Why CapitaLand Investors Lost 5% from 2011-2015

CapitaLand Limited (SGX: C31) is a real estate developer and owner. It is one of the largest companies in the Singapore stock market.

Its diversified global real estate portfolio includes integrated developments, shopping malls, serviced residences, offices and homes.

Stock market investors make money in two ways. Firstly, through dividend returns and secondly through price appreciation.

Both, however, are driven by sustainable profits.

Sustainable profit is, in turn, the result of good business performance, which is displayed by companies with sustainable growth, high margins, high return on equity and low gearing.

In short, investors are looking for companies that can deliver sustainable business performances, which will result in sustainable shareholders’ return.

So how has CapitaLand performed in the last five years in term of business performances and shareholders’ return?

Historical business performance:

S$ million 2010 2011  2012  2013  2014  2015
Revenue 3,383 3,020 3,301 3,511 3,925 4,762
Operating Income 1,625 1,210 1,183 1,356 1,467 1,590
Revenue growth % -10.74 9.33 20.48 -1.33 21.33
Operating income growth % -22.61 -2.26 -36.53 95.43 8.38
Operating Margin % 48.0 40.1 35.8 38.6 37.4 33.4
ROE % 9.2 7.3 6.2 5.5 7.1 6.2
EPS S$ 0.33 0.24 0.21 0.19 0.26 0.23
Gearing (debt/equity) 0.61 0.76 0.89 0.71 0.75 0.77


Source of data –

From 2010 to 2015, revenue was up by 41%, while operating profit was flat. The earnings per share (EPS), however, was down by 30% during the period.

During the same period, operating margin fell from 48% to 33.4%, while ROE has declined from 9.2% to 6.2%.

Gearing has also increased from 61% to 89% in 2012, before moderating slightly to 77% in 2015.

On the whole, we see that CapitaLand has been growing revenues steadily during the period, yet failed to translate the revenue growth into profitability. Moreover, both ROE and gearing moved in the opposite direction.

Total shareholders’ return over five years:

  1. Share price – If an investor had CapitaLand shares in January 2011, his investment would have lost about 16% after five years. That’s because the share price is down from S$3.80 to S$3.20.
  2. Dividend – CapitaLand has consistently paid dividends from 2011 to 2015, totalling S$ 0.41.

Thus, the total shareholder return for the last 5 years = (3.20 – 3.80 + 0.41) / 3.80 = -5%.

CapitaLand’s share price is down from 2011 to 2015, driven by a mixed performances of stronger revenue, but lower EPS, ROE and higher gearing.

Nevertheless, the lower share price has been offset by the consistent dividends paid during the period.

Including dividend, a S$10,000 investment in CapitaLand in 2011 would be worth about S$9,950 by the end of 2015.


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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 Lawrence Nga doesn’t own shares in any companies mentioned.