CapitaLand China Trust (AU8U) H2 2023 earnings summary

Executive summary

• FY 2023 gross revenue rose 3.3% YoY to RMB1,912.5m and NPI increased 5.3% to RMB1,293.7m, led by retail recovery despite weaker new-economy contributions.

• 2H 2023 NPI grew 10.5% YoY to RMB630.0m as retail occupancy improved and asset enhancement initiatives (AEIs) lifted performance.

• Stronger SGD, higher interest costs and lower fair-value results weighed on SGD earnings and distributions; DPU was 6.74 Singapore cents versus 7.50 cents in FY 2022.

Financial highlights

• Gross revenue was RMB1,912.5m, up 3.3% YoY; NPI was RMB1,293.7m, up 5.3% YoY. In SGD terms, revenue fell 4.8% to S$364.7m and NPI fell 2.9% to S$246.7m.

• Distributable income was S$113.9m versus S$125.6m; DPU was 6.74 cents versus 7.50 cents. FY 2023 EPU was 2.42 cents versus 7.36 cents.

• Total return after tax fell to S$55.0m from S$155.1m; results included a S$39.8m investment-property fair-value loss versus a S$67.8m gain in FY 2022.

• Portfolio valuation was RMB25,222m on a 100% basis, broadly level with RMB25,241m in 2022; in SGD terms it declined to S$4,700.1m from S$4,904.3m.

Outlook and guidance

• AEIs completed at CapitaMall Yuhuating, Rock Square and CapitaMall Grand Canyon are expected to deliver further retail contributions in 2024.

• Priorities include improving retail footfall, leasing business parks to growth sectors, raising logistics occupancy, and recycling capital from mature assets into portfolio upgrades and growth opportunities.

• China's long-term prospects are viewed positively, while market volatility and uncertainty persist; GDP grew 5.2% and retail sales 7.2% in 2023.