Boosted by strong contributions from rental properties and hotel operations, City Developments Ltd (CDL) saw a 17 percent increase in net profit for the second quarter to S$220.9 million, from S$188.9 million a year ago.
The company said property development continues to be a major contributor to its pre-tax profits, while hotel operations and rental properties were the main contributors to pre-tax profit growth.
It added that “with a healthy cash flow position that will be further enhanced by progress payments of pre-sold developments yet to be billed and available undrawn credit lines, the group will be able to withstand and weather potential global financial crisis that could emerge from uncontained debt crisis in US and/or Europe.”
CDL has also secured healthy sales of numerous projects under development. Along with joint venture (JV) associates, it sold a total of 809 units worth $793.9 million during the first half of the year. However, no profit was raised from H20 Residences, Hedges Park or Buckley Classique, as the construction of these projects have yet to begin.
Rental properties in its commercial segment also contributed greatly due to gains recognised in the divestment of The Corporate Building and The Corporate Office as part of its strategy to recycle its assets and rejuvenate its assets portfolio.
Kwek Leng Beng, Executive Chairman of CDL, said the company is “watchful of the global economic situation as adverse news such as any uncontained debt crisis will have an impact on market sentiment.”
“If the situation worsens, Asia will also undoubtedly be affected in the near term, but we estimate that with the growth in this region remaining fairly steady, Asia will be somewhat shielded from the brunt of such crisis.”
Looking forward, he said that with a low interest rate environment, “developers here will be mindful of market appetite which will be a major factor in deciding the timing of the launches and purchase or tender for development sites.”
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