CapitaLand foresees loss in upcoming FY 2020 financial results

The group’s cash PATMI is expected to fall by 35% to 45%.

Real estate group CapitaLand’s FY 2020 performance would be “materially and adversely” impacted, the firm announced in its Q3 2020 trading outlook report.

For FY 2020, the group’s operating profit after tax and minority interests (PATMI) is expected to drop by 20% to 30% from $1.057.2m logged in FY 2019. Meanwhile, cash PATMI—comprising operating PATMI as well as portfolio gains—is expected to diminish to 35% to 45% from $1,492.8m recorded in FY 2019.

CapitaLand will release its FY 2020 financial results on 24 February 2021.

Since 31 December 2020, CapitaLand has been in the process of finalising valuations on its property portfolio as well as impairment assessments of its investments.

“Based on indicative values, the company expects to recognise fair value losses on a portion of the group’s portfolio of properties, as well as impairments on certain residential projects and equity investments,” a statement read. “The company’s share of fair value losses is expected to be in the range of $1.55b to $1.65b as compared to a gain of $674.8m in FY 2019.” The fair value loss represented about 4.7% of CapitaLand’s investment properties portfolio value.

The report also said the company expects to see higher impairment losses in FY 2020, from $800m to $900m, as compared to the $31.6m loss achieved in FY 2019. “The fair value and impairment losses are non-cash in nature, and principally stemmed from the extraordinary events relating to the COVID-19 pandemic that materially affected the CapitaLand group’s business during FY 2020,” it added.