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CDL’s profit up 32%, aided by sales of luxury homes

CITY Developments (CDL) executive chairman Kwek Leng Beng believes that Singapore’s property market is likely to remain healthy and that there is still room for sustained growth.

‘Continued capital appreciation over the next few years is likely, and the prospects for the property sector continue to be good,’ said Mr Kwek yesterday.

Shareholders would have beamed at his optimistic outlook, but some were left scratching their heads wondering when the company, flush with cash, would utilise its outstanding Section 44 tax credits.

CDL is among several big companies that still have unused tax credits, which expire on Dec 31.

On Tuesday, Hong Leong Finance announced a special dividend to partially utilise its outstanding credits. And Singapore Computer Systems has announced an interim dividend of three cents and a special dividend of one cent per share – the first time the company has given a dividend in two years.

Still, tax credits aside, investors cheered a strong performance by South-east Asia’s second-largest developer, which released its third-quarter results yesterday.

Net profit for the three months ended Sept 30 rose 32 per cent to $169.5 million, compared with $128.3 million in the corresponding period a year ago.

Aided by strong luxury-home sales in Singapore, revenue shot up 19.7 per cent to $796 million last year.

Earnings per share for the quarter rose from 14.1 cents to 18.6 cents, while net asset value per share rose to $5.51 as at Sept 30 from $5.21 as at Dec 31 last year.

While Mr Kwek acknowledges that the withdrawal of the deferred payment scheme for property purchases has had an initial ‘knee-jerk’ impact on market sentiment, he expects confidence and buying interest to return.

‘The high-end property market, having reached record highs, is likely to see a more judicious growth,’ he said.

Singapore’s position as a growth hub in the Asia-Pacific will augur well for the property market, he added.

The group’s total land bank stands at 4.48 million sq ft, with a gross floor area of 9.12 million sq ft.


Source: The Straits TimesĀ 15 Nov 07

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