CityDev's property development arm suffer 11.8% drop in profits

On back of weaker demand.

According to Phillip Securities Research, City Development announced its 4Q13 and FY13 results on 27 February 2013.

In FY2013, property development segment contributed S$1198.1mn in revenue and S$412.9mn in profit after tax (PBT). This represents a -15.3% and -11.8% y-o-y decrease, respectively. This is largely due to the weaken demand as potential buyers are wary of the potential increase in interest rates and increasing number of cooling measures.

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For its full year results, revenue was reported at S$3,162.1mn (-5.7% y-o-y). FY13 PATMI of S$683.0mn (+0.7% y-o-y) was largely unchanged from the previous year. Net gearing is lowered to 0.20x (FY12: 0.25x). In 4Q13, CDL welcomed a new CEO, Mr. Grant Kelley.

The new CEO has wide experience in real estate investment and used to serve as Head of Real Estate (Asia Pacific) for Apollo Global Management.

There are little variance in revenue contribution from other segments. For hotel operations, the lower PBT contribution is largely due to the capex expenditure on Asset Enhancement Initiatives (AEI).