SINGAPORE: Real estate group CapitaLand reported an 89 per cent drop in its net profit in the first half of the year, due to the impact of the COVID-19 pandemic.
CapitaLand’s profit after taxes and minority interests (PATMI) for 1H 2020 was S$96.6 million, down from S$875.4 million in the same period in 2019, the company said in a news release on Friday (Aug 7).
Operating PATMI, which refers to profit from business operations excluding any gains or losses from divestments, revaluations and impairments, was S$261.2 million, a 27.7 per cent drop year-on-year.
The company’s revenue fell by 4.9 per cent year-on-year.
“This was mainly due to rental rebates of approximately S$158.6 million granted to tenants in Singapore, China and Malaysia, and lower contributions from shopping malls and residential projects in Singapore and China and the Group’s lodging business,” it said.
This decline was partially mitigated by higher handover of residential units in Vietnam and new contributions from the Ascendas-Singbridge portfolio, CapitaLand added.
In March, CapitaLand offered rental rebates to its tenants in urban and suburban malls to mitigate the impact of the COVID-19 pandemic on retailers.
READ: CapitaLand offers tenants rental rebates; retail, F&B bodies urge other landlords to follow suit
CapitaLand also announced other measures such as shorter operating hours and a one-time rental rebate of up to half-a-month for eligible tenants.
In the press release, the company also announced that its earnings before interest and tax (EBIT) fell 71 per cent to S$596.8 million in 1H 2020 as compared to a year before, with Singapore and China accounting for 74.1 per cent of the total.
“Despite the impact of COVID-19, CapitaLand still generated net cash of about S$300 million from operating activities in 1H 2020,” said Mr Lee Chee Koon, Group CEO of CapitaLand Group.
“This resilience is underpinned by our global footprint and diversified portfolio. CapitaLand’s balance sheet remains in a strong position and our long-term growth strategy is intact.”
Mr Lee added that they are actively looking for counter cyclical opportunities to strategically uplift the company’s growth trajectory and will look to “opportunistically divest non-core assets and businesses”.