Investors are witnessing a strong earnings reporting season as several reputable blue-chip stocks dole out record earnings.
DBS Group (SGX: D05) led the way with a its highest-ever net profit of S$8.2 billion for 2022.
Next, Singapore Airlines Limited (SGX: C6L), or SIA, turned in its highest-ever operating profit because of a sharp rebound in air travel.
The third candidate for record-high earnings is City Developments Limited (SGX: C09), or CDL.
The property giant posted its highest profit since the group’s inception, driven by major property divestments.
In line with the blockbuster results, CDL has also declared a bumper cash dividend for its shareholders.
Here are six highlights from the group’s 2022 financial results.
1. A blowout set of numbers
CDL’s revenue rose 25.4% year on year for 2022 to S$3.3 billion, aided by higher property development sales and also a better performance from the group’s hotels division.
Net profit catapulted from just S$84.7 million in 2021 to S$1.3 billion last year.
The group’s net profit was boosted by two exceptional, one-off items – the first was a gain of S$492.4 million on deconsolidation of CDL Hospitality Trusts (SGX: J85), or CDLHT, when CDL distributed units of the trust as a distribution-in-specie.
Secondly, CDL also enjoyed divestment gains totalling S$1.26 billion from three key assets that were accounted for at book value.
The bulk of the divestment gains came from the sale of Millennium Hilton Seoul (pre-tax gain: S$925.5 million) with the remainder coming from the collective sale of both Tanglin Shopping Centre (pre-tax gain: S$256.3 million) and Golden Mile Complex (pre-tax gain: S$75.6 million).
2. Robust residential sales and a healthy pipeline
2022 saw robust residential property sales in three countries – Singapore, Australia and China.
For Singapore, CDL and its associates sold a total of 1,487 units with a total sales value of S$2.9 billion, principally from the successful launch of two projects – Piccadilly Grand and Copen Grand.
Australia enjoyed brisk sales of properties The Marker (79% sold) and Brickworks Park (45% pre-sold) while China sold 88 residential, office and retail units for a total value of RMB 349 million.
CDL still has a launch pipeline of more than 2,100 units for properties such as Tembusu Grand, a 638-unit development, and The Myst, a 408-unit development located near Bukit Panjang MRT Station.
3. Bulking up on PRS and PBSA
The group has also been busy building up its Private-Rented Sector (PRS) and purpose-built student accommodation (PBSA) sector.
Its UK Living Sector portfolio comprises nine projects with around 2,400 PBSA beds with a pipeline of more than 1,300 PRS units. The assets under management based on gross development value stood at around S$1 billion.
In Japan, CDL acquired three newly-built PRS assets in Japan last year, taking its total in the country to eight comprising 513 units with occupancy rates above 95%.
Meanwhile, in Australia, two PRS development sites were acquired with construction to commence in the second half of this year (2H 2023).
4. Redevelopment initiatives
Aside from acquisitions and residential launches, CDL is also actively redeveloping several properties to unlock value.
One is Newport Residences which should see a 25% uplift in gross floor area (GFA) and will be launched in 1H 2023.
The other is the redevelopment of Central Mall and Central Square that will increase GFA by an estimated 67%.
The launch of this new development should take place by 2H 2024.
5. A strong rebound for the hotels division
In 2022, CDL’s hotels division saw revenue surge by 58.2% year on year to S$1.38 billion as travel demand and the easing of restrictions resulted in a travel boom.
Profit before tax came in at S$1.3 billion, a sharp reversal from the loss of S$71 million in 2021.
The profit boost was principally due to the earlier-mentioned disposal of the Millennium Hilton Seoul.
Room occupancy rate rose from 50.2% to 64.4%, though this was still shy of the 71.3% occupancy in 2019 (i.e. pre-pandemic).
The good news is that average room rate surged 48.9% year on year to S$214.1, exceeding the rate of S$199.5 in 2019.
Revenue per available room (RevPAR) nearly doubled year on year from S$72.2 to S$137.9.
6. Sharply higher cash dividends
CDL has rewarded shareholders with much higher cash dividends for 2022.
The group has declared a final dividend of S$0.08 and a special dividend of S$0.08, bringing total 2022 cash dividend to S$0.28.
In contrast, 2021 saw a total dividend paid out of S$0.322, but only S$0.12 of this was in cash.
The remaining S$0.202 comprised the distribution-in-specie of the units of CDLHT as described above.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
