SOUTH-EAST Asia’s largest property developer, CapitaLand, saw its third-quarter profit fall by 26 per cent as slowing economic growth continues to hurt demand for homes in Singapore, China and Australia.
Net income fell to $419.4 million, from $563.9 million a year earlier, CapitaLand said in a statement yesterday. Revenue declined 33 per cent to $597.2 million.
“The fundamentals in the group’s core markets of Singapore, China and Australia are strong, despite the current slowdown,” chief executive officer Liew Mun Leong said in the statement. “While residential sales have slowed in these countries, a significant part of our 2008 and 2009 earnings will be from sales already achieved in 2006 and 2007.”
For the first nine months of this year, the company posted net income of $1.18 billion, 43-per-cent lower than a year earlier.
Private home prices fell 2.4 per cent in the third quarter, the first retreat since March 31, 2004, the Urban Redevelopment Authority said on Oct 24.
“Singapore’s home prices have held up quite well and have started to come off only in the last quarter,” said Mr Michael Foo, Singapore-based head of Asian portfolio management at Clariden Leu. He added: “We’re likely to see real physical prices contract further and developers may be forced to revalue their assets.”
Overseas profit before taxes and interest accounted for about 78 per cent of its earnings during the quarter, with China being the largest contributor, CapitaLand said.
The sale of its Capital Tower Beijing project in China and1 George Street in Singapore contributed to earnings during the period, the company said. That helped CapitaLand boost its cash position to $4.2 billion, enabling the company to seek opportunities for acquisitions, Mr Liew said.
Source : Today – 1 Nov 2008