CapitaMalls Asia’s First Quarter Results – Fuelled by Shoppers

CapitaMalls AsiaCapitaMalls Asia (SGX: JS8) released its first quarter results earlier in the morning today and shares are up slightly by 0.5% to $1.98 at 10:00am. As it is with investors, the focus is mostly on the bottom line and on that front, the company managed to deliver growth. Quarterly profit after tax and minority interests (PATMI) increased year-on-year by 9.6% from S$66.8m to S$73.2m. If revaluation gains were stripped away from last year’s results, CapitaMalls Asia would have delivered 103% year-on-year growth in quarterly profit.

The company had acquired Olinas Mall in Tokyo last July and opened the Star Vista Mall in Buona Vista, Singapore two months later. These developments helped push CapitaMalls Asia’s revenue for the quarter upwards by 29% from S$70.9m a year ago to S$91.5m.

For its retail operations here in Singapore, the company had seen a 3.6% increase in tenants’ sales while shopper traffic had grown by 3.7%. That should come as no surprise as the company’s retail operations here are represented by mostly by a 28.5% stake in CapitaMall Trust (SGX: C38U). The real estate investment trust, which is managed by CapitaMalls Asia, had seen a pickup in shopping activity in its retail malls during the recently completed quarter.

Any slow-down in China’s economic growth certainly did not impact the way Chinese shoppers doled out their cash – CapitaMalls Asia’s China retail operations had experienced a 16% growth in sales even though shopper traffic decreased slightly by 0.9%.

For developments in Singapore for the rest of 2013, investors can look forward to profit recognition from Bedok Residences, with 95% of its units already sold, from the second quarter onwards. Bedok Mall and Westgate are both on track to open in the fourth quarter this year and already have at least 50% of their spaces in committed occupancy.

In China, the company will be opening CapitaMall Meilicheng in Chengdu on 28 April 2013 and the property’s expected to have a net property income yield of 5% after a year in operation.

Chairman of CapitaMalls Asia, Mr Ng Kee Choe, commented on the company’s results and future outlook: “Despite the lingering global economic uncertainty, CapitaMalls Asia posted healthy growth in the first quarter. Looking ahead, we continue to be positive about the long-term retail prospects in our key markets of Singapore, China and Malaysia, which will be driven by sound economic fundamentals. Singapore’s economy is forecast to grow between 1.0% and 3.0% this year, with higher visitor arrivals of between 14.8 million and 15.5 million. In China, economic measures to boost domestic consumption are anticipated as the new leaders have reiterated their focus to achieve sustainable growth, with the economy targeted to grow by 7.5% and retail sales by 14.5% this year. And in Malaysia, economic growth is expected to come in between 5.0% and 6.0% this year, spurring expected retail sales growth of 6.0%.”

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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.