City Developments Profit Falls 13% on Lower Property Sales
City Developments Ltd. (CIT), Singapore’s second-largest developer, posted a 13 percent decline in first-quarter profit on lower divestment gains from property holdings.
Net income fell to S$119.7 million ($96 million) in the three months ended March 31, from S$137.7 million a year earlier, as sales slid 5.4 percent to S$734.2 million, the developer said in a statement to the stock exchange today. Profit from sales of investment properties dropped to S$1.2 million from S$31.5 million in the same period a year ago, according to the statement.
City Developments, which hired Grant Kelley from Leon Black’s Apollo Global Management LLC as chief executive officer earlier this year, is seeking to expand overseas amid declining demand in Singapore. Home sales in the city-state fell to a three-month low in March following the government’s tougher housing curbs that led to first-quarter private residential prices declining the most in five years, government data showed.
“The Singapore residential market is expected to be cautious with moderated volumes,” City Developments said in a statement today. “During this subdued state coupled with the uncertainty of the global economic landscape, the group has taken deliberate efforts to put in place some longer term strategies” such as overseas expansion.
City Developments started marketing its Commonwealth Towers project this month, selling 66 percent of the 400 units released for sale from the total 845 units, the company said. The developer will start selling its 944-unit Coco Palms project later this month, it said.
The shares rose 0.2 percent to S$10.8, while the benchmark Straits Times Index added 1.1 percent. The company reported earnings after the close of trading.
Singapore’s first-quarter home prices declined for a second consecutive quarter as tighter mortgages cooled demand in Asia’s second-most expensive housing market. An index tracking private residential prices fell 1.3 percent in the three months ended March 31, a government statement showed on April 25.
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