City Developments - DBS Research 2025-02-27: Weathering The Temporary Storm

• City Developments’ FY24 operating profit and net earnings declined to S$686mil (-16% y-o-y) and S$201mil (-37% y-o-y) respectively, underperforming expectations. This was due to
  1. - Read this at SGinvestors.io -
  2. construction delays for certain projects in 2024 that impacted the profit recognition schedule; and
  3. higher financing costs, with interest expense up 21% y-o-y to S$589mil as average cost of debt inched up to 4.4% in FY24 from 4.3% in FY23.
• Revenue from the investment properties segment grew 11.1% y-o-y in FY24, driven by acquisitions, including St Katharine Docks in London and several living sector assets in Tokyo and Osaka, as well as the reopening of Jungceylon Shopping Center in Phuket after AEI.
• - Read this at SGinvestors.io -

FY24 total dividend of S$0.10 (down from S$0.12 in FY23)

• The final dividend of 8 cents per share brings the total City Developments' dividends for FY24 to 10 cents per share (a 47% payout ratio, higher than the usual 33%), but down from 12 cents per share in FY23.
• As for additional share buybacks, they are likely on hold as the group focuses on reducing debt.

Divestments should remain a key focus in 2025

• Read more at SGinvestors.io.

Derek TAN DBS Group Research | Tabitha FOO DBS Group Research | https://www.dbs.com/insightsdirect/ 2025-02-27 SGinvestors.io

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