CDL reports 2HFY2021 earnings of $129.7 mil; highest annual property sales

By The Edge Singapore
/ EdgeProp Singapore |
The 256-unit residential component of the 80 Anson Road integrated development (former Fuji Xerox Towers) in the CBD will also be launched later this year (Credit: CDL)
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SINGAPORE (EDGEPROP) - City Developments is back in the black with earnings of $129.7 million for 2HFY2021 ended Dec 2021, putting behind losses $1.92 billion incurred this time last year because of write-offs.
For the full year, the leading property and hotel player reported earnings of $97.7 million, versus full year losses of $1.92 billion for FY2020.
Revenue for 2HFY2021 was $1.43 billion, up 38.4% y-o-y; revenue for FY2021 was $2.63 billion, up 24.5% over FY2020. According to CDL, the higher revenue was led partly by improving hotel operations, which returned to profitability in 2HFY2021.
Irwell Hill Residences scale model - EDGEPROP SINGAPORE
The 540-unit Irwell Hill Residences launched last year, was one of the projects that contributed to CDL's highest ever property sales (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Despite the pandemic, the company’s property development segment did well too. With a total of 2,185 residential units worth $4.3 billion sold, it was CDL’s highest ever annual property sales. Projects that did well in FY2021 include Whistler Grand, Amber Park, The Tapestry and Irwell Hill Residences in Singapore, as well as overseas projects such as Shenzhen Longgang Tusincere Tech Park in China.
Three residential launches in Singapore are in the pipeline for 2022. The first is Piccadilly Grand, a 407-unit mixed-use development joint venture project at Northumberland Road, which is slated for launch in 1H2022. In 2H2022, a 639-unit joint venture executive condo project at Tengah Garden Walk located in Tengah New Town. The 256-unit residential component of the 80 Anson Road integrated development (former Fuji Xerox Towers) in the CBD will also be launched. (Discover all Singapore new launch condos in 2022)
The 256-unit residential component of the 80 Anson Road integrated development (former Fuji Xerox Towers) in the CBD will also be launched later this year (Credit: CDL)
In December 2021, CDL announced its redevelopment plans for its Central Mall properties into a large-scale mixed-use development following the acquisition of Central Square for $315 million. The enlarged site, comprising office, retail, hospitality and potentially a residential component, will be redeveloped under URA’s Strategic Development Incentive Scheme. It will yield a significant uplift in gross floor area of 67% to 735,500 sq ft.
CDL plans to a final dividend of 8 cents per share, a special final dividend of one cent for FY2021, which, coming on top of the 3 cents interim dividend already paid, will bring its full year dividend to 12 cents which is the same what it paid for FY2020.
Central Mall Properties - EDGEPROP SINGAPORE
Redevelopment of Central Mall Properties under URA's Strategic Development Incentive Scheme (Photo: CDL)
In addition, it plans to pay a distribution in specie of CDL Hospitality Trusts units valued at 19.1 cents per CDL share held, giving a total payout worth 31.1 cents.
A total of 144.3 million CDLHT units will be distributed, which when completed, will trim its stake to 27% from around 38% it holds now.
CDL explains that this distribution is “yet another positive outcome”, reflecting its “commitment towards capital recycling to enhance efficiency and maximise shareholder value.”
Millennium Hilton Seoul - EDGEPROP SINGAPORE
CDL divested Mllennium Hilton Seoul for $1.26 billion last December as part of its capital recycling initiative (Credit: CDL)
Upon completion of the distribution, CDL will deconsolidate CDLHT from its accounts and thereby book gains on any future sale of assets from CDL to CDLHT should the transaction value exceed the carrying book value of the assets.
Some of the assets, presumably, will come from CDL’s subsidiary Millennium & Copthorne Hotels, which used to be separately listed by CDL privatise it.
Upon accounting deconsolidation of CDLHT, CDL will recognise an gain of around $467.5 million on a pro forma basis.
Tanglin Shopping Centre - EDGEPROP SINGAPORE
One of the recent divestments was Tanglin Shopping Centre (which CDL had an indirect stake through Millennium & Copthorne), which was sold en bloc for $868 mil on Feb 22 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
CDL’s net gearing (including fair value of investment properties) would be at 55% from 61%.
With gradual resumption of travel, CDL's hotel operations are poised for a "long-awaited imminent rebound," says executive chairman Kwek Leng Beng.“We will continue to review and optimise our hospitality portfolio through operational improvements, refurbishments, redevelopments and divestments to extract value,” adds Kwek. "At the same time, to generate sustainable returns for shareholders, we will be agile and opportunistic to redeploy our capital to acquire assets in resilient sectors.”
The proposed distribution of CDLHT demonstrates CDL's commitment and appreciation to shareholders, he continues.
Sherman Kwek: The group is well-positioned to redeploy capital to higher growth assets and expand our diversified portfolio in our key markets (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Group CEO Sherman Kwek says that CDL's capital recycling initiatives, as demonstrated by the divestment of Millennium Hilton Seoul and Tanglin Shopping Centre as well as the deconsolidation of CDLHT, will strengthen CDL's balance sheet and maximise shareholder value. "The group is well-positioned to redeploy capital to higher growth assets and expand our diversified portfolio in our key markets," he adds.
As at Dec 31 2021, CDL’s net asset value per share was $9.28, slightly below $9.38 as at Dec 31 2020.
If the less conservative revalued net asset value is applied, it would be $15.70, versus FY2020’s $14.26.
CDL shares closed on Feb 24 at $7.01, down 3.08%.

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