CapitaLand's 2Q China residential sales dropped 44% to 1,054 units

Despite a 14.5% increase in profits.

CapitaLand is right on track as it delivered an increase of 14.5% resulting in $438.7 million profits this year, mostly due to improved operating profits, higher revaluation gains from investment properties and write-back of impairments. OCBC reports that CapitaLand’s year to date profits cumulates to $621.5 million, broadly within expectations.

It is notable that topline for the quarter came in at $875.3 million, down 13.2% year on year, mostly due to lower revenue from development projects in Singapore and China, partially offset by higher sales in development projects in Vietnam and higher rental revenue from the group’s shopping mall and serviced residences businesses. 2Q14 saw 161 residential units sold, as compared to 139 in 2Q13.

In China, however, residential sales in 2Q14 dipped 44% to 1,054 units.

In a release, CapitaLand reveals that revenue decreased by 13.2% mainly due to lower sales from development projects in Singapore and China. The decrease was partially mitigated by higher contribution from their shopping mall and serviced residence businesses as well as development projects in Vietnam, namely Mulberry Lane and The Vista.

Revenue from CapitaLand China (“CL China”) which is recognised on a completion basis, was
38.0% lower as fewer apartment units for projects held through subsidiaries were handed over to
home buyers during the quarter. The main contributor to 2Q 2014 revenue was iPark in Shenzhen.

Here’s more from CapitaLand:

CapitaLand Singapore’s (“CL Singapore”) revenue was 20.9% lower as sales from Urban Resort Condominium and The Interlace tapered off after obtaining Temporary Occupation Permit in 2013, lower progressive revenue recognition for Bedok Residences as well as absence of rental income from TechnoPark@Chai Chee which was divested in November 2013. The decrease was partially mitigated by higher contribution from Sky Habitat, higher rental income from CapitaCommercial Trust as well as Bedok Mall and Westgate which commenced operations in December 2013.

Serviced residences’ revenue increased by 8.0% due to improved operating performance of
properties in Europe, as well as contribution from newly acquired properties in China and Japan.

Collectively, the two core markets of Singapore and China accounted for 72.9% (2Q 2013: 81.5%) of the Group’s revenue.

For 2Q 2014, the Group achieved an EBIT of $799.7 million which was 4.0% higher than 2Q 2013 mainly due to better operating performance, higher fair value gains and write back of foreseeable losses, partially offset by lower portfolio gains.