City Developments (C09) H2 2023 earnings summary

Executive summary

• FY 2023 revenue reached a record $4.94b, up from $3.29b; PATMI fell to $317.3m from $1.29b, largely reflecting higher financing costs and the absence of prior-year divestment gains.

• Property development drove revenue growth, while hotels sustained a strong recovery; reported pre-tax profit was affected by prior-year one-off gains and current-year impairments.

• Excluding divestment gains and impairment losses, net profit was $188.6m versus $47.0m on a like-for-like basis.

Financial highlights

• Revenue $4.94b, up from $3.29b; gross profit $1.65b versus $1.25b; profit from operating activities $818.5m versus $1.88b.

• PATMI $317.3m versus $1.29b; profit before tax $472.6m versus $1.86b; basic EPS 33.6 cents versus 140.3 cents.

• EBITDA was $1.1b versus $2.3b; total assets rose to $24.2b from $23.0b, while NAV per share was $10.12 versus $10.16.

• Cash and available committed credit facilities totaled $3.6b versus $4.1b; cash reserves net of overdraft were $2.2b at year-end.

Outlook and guidance

• 2024 outlook remains cautiously optimistic; new acquisitions will be approached prudently, with well-timed divestments planned to recycle capital and manage gearing.

• Hotel operations are expected to trade positively in FY 2024, supported by tourism recovery and visa-free travel arrangements for Chinese visitors to Singapore, Malaysia and Thailand.

• Two Singapore residential launches are planned for 2H 2024: Champions Way (348 units) and Union Square Residences (366 units).

• Office rents in Central London are expected to grow healthily in 2024; Singapore office and retail rents are expected to see modest growth, subject to supply and macro conditions.