Yesterday, the property firm CapitaLand revealed a big fall in its Q1 earnings, and declared little chance for a fast turnaround with the present market conditions.
The firm reported a net income decline of 82.7 percent to $42.9 million for the first quarter of 2009, indicating that income during the same period a year ago had been expanded by the $141.4 million one-off gains.
Lew Mun Leong, CEO CapitaLand, said in a statement: “We do not expect a quick or sharp turnaround in global property markets. CapitaLand will continue to take a conservative and proactive approach to capital management, and focus on delivering projects that generate sales, cash flow and profits”.
Due to lower rental revenue and lower sales from development projects, CapitaLand revenue also fell by 22.9 percent to $487 million.
In February last year, the revenue of the firm was boosted due to the completion of a big-scale project, the Varsity Park Condo. The rental income from office properties was also higher due to the shares from One George Street, which was sold last July.
Its business unit in China also depicted lower revenue in Q1 2009 due to the divestment of the two properties: Capital Tower Beijing and Raffles City Shanghai, which strongly contributed to the firm’s revenue a year ago.
Net asset value per share dropped, from $3.78 as at 31 December 2008, to $2.98 as at 31 March 2009. Earnings per share also fell, from a restated 7.3 cents to only 1.2 cents.
Although buying view for residential property projects remains cautious at current situation, CapitaLand anticipates its profits to benefit from initiatory contributions from The Orchard Residences and The Seafront on Meyer. The firm also expects lively returns in industrial and office rents in spite the economic downturn.
CapitaLand remains optimistic on its residential projects in China, because it demonstrates a return of consumer confidence and symbols of economic stability there.