BTO: CapitaLand expects weaker 2009: CEO

Business Times - 24 Apr 2009

AGM WATCH
CapitaLand expects weaker 2009: CEO

But all business segments should be profitable this year, says Liew Mun Leong

By UMA SHANKARI

 

CAPITALAND'S financial performance is expected to be weaker this year than last year, chief executive Liew Mun Leong told the company's annual general meeting yesterday.

 

But the property group still expects all its business divisions - including residential, retail and serviced residences - to stay in the black.

 

'I think that what we have done in the past few years will hold (us) up in 2009 as well,' Mr Liew said.

 

But he acknowledged that this year will be worse than 2008, when CapitaLand reported a net profit of $1.26 billion - about half that in 2007.

 

Mr Liew said that all business segments should be profitable this year, with shopping malls and serviced residences, held under The Ascott Group, expected to put up a good showing.

 

On CapitaLand's China business, he said: 'For us, China will be good. I think China will be our saviour.'

 

Last year, 45 per cent of the group's $2.2 billion earnings before interest and tax (Ebit) came from China. Singapore, the next largest market, contributed 40 per cent.

 

Earnings in Singapore this year will underpinned by profit recognition from sales at two residential projects - the 327-unit Seafront on Meyer and the 175-unit Orchard Residences.

 

One shareholder asked yesterday whether CapitaLand intends to maintain its current level of dividends. Last year, it paid a total of seven cents a share.

 

Chairman Richard Hu said that the dividend for 2009 will depend on the company's performance, adding that its policy is to maintain sustainable dividend payouts.

 

Shareholders questioned the board on two other matters - the accrued bonus of $20.52 million awarded to Mr Liew in 2007, and whether the company intends to return cash to shareholders.

 

CapitaLand had $4.2 billion cash at end-2008 and said in an update yesterday that it improved its cash liquidity to $5.5 billion following a recent rights issue. One shareholder asked: 'Can you return a few cents back to the shareholders?'

 

On Mr Liew's remuneration, CapitaLand reiterated that it used the economic value-added (EVA) indicator to calculate his bonus.

 

His award for 2007 was a reward for the group's record profit of $2.76 billion that year, more than double the $1.01 billion it made in 2006.

 

As for the massive war chest, CapitaLand will use it to 'take full advantage of all the tremendous opportunities we will see in the next year or two', said chief financial officer Olivier Lim.