CapitaLand 2nd-Quarter Profit Falls on Lower Divestments

CapitaLand Ltd., Southeast Asia’s biggest developer, said second-quarter profit slid 3.3 percent as it booked lower gains from the divestment of assets, offsetting higher home sales and shopping mall revenue.

Net income declined to S$385.9 million ($310 million) in the quarter ended June 30, from S$399 million a year earlier, it said today in a statement to the Singapore stock exchange. That’s higher than the S$187 million average of three analyst estimates compiled by Bloomberg. Sales climbed 16 percent to S$862.5 million.

“Singapore and China will remain as the group’s key markets for new investments,” Liew Mun Leong, president and chief executive officer at the Singapore-based developer, said in the statement. “The underlying fundamentals of the housing sector in the two markets remain sound, driven by new home formation, rising urbanization and growing wealth creation.”

CapitaLand said it plans to start selling more homes at its Singapore projects, the Interlace and Sky Habitat, a 509-unit suburban project designed by architect Moshe Safdie. In China, the group plans to put new units from Residences 77 in Beijing on sale, as well as its existing projects, such as The Loft in Chengdu and Dolce Vita in Guangzhou, according to the statement.

The stock rose 1.3 percent to S$3.04 at the close, the highest since April 10.

The developer will also expand its serviced apartment brand, the Ascott, in key cities in Asia Pacific and Europe, it said.

CEO Liew said in June he will retire in a year from the company he helped create almost 12 years ago.

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The developer booked a lower S$287.9 million pretax gain in the second quarter for the increase in the value of its holdings, compared with S$372.7 million a year earlier, it said. The company also recorded S$108.7 million from the divestment of two Chinese malls and other assets, which was also lower than the S$125.5 million from the sale of a Shanghai residential site and other properties a year earlier, it said.

CapitaLand’s Singapore home sales climbed to 202 units in the second quarter compared with 57 units in the previous quarter, it said. Residential sales in China more than tripled to 812 units from the first quarter.

The developer has about 2,500 homes under development and expects to sell as many as 1,000 units a year over the next two to three years, it said in its annual report. The developer’s three core markets of Singapore, China and Australia accounted for 90 percent of the group’s pretax profit in the second quarter.

CapitaLand increased its investments last year, committing a total of S$11 billion for new investments, an 83 percent increase from the S$6 billion worth of investments made in 2010.

The company’s shares were unchanged at S$3 at the close in Singapore yesterday. The stock has gained 37 percent this year, compared with the 15 percent advance in Singapore’s benchmark Straits Times Index.

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