CapitaLand, Southeast Asia’s biggest developer, said third-quarter profit fell 43%, as the sale of shopping malls to subsidiaries reduced rental income and residential development earnings slipped.
Net income fell to $159.6 million in the three months ended Sept. 30 from $281.3 million a year earlier, the company said today in a Singapore stock exchange statement. Revenue slipped to $684.6 million from $1.05 billion.
Lower earnings were “mainly attributable to lower development profits from Singapore residential projects,” the company said in the statement. Rental income fell after CapitaLand sold Clarke Quay to CapitaMall Trust and three shopping malls to CapitaMalls Malaysia Trust in July.
CapitaLand is counting on strong economic growth in Asia to boost demand for property in the company’s markets ranging from Singapore to China. Home prices in 70 major cities in China climbed 9.1% in September from a year earlier, according to the National Development and Reform Commission.
China’s economy grew 9.6% in the third quarter, the government said this month. Singapore expects its gross domestic product to increase as much as 15% this year, eclipsed only by Qatar’s 16%.
CapitaLand closed 0.3% lower at $3.89 in Singapore trading today. Its shares have fallen 7.4% this year, compared with the 8.5% gain in the Singapore benchmark Straits Times Index.
Chief Executive Officer Liew Mun Leong said in August that the developer’s assets in China, which also include serviced apartments and shopping malls, exceeded those in Singapore.
CapitaMalls Asia, CapitaLand’s retail property unit, yesterday said third-quarter profit rose 14% to $68 million, as its retail business benefits from Asia’s economic growth.
“Against a backdrop of firm fundamentals, we are optimistic that all our business units will achieve strong operating performance for the year,” Liew said in today’s statement.