SINGAPORE (May 15): City Developments (CDL) has announced earnings of $199.6 million for the 1Q ended March, rising 133.8% from restated 1Q18 earnings of $85.3 million on strong profit margins and the realisation of a pre-tax divestment gain.

The bottomline growth came despite a 29.5% y-o-y decline in revenue to $746.2 million from $1.06 billion a year ago, in the absence of revenue recognition from The Criterion executive condominium (EC) in its entirety over the previous quarter.

Excluding contributions from The Criterion, the group says 1Q19 revenue would have increased by 6% due to healthy residential sales in Singapore and China.

In Singapore, CDL and its joint venture (JV) associates sold 173 residential units with a total sales value of $516.3 million, as opposed to 459 units valued at $792.6 million in 1Q18, due to the higher-margin Boulevard 88 project along Orchard Boulevard.

In China, the group’s wholly-owned subsidiary CDL China Limited (CDL China), together with its JV associates, sold 113 residential units and one villa in 1Q, achieving a total sales value of RMB 358.8 million ($72.0 million).

Rental properties led profit growth in terms of business segments due to recent acquisitions and the divestment of Manulife Centre.

This was followed by the property development segment due to key local projects such as Gramercy Park, New Futura, The Tapestry, Whistler Grand, South Beach Residences – as well as overseas projects like Hong Leong City Center in Suzhou and Hongqiao Royal Lake in Shanghai.

The hotel operations segment, however, registered a loss over the quarter due to factors that include a challenging US region where it continued to be loss-making, on top of refurbishments that affected two major hotels in the group’s key gateway cities of London and Singapore, as well as higher financing costs.

Over the quarter, the group also recognised a $144.3 million pre-tax gain from the divestment of Manulife Centre, which is in connection with the CDL’s second Profit Participation Securities (PPS) structure developed in 2015.

“While Singapore will always remain our home ground, our overseas efforts have borne fruit and provided much needed diversification to our earnings. Although global economic and political events have led to market uncertainties, our geographically diversified and income-stable portfolio in Singapore and overseas will enable us to better navigate through these challenges. At the same time, we will continue to actively explore attractive investment opportunities to grow our business,” comments CDL’s executive chairman Kwek Leng Beng.

Shares in CDL closed 0.7% higher at $8.68 on Tuesday.