SINGAPORE: Real estate developer CapitaLand said on Wednesday (Feb 20) that its full-year net profit jumped 12.3 per cent, helping the company log its highest annual profit in a decade despite a challenging economic and market environment.
Net profit came in at S$1.76 billion last year, up from a restated S$1.57 billion in 2017. This marks its highest net profit since 2008.
Full-year revenue rose 21.3 per cent to S$5.6 billion.
Shares in CapitaLand rose as much as 1.8 per cent to S$3.45, their highest since Aug 31 last year, before ending the day up 1.2 per cent at S$3.43. The counter has risen 9 per cent this year.
CapitaLand's full-year earnings were bumped up by a 71.2 per cent increase in net profit in the fourth quarter, as well as higher contributions from its trading business in China and Vietnam and higher recurring income from investment properties.
CapitaLand also attributed its performance to higher gains from its strategy of active portfolio reconstitution, which involves selling off its assets and investing the proceeds elsewhere.
“CapitaLand has achieved good results amidst a challenging economic and market environment," said CapitaLand chairman Ng Kee Choe.
The company's CEO Lee Chee Koon said it will continue to seek out new growth drivers to bring CapitaLand into "the next phase of growth".
Part of that plan is the proposed acquisition of Ascendas-Singbridge from Temasek in an S$11 billion deal.
The deal marks one of the biggest consolidations in Singapore's fragmented real estate investment trust sector, in which some segments, like retail, face increased challenges, partly due to the onslaught of e-commerce.
Analysts had said after the announcement last month that the deal will help CapitaLand diversify and give it a footing in new markets.
Mr Lee said in a press release on Wednesday that the transaction will help CapitaLand strengthen its presence and pipeline in its core markets of Singapore and China.
"It will give us immediate scale in new economy sectors such as logistics and business parks, and in growth markets such as India, the US and Europe," said Mr Lee.
CapitaLand's global businesses span shopping malls, lodging, offices, homes, real estate investment trusts (REITs) and funds. Ascendas-Singbridge is mainly a business space provider, such as logistics and business parks, as well as data centres.
The board is proposing a final ordinary dividend of 12 Singapore cents a share for 2018.