CapitaMalls Drops Most in 9 Months on Earnings: Singapore Mover

CapitaMalls Asia Ltd., the retail property unit of Southeast Asia’s largest developer, fell the most in nine months in Singapore trading after fourth-quarter profit dropped 10 percent on lower valuation gains.

The shares declined 4.2 percent to S$2.08 at the close of trading in Singapore, the biggest decline since May 16. The stock gained 72 percent last year, making it the best performer on the Singapore benchmark index.

Net income slid to S$184.8 million ($149 million), or 4.8 cents a share, in the three months ended Dec. 31, from S$205.4 million, or 4.3 cents, a year earlier, the company said in a statement through the stock exchange today.

Lower fair value gains from Singapore and China, and some losses in India resulted in CapitaMalls’ profit decline in the quarter, according to the company statement.

“CapitaMalls’ core profit for the full year was below expectations due mainly to higher costs for new mall openings,” Tricia Song, an analyst at Barclays Plc, said in a note to clients today. The lower profit was mainly due to about S$12 million in opening costs for its seven new malls in China, S$3 million of losses in India and higher finance costs, according to the note.

Excluding revaluations and one-time gains, profit for the year ended Dec. 31 was S$167 million, lagging behind Barclays’s estimate of S$189 million, according to the report.

Barclays maintained its neutral rating on the stock with a price target of S$1.83, a 16 percent decline from yesterday’s closing price.

CapitaMalls has total assets of S$9.26 billion, with China contributing more than half, according to a company presentation today. Singapore accounts for 33 percent while Malaysia and Japan each make up 7 percent, the company said. China contributed to 42 percent of the company’s earnings, while Singapore’s share was at 39 percent.

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