CapitaLand 4Q profit down 20%

It fell to S$477m from S$596m in the fourth quarter of 2010 due to lower development profits and portfolio gains.

CapitaLand reported:

In 4Q 2011, the Group achieved an EBIT of $812.1 million which came in lower than 4Q 2010 due to lower development profits being recognised and lower portfolio gains.

The development profit recognition from our overseas projects is dependent on the completion schedule as revenue and profit from these overseas projects could only be recognised on completion under INT FRS 115. In 4Q 2010, the Group’s development profit was boosted by its share of profits of The Orchard Residences as profits from units sold under the deferred payment scheme was recognised in full in 4Q 2010.

Portfolio gains totaled $83.7 million in 4Q 2011, primarily from the divestment of Shanghai CapitaLand Xin Chuang Real Estate Development Co., Ltd. and Corporation Place. In 4Q 2010, the Group recorded portfolio gains of $223.4 million mainly from the divestment of Raffles City Changning and 28 serviced residence properties.

The Group has higher fair value gains from the year end revaluation of investment properties, lower impairment charges as well as lower foreign exchange losses. The net fair value gains from the revaluation of investment properties were $398.1 million in 4Q 2011 as compared to $368.1 million in 4Q 2010. The increase came mainly from our investment properties in China, offset by lower fair value gains from the investment properties in Singapore and Europe.

In 4Q 2011, the Group recorded a provision for foreseeable loss and a net write back of impairment charge which together amounted to $25.5 million. The provision for foreseeable loss was in respect of our development projects in Australia.

Impairment charges were made for certain investments in Japan and Malaysia but these were more than offset by a write back of provision for impairment in relation to Urban Suites. In 4Q 2010, the Group recognized impairment charges and provision for foreseeable losses totaling $77.7 million for projects in China, Japan, Australia and Bahrain.

After taking into account finance costs, taxes and non-controlling interests, the Group achieved a PATMI of $476.6 million in 4Q 2011. This was lower than 4Q 2010’s PATMI due to lower development profits and portfolio gains, partially mitigated by lower impairment losses in 4Q 2011 as mentioned above.