CDL posts 79.5% rise in Q2 profit on the back of strong sales

SINGAPORE: City Developments Limited’s (CDL) second-quarter net profit soared 79.5 per cent from a year ago, on the back of strong sales.

The property developer on Wednesday (Aug 8) posted a net profit of S$204.8 million, up from S$114.1 million in the same period a year ago.

The rise came alongside an almost 60 per cent increase in revenue for the quarter to S$1.36 billion, compared with S$854 million last year.

The group said that the gains were powered by a strong performance from its property development segment, which contributed 78 per cent of profit before tax during the quarter. 

In Singapore, CDL sold 651 residential units worth S$1.29 billion in the first half of the year, boosted by healthy take-up for two launches at New Futura in Leonie Hill Road and The Tapestry in Tampines. Although the number of units sold during that time frame was 5.8 per cent lower than the same period last year, the sales value was up 12.1 per cent.

In China, CDL sold 170 units worth 691 million yuan in the first half of the year.

In response to the property cooling measures introduced last month, CDL Group CEO, Mr Sherman Kwek, said that he expects the pace and volume of sales to take a hit.

The only silver lining, he added, is that prices for Government Land Sale (GLS) sites could be moderated.

The developer acquired Amber Park in a record freehold en bloc sale last year. It also bid a pretty penny for Sumang Walk — which set a record unit land price bid for an executive condominium (EC) site earlier this year.

Going forward, Mr Kwek said that CDL will adopt a more cautious approach with its land bids — carefully reviewing sites that will “enable a distinct advantage”.

For example, he said their upcoming launch, Whistler Grand in West Coast Vale, is in an area where there is little competition and good demand.

He added that the group will continue to focus on ECs, given the dearth of supply in that segment. Integrated developments are also an area where the company can value-add, he said.

As for outlook, the group maintained that it is “well-poised” for its next phase of growth.

“Our globally diversified portfolio of residential developments and recurring income properties also enables us to weather headwinds that impact specific asset classes or markets," Mr Kwek said.

“We remain focused on growing our recurring income significantly over the next 10 years through strategic acquisitions, investments and asset enhancements.”