Although CapitaLand is benefitting from soaring home sales in Singapore and China, its two biggest markets, it has suffered from the drop in the value of its investment properties in Singapore, Australia and elsewhere in the region.
The firm reported a 45 per cent increase in China home sales to S$158.2 million (S$1 = RM2.45) during the second quarter, but booked a net S$280.9 million in revaluation and impairment losses due mainly to a drop in the value of its commercial and Australian properties.
"Although some stability has been restored in the financial markets, the outlook for 2009 remains uncertain," CapitaLand chairman Richard Hu said in a statement.
CapitaLand chief executive officer Liew Mun Leong said that excluding writedowns, operating profit was higher in the second quarter compared with the first, and that the improvement will likely continue in subsequent quarters due to an improvement in market sentiment.
CapitaLand, which is 40 per cent owned by Singapore state investor Temasek, reported an April-June net loss of S$156.9 million compared with a net profit of S$515.2 million a year earlier.
The loss was expected by several analysts although estimates varied widely due to uncertainty over how CapitaLand would revalue its various assets.
The company's bottom line was hit by writedowns and impairment charges at Australian unit Australand, a residential development in Singapore, as well as the drop in the value of real estate held by CapitaCommercial Trust, a Singapore-listed real estate investment trust.
Excluding revaluations and impairments, CapitaLand said it made a net profit of S$124 million for the quarter.
Hu said the firm was in a strong position going forward as it had S$4.2 billion in cash and a relatively low debt-to-equity ratio of 0.43.
By Reuters
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