City Developments' PATMI spirals down by 44.5%

Lack of gains from the disposal of the Corporate Office caused the steep decline in City Development's profit after tax and minority interests.

Despite the launch of two developments in 1Q12, uncertainty in the domestic residential market will continue to plague CDL's business, OCBC says. 

Here's more from OCBC Investment Research:

City Developments announced 1Q12 PATMI of S$156.8m - down 44.5% YoY mostly due to the lack of gains from the disposal of the Corporate Office recognized in 1Q11. Excluding disposal gains, however, PATMI would have increased by 14.8%. The 1Q12 numbers, which constitutes 20% of the FY12 forecast, is broadly in line with consensus and expectations. Topline came in at S$846.7m - up 9.4% YoY – mainly due to maiden contributions from the Glyndebourne, 368 Thomson, Cube 8, Hundred Trees and Tree House.

Expect at least two more launches this year
Over 1Q12, CDL launched two developments – the 466-unit Rainforest and 702-unit Bartley Residences, which has sold 94% and 41% respectively. Other on-going projects continue to convert sales, with Blossom Residences and the Palette over 89% and 73% sold, respectively. Looking ahead, CDL is expected to launch the 70-unit UP@Robertson Quay, along the Singapore River, and HAUS@SERANGOON GARDEN which is a landed housing development comprising of 96 terrace houses at Serangoon way.

Steady performance seen at hotel segment
Strong numbers from the hotel segment continued with 1Q12 PBT up 30.4% YoY to S$40.3m. Overall RevPar at M&C, the hotel subsidiary, was up by 6% YoY in 1Q12. In particular, RevPar has seen good growth in key cities: Singapore at 7.7%, London at 7% and New York at 0.6%. An impressive 21.6% RevPar growth s also ssen in the Rest of Asia segment, backed by double-digit growth in Kuala Lumpur, Jakarta, Beijing and Seoul. Refurbishment works at four premium hotels in Seoul, New York, Taipei and London remain on track, and the planned 325-room hotel site in Ginza, Japan, expected to complete by 2014, has began demolition works.

While management continues to execute strongly, there's still uncertainty in the domestic residential market – its core business segment - and the possibility of more property curbs ahead