SINGAPORE (Feb 25): Driven by stronger recurring income and contribution from more mature property assets, CapitaLand has reported its highest full-year earnings in a decade for FY2018. In a sign that the company’s scale and financial muscle is coming to bear, CapitaLand achieved yet another year of improvement in return on equity.
In FY2016, CapitaLand’s ROE was just 6.6%; it improved significantly to 8.6% the following year. The investment community then challenged CapitaLand’s management to sustain the trend — and it did, with a 9.3% ROE for FY2018, which is described as “high water mark” by group chief financial officer Andrew Lim. "We are quite confident we should be able continue to deliver returns that is higher than cost of equity and we aspire to reach sustainable double-digit ROE," says group CEO Lee Chee Koon at the results briefing on Feb 20.
For 4Q ended Dec 31, 2018, CapitaLand’s profit after tax and minority interests (Patmi) improved 71% y-o-y to $475.7 million, underpinned by better operating performance. The company enjoyed higher gains from asset recycling and revaluations of investment properties as well. Revenue in the same period increased 34% y-o-y to $1.62 billion.