Capitaland Investments Net Profit Fell 6 Y O Y 1Hfy2024
CapitaLand Investment (CLI) has reported a 6% year-on-year decline in its Profit After Tax and Minority Interest (Patmi) for the first half of its financial year 2024 (1HFY2024). The figure stood at $331 million. Meanwhile, the company’s Operating Patmi, which excludes gains and losses from divestments, revaluations, and impairments, saw a 14% year-on-year decrease to $296 million. This was due to a weaker performance from its real estate investment business (REIB), which was impacted by higher interest expenses and unfavorable foreign exchange rates.
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Despite these challenges, CLI’s fee-related business (FRB) remained strong, offsetting the decline in REIB. The company’s revenue grew by 1% year-on-year to $1.365 billion. FRB revenue saw an 8% year-on-year increase to $561 million, driven by improved asset performance and new management contracts in the lodging and commercial management businesses. The fund management business also contributed to revenue growth due to higher event-driven fees. However, REIB revenue dropped to $911 million, mainly due to the absence of contributions from properties that were divested in China, Australia, France, India, and Singapore, as well as lower demand for corporate leasing in the USA.
FRB’s contribution to Operating Patmi grew to 63%, up from 49% in the same period last year. CLI also made significant progress in its asset-light transition and diversification strategy, unlocking a capital recycling of S$1.7 billion that can be reinvested for future growth.
During 1HFY2024, CLI successfully monetized $1.7 billion. The lodging management business saw a 6% increase in revenue per available unit (RevPAU) and added new growth engines, such as a multi-year partnership between The Ascott Limited and Chelsea Football Club. The commercial management business also saw an impressive 22% growth in fee-income-related revenue, driven by enhanced asset performance and a restructuring of management fees.
As CLI only pays a final dividend, no interim dividend was declared for this period. In related news, the company recently raised RMB1.2 billion through its first sustainability-linked panda bond, and also acquired three properties in Singapore and Thailand. These initiatives are in line with CLI’s focus on further expanding its presence and growing its business in key markets.