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CityDev's Q1 net profit drops 13%

Singapore's second largest developer City Developments on Wednesday posted a 13 per cent drop in first quarter net profit, hurt by the absence of gains from asset sales.

SINGAPORE: Singapore's second largest developer City Developments on Wednesday posted a 13 per cent drop in first quarter net profit, hurt by the absence of gains from asset sales.

It also warned of slower residential property sales in Singapore, but added it was "cautiously optimistic" about prospects for its global hotel business.

CityDev earned S$119.7 million in the three months ended March, down from a restated S$137.7 million in the same period a year ago.

The results include the consolidated earnings from CDL Hospitality Trusts -- which was previously treated as an associate -- so as to comply with the latest accounting requirements.

Excluding divestment gains from non-core investment properties, attributable profit after tax and non-controlling interests would have increased by 4.0 percent, CityDev said in its filing with the Singapore Exchange.

CityDev said sales of existing residential projects in Singapore that were launched last year have slowed due to property cooling measures that included a cap on the total amount of debt potential home buyers can incur.

However, the company expects well-located projects -- especially those near MRT stations that are competitively priced -- to attract reasonable buying interest.

"Understandably, the rate of sales will not be as swift as during the peaks of the property cycle," it said.

As for hotels, CityDev said conditions have improved in the United States and Europe, but are weakening in some parts of Asia due to social and political uncertainties.

CityDev is the majority shareholder of the UK-listed Millennium and Copthorne hotel group. 

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