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A Look at Capitaland’s 2012 Results

Capitaland (SGX: C31), one of Asia’s largest real estate companies, released its full year results for Financial Year (FY) 2012 on 21 Feb 2013. Full year sales went up by 9% to S$3.3b while Profits After Tax & Minority Interests (PATMI) declined by 12% to $930.3m. The decline in PATMI seemed to be what investors were focused on as the company’s shares fell 2.7% on Thursday after its earnings release. Similarly, other local real-estate related companies like Keppel Land and Yeo Hiap Seng also saw share price declines of 1.5% and 2.0% respectively on Thursday.

Capitaland attributed its sales increase to a larger contribution from development projects in Singapore and Australia, higher rental revenue from shopping malls and growth in fee income. The decline in PATMI was largely attributed to a 25% fall in revaluation gains in its properties from S$483.7m to S$361.6m.

Moving forward, the company realigned its organisational structure into four main businesses; Capitaland Singapore; Capitaland China; Capital Malls Asia; and Ascott.

Capitaland will be targeting Singapore and China as its core markets for FY 2013. Both markets accounted for 44% and 33% of the company’s Earnings before Interest & Tax (EBIT) in FY 2012. On the other hand, the Australian market, which accounted for 18% of EBIT in 2012, is undergoing a strategic review by management even though it was considered a core market for Capitaland back in FY 2012.

In Singapore, Capitaland management believes that the latest round of property-price cooling measures enacted by the government will dampen demand, especially in the high-end residential segment, and more incentives will be used to boost sales. CEO and President Mr. Lim Ming Yan believes that “strong economic fundamentals and a growing population will underpin continued demand for new homes in Singapore. The unveiling of additional MRT lines in Singapore will present opportunities for new developments near these MRT stations.” Plans to open Bedok Mall and Westgate in FY 2013 are still on track for the company.

Over in China, Capitaland expects to open 3 malls and release 4000 residential units in FY 2013. The China residential market saw superb growth in 2012 as yearly sales units and sales values increased by more than 110% each. 1641 units of serviced residences are also planned to be released by Ascott in FY 2013, with 79.3% of those units located in China and the rest in Indonesia.

The company proposed an ordinary dividend of 7 cents per share for FY 2012 (compared to 6 cents per share dividend in FY 2011). At Thursday’s closing price of $3.90 per share, Capitaland will have a dividend yield of 1.8% if the proposed dividend of 7 cents per share gets approved by shareholders.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Contributor Chong Ser Jing doesn’t own shares in any companies mentioned.