Many blue-chip companies such as DBS Group (SGX: D05) and Singapore Airlines Limited (SGX: C6L) have reported strong sets of earnings despite the macroeconomic challenges.
CapitaLand Investment Limited (SGX: 9CI), or CLI, is no exception.
The real estate giant turned in an impressive financial report card for 2022 with all its divisions showing healthy year on year growth.
Given the robust performance, CLI has declared a final cash dividend of S$0.12 and a special dividend-in-specie of 0.057 shares of CapitaLand Ascott Trust (SGX: HMN) valued at S$0.059.
These two dividends total up to S$0.179, higher than the total cash dividend of S$0.15 paid out in 2021.
What’s more, investors can look forward to more corporate action this year as the group works hard to grow both its assets under management (AUM) and funds under management (FUM).
Here are five highlights from CLI’s latest earnings that you should know about.
1. Higher revenue and a better core net profit
2022’s revenue jumped by 25.4% year on year to S$2.9 billion, boosted by increased contributions from CLI’s fee income-related businesses (FRB) and real estate investment business (REIB).
Net profit, however, tumbled by 36.2% year on year to S$861 million.
The fall in net profit was caused by lower portfolio gains on divestments along with a sharp decline in revaluation gains and impairments.
Stripping these one-off items out, CLI’s core net profit grew 22.5% year on year from S$497 million to S$609 million.
2. Growing its FUM and related earnings
As of 31 December 2022, CLI’s FUM stood at S$88 billion, a slight S$2 billion increase from 2021’s S$86 billion.
However, as of the year-to-date (YTD), CLI has accumulated an additional S$8 billion in embedded FUM.
Embedded FUM is defined as uncompleted acquisitions and committed but undeployed capital, both of which should eventually show up as FUM in the group’s books.
When added to the existing FUM, the total YTD FUM comes up to S$96 billion, putting CLI on track to meet its S$100 billion target by 2024.
Fund management fee-related earnings (FM FRE) rose 5% year on year to S$429 million, with the bulk of the increase coming from event-driven private funds.
3. Successful fund-raising and capital recycling
CLI is also actively raising funds through private fundraising.
In 2022, the group launched eight new funds across various strategies and asset classes, raising a total of S$2.5 billion.
The FUM for these private funds stood at S$28 billion with FRE coming in at S$144 million, up 26% year on year.
Meanwhile, the real estate owner was also active in capital recycling.
Total divestment value for 2022 came in at S$3.1 billion, exceeding CLI’s annual target of S$3 billion, though this was far below the bumper year of 2021 when divestments hit an all-time high of 13.6 billion.
Around 89% of the divested value has been retained as FUM, with divestments achieving an average of 12% premium to their carrying values.
4. Six consecutive years of growth in lodging
With the resumption of air travel along with pent-up demand for vacations, CLI has seen its lodging division post a strong recovery.
2022 was the sixth consecutive year of growth for the division which saw the addition of ~33,000 units representing a 20% year on year increase in rooms.
Total units stood at more than 159,000 as of the end of 2022, up from 133,000 in 2021.
These numbers were boosted by CLI’s acquisition of the Oakwood platform, and lodging management’s FRE also enjoyed a 36% year on year surge to S$258 million.
The travel recovery led to a 40% year on year jump in revenue per available unit (RevPAU) to S$95 from S$68.
The occupancy rate increased by 10 percentage points while the average daily rate also improved by 18% year on year.
All markets except China registered year-on-year RevPAU increases, and with China’s recent reopening, this market should also turn in positive numbers for CLI’s lodging management division soon.
5. Good potential for the real estate investment business
Finally, we look at CLI’s REIB, which had total assets of S$35.1 billion as of 31 December 2022.
The group’s pipeline comprises more than S$10 billion of assets that can be slowly divested to support the growth of CLI’s platform.
Close to half of the real estate pipeline resides in China, and this portfolio covers a wide spectrum of property types such as lodging, office, retail, and integrated developments.
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Disclosure: Royston Yang owns shares of DBS Group.