- City Developments reported a muted 1H23 that was impacted by one-off items and financing costs as well as a poor comparison vs 1H22 that included a large divestment gain from its hotel segment. Stripping out the exceptional items, EBITDA rose 48% y-o-y which was above our expectations.
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A muted first half.
- City Developments (SGX:C09) reported revenue of S$2.7b for 1H23 (+84% y-o-y) which was boosted by the completion of the Piermont Grand Executive Condominium (EC) and thus full revenue recognition of the project. Its EBITDA of S$478m (excluding divestment gains and impairments) was 48% higher than the year-ago period and beat our expectations but missed consensus’.
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- A special interim dividend of S$0.04/share was declared (1H22: S$0.12). See City Developments's dividend date.
- The S$34m impairment loss seen in 1H23 related to City Developments’ UK investment properties witnessed a 20-50bp in cap rate expansion, thus leading to a drop in its valuation. Although financing costs in the UK has risen by 4x vs same period last year, City Developments' management sees near-term stabilisation and continues to believe that its UK investment properties have bright prospects.
- In addition to the impairment loss, there was also a fair value loss on property-linked notes for an Australian project (S$20m).
Singapore residential sector looking stable.
- Read more at SGinvestors.io.
