AustraLand, CapitaLand’s business arm in Australia, suffered a 15 percent loss in net profit for the fiscal year 2011, but remains optimistic that earnings this year will likely improve despite volatile market conditions.
“Despite the near-term challenges, the group remains cautiously optimistic and is budgeting for an increase in operating earnings per security for 2012,” it said.
The company’s profit dropped to A$140.6 million (S$188.58 million) in 2011, from A$165.8 million (S$222.37 million) a year ago, while its revenue declined eight percent to A$692.8 million (S$929.177 million). The significant drop in earnings was mainly attributed to the hefty cost of revaluing seven development projects in Queensland, as well as to the A$24.2 million (S$32.46 million) loss in interest rate derivatives.
Bob Johnston, Australand’s Managing Director, said the company’s earnings for this year were in line with guidance previously given to investors. He noted that residential sales volumes climbed 15 percent, with the value of contracts on hand rising slightly.
Looking forward, Johnston expects the development at 357 Collins Street in Melbourne (pictured) to be fully leased by mid-2012.
He pointed out that 2011 had been a challenging year for the real estate market due to global and domestic uncertainty, which resulted in a lack of consumer and business confidence.
“Despite some near-term challenges, we expect the strength of the resources sector will, in time, have a positive impact on the broader economy and sentiment, supporting solid employment, continued population growth and renewed demand,” he added.
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