visitors from Asia and higher airline capacity into this country. This was however partially offset by reduced contribution from Singapore hotels as a result of increased room supply in the country, lower visitor number, strong Singapore dollar relative to other Asian currencies which affect the recovery of visitor number as well as absence of contribution from Cityview Place Holdings which owns W Singapore – Sentosa Cove following the firm’s loss of control in this subsidiary in December 2014. Pre-tax profit remained relatively stable at SGD 68.9 million for the second quarter 2015 and SGD 102.6 million for the first half.
CDL China Limited, a wholly-owned subsidiary of the company, continues to push forward with its four China projects. Eling Residences, a 126-unit luxury development located at the peak of Eling Hill in Yuzhong district, Chongqing, has completed all structural works and sales launch is anticipated in Q4 2015. City Development's Suzhou Hong Leong City Center (HLCC), in China's Suzhou Industrial Park (SIP) district has launched Tower 1, a 462-unit residential tower and Tower 3, an 899-unit SOHO tower. The decision made to accept sales for Tower 1 in August resulted strong sales momentum in June and July despite the overall muted sentiment in the luxury residential sector in China, making HLCC the topselling luxury residential project in SIP in 2015.