Same Mall NPI growth
Published October 20, 2011
CMA's Q3 net down 30% at $36.5m
By MICHELLE TAN
CAPITAMALLS Asia's (CMA) third quarter net profit plunged 30.3 per cent, or $15.9 million, year-on-year, to $36.5 million.
This was due mainly to two factors: an additional provision under administrative expenses of $4.7 million relating to its secondary listing in Hong Kong and the inclusion in the year-ago comparative period of an $8.7 million gain from the divestment of three malls in Malaysia to CapitaMalls Malaysia Trust.
Gross profit actually went up 76 per cent year- on-year to $44 million as revenue for the three months ended September 2011 surged 57.3 per cent to $66.9 million on the back of rental contributions from CMA's recently acquired Queensbay Mall in Malaysia, higher management fees, and stronger takings from fund management entities.
Finance costs were also 47.2 per cent higher at $8.3 million. The quarter also saw a $4 million foreign exchange loss arising from depreciation of the yuan against the Singapore dollar in relation to funds denominated in yuan.
Income tax expense fell 77.4 per cent to $1.43 million. 'In Q3 2011, the lower tax was mainly due to write-back of over-provision of tax for prior years and absence of one-off tax provision in relation to the divestment gain arising from the sale of the three malls in Malaysia,' said CMA.
Earnings per share fell to 0.9 of a cent in Q311 from 1.4 cents the year before.
Cash levels have also fallen due to loans extended out for a Jurong project along with payments for the acquisition of Raffles City Changning and the Luwen project.
As at end-September, CMA stands in a net debt position of $342,253 as compared to a net cash position of $618,360 at the end of last year.
Commenting on CMA's earnings performance this season, Sai Min Chow from Nomura Equity Research said that despite what appears to be lower-than-expected Q311 earnings, he expects the market's immediate reaction to this set of results to be neutral to positive as the impact of cost pressures from pre-operating expenses on CMA's FY11's forecast results is 'expected' and as such, is likely to have been priced in by the market.
More importantly, there have been 'sequential improvements in CMA's operations' during its Q3, noted Mr Sai.
Income at the consolidated malls doubled quarter- on-quarter in China and committed occupancy at Minhang Plaza and Hongkou Plaza improved from 96 per cent to 98 per cent and from 87 per cent to 90 per cent respectively during the period.
With regard to the counter's dual listing in Hong Kong, CMA made its debut on that bourse earlier this week, though interest remains muted as global headwinds continue to weigh on overall sentiment.
For the first three quarters of 2011, CMA reported a 25.7 per cent increase in net profit to $250.6 million from $199.3 million for the previous corresponding period.
This translates to 93.6 per cent of Bloomberg's full-year consensus earnings estimate of $267.6 million for the group.
Revenue for the nine months declined 5.4 per cent to $179.9 million from $190.2 million last year.
CMA chairman Liew Mun Leong said that despite the uncertain economic backdrop, Asia remains a growth region for the group.
'Our key markets of Singapore, China, and Malaysia are all expected to post economic growth in 2011 - about 5 per cent for Singapore, 9.5 per cent for China, and between 5 per cent and 5.5 per cent for Malaysia. Retail sales also continue to grow in all three markets and this bodes well for our portfolio of well-located and mainly suburban malls catering to necessity shopping,' said Mr Liew.
In particular, CMA remains optimistic about its growth prospects in China and will be opening another three malls by the end of the year.
On the stock market yesterday, CMA ended one cent higher at $1.25.