Strong Q1 for CapitaMalls Asia
Profit rises to $96.8m from $10.3m, helped by higher rental income and The Orchard Residences
By UMA SHANKARI
CAPITAMALLS Asia (CMA) yesterday reported a net profit of $96.8 million for Q1 2010 - up from $10.3 million a year ago - as the mall operator saw higher rental income from its majority-owned malls and booked profits from selling units in The Orchard Residences.
Revenue for the three months ended March 31, 2010, rose 41 per cent to $74.6 million from $52.9 million in 2009.
'We achieved a strong first-quarter profit on the back of economic recovery in our key markets of Singapore, China and Malaysia,' said CMA chairman Liew Mun Leong. CMA has stakes in and manages 87 retail properties across five countries - Singapore, China, Malaysia, Japan and India - with a total property value of $20.4 billion.
Other than sales in The Orchard Residences and higher rents, the increase in Q1 2010 revenue also came from profit contributions from the fee management business, fair value gains on revaluation of two properties and contribution from the newly-opened Ion Orchard mall in Singapore.
Earnings per share in Q1 2010 was 2.5 cents, up from 0.6 cents in Q1 2009.
Looking ahead, CMA said it is well positioned to take advantage of the growth potential in Asia and will continue to pursue selective acquisition and development opportunities.
In Singapore - where the retail company gets the bulk of its earnings from - CMA will 'continue to create more value' from its portfolio of existing assets including Raffles City Singapore and Jurong Entertainment Centre, focus on the development of its One-North project and also pursue selective acquisition and development opportunities, it said.
CIMB-GK analyst Donald Chua yesterday issued a fresh 'underperform' call on the stock, citing the 'yield gestation' needed for CMA's China malls.
'While CMA's edge over its local competitors in mall management is apparent, average rents remain low with net property income yields (at 2-plus per cent) of immature malls in the second tier cities still some way off CMA's target of 8-9 per cent,' Mr Chua said. 'We think the malls will need 1-2 rental cycles for rents and yields of its current portfolio to stabilise.'
DBS Group Research, in contrast, issued a new 'buy' call. The catalyst for the stock lies in its ability to acquire new assets, DBS's analysts said.
CMA gained once cent to close at $2.30 yesterday.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Profit boost: contribution comes from selling units in The Orchard Residences Profit rises to $96.8m from $10.3m, helped by higher rental income and The Orchard Residences
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