Despite headwinds and challenging market conditions, City Developments Limited (CDL) posted a creditable Profit after Tax and Minority Interests (PATMI) of S$243.8 million for Q4 2016 (Q4 2015: S$410.5 million) and S$653.2 million for FY 2016 (FY 2015: S$773.4 million). The lower PATMI versus 2015 was due to absence of the substantial profits recognised in Q4 2015 from CDL’s second Profit Participation Securities (PPS) platform. Nonetheless, PATMI for 2016 was boosted by strong residential sales in Singapore and China, and divestments including the sale and recapitalisation of Summervale Properties Pte. Ltd. (which holds Nouvel 18), resulting in the establishment of the Group’s third PPS platform.

Revenue rose 18.2% to a record S$3.9 billion for FY 2016, up from S$3.3 billion in the previous year. For Q4 2016, revenue rose 36.5% to S$1.2 billion from S$855.0 million in Q4 2015. The increases were driven by the property development segment, with strong maiden contribution from Hong Leong City Center in Suzhou and steady sales of Singapore projects Gramercy Park, Coco Palms, D’Nest and The Venue Residences and Shoppes, as well as revenue recognition in entirety from the fully sold Lush Acres Executive Condominium (EC), which obtained Temporary Occupation Permit (TOP) in June 2016.

Mr Kwek Leng Beng, CDL Executive Chairman, said, “In view of the challenging economic environment, CDL has delivered creditable results. Notably, Hong Leong City Center Suzhou has made a strong maiden contribution to our record revenue and we have a pipeline of overseas projects which will progressively boost our bottom line.

Looking ahead, we plan to be more acquisitive with a focus on finding in-place income in Singapore and overseas. Our robust balance sheet and war chest place us in a strong position to deploy capital for acquisitions which can be in the form of physical assets, equities or debt instruments. We will continue to exercise strict discipline in capital management, remaining highly selective and value oriented, and may take a contrarian approach when needed, to enhance shareholders’ returns.

In 2016 till year-to-date, besides adding Development House in UK’s Shoreditch, Park Court Aoyama The Tower in Tokyo, the prime Ransomes Wharf site in South West London and Meidao Business Plaza in Shanghai to our portfolio, we have also invested in new-economy platforms such as Distrii, a leading operator of co-working spaces in China, and mamahome, a fast-growing Chinese online apartment rental platform, which will enable us to gain entry into these growing sectors. These strategic investments will enhance our recurring income streams and boost our profit from overseas property development.”

Mr Grant Kelley, CDL Chief Executive Officer, said, “We have continued to ramp up our strategic diversification through growing our funds management business and investing in overseas markets. With the successful execution of our third PPS in October 2016, we now have over S$3.5 billion in funds under management, on track to achieve our target of S$5 billion by end 2018. We will continue to pursue our funds management and capital recycling programme which may take the form of another PPS or traditional private equity structures.”

Source: CDL