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City Developments' Q2 profit down 32.8% on-year

Property developer says Singapore market remains “challenging” and it plans to focus on overseas expansion.

SINGAPORE: City Developments (CDL), Singapore’s second-largest property developer, on Thursday (Aug 14) said its second-quarter net profit fell 32.8 per cent from a year ago, mainly due to divestment gains in 2013.

Net profit for the three months ended Jun 30 was S$137.9 million, down from a restated S$205.1 million during the same period last year. The drop was due to the high base last year, when CDL booked divestment gains.

Property development was the main contributor to earnings, despite the “challenging Singapore market which was affected by several rounds of Government property cooling measures”, CDL said.

Hotel operations, primarily from Millennium & Copthorne Hotels, were the next highest contributor. Earnings were affected by factors including geopolitical events, higher hotel operating costs, an ongoing refurbishment programme and higher depreciation of the refurbished hotel assets, CDL said.

Second-quarter revenue rose by 5.9 per cent on-year to about S$861 million. For the first half as a whole, net profit came in at S$257.5 million, down nearly 25 per cent from a year ago.

The Singapore property market is experiencing “challenging headwinds”, said CDL’s executive chairman, Kwek Leng Beng. “We will accelerate our overseas expansion initiatives to supplement existing operations. CDL is looking actively in Japan and Australia and we hope to establish our platforms in these markets by the end of the year. We are also actively seeking to develop funds management products.”

CDL has declared an interim dividend of 4 cents per share.

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