City Developments Limited (CDL) posted strong results for Q1 2019 with profit increase of 133.8% to S$199.6 million (restated Q1 2018: S$85.3 million). This comes on the heels of strong profit margins for development projects and the realisation of the S$144.3 million pre-tax gain from the divestment of Manulife Centre, which is in connection with CDL’s second Profit Participation Securities (PPS) structure developed in 2015.

In terms of business segments, rental properties took the lead in Q1 2019, contributing 68% in pre-tax profits primarily attributable to the divestment of Manulife Centre and contributions from recent acquisitions.

The property development segment was the next strongest contributor, largely supported by several of the Group’s key local projects including 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. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 51.1% to S$357.4 million (restated Q1 2018: S$236.6 million), underpinned by the strong contribution from the rental properties segment.

As at 31 March 2019, the Group’s net gearing ratio (without factoring any revaluation surplus from investment properties) stood at 36% with interest cover at 16.3 times and cash reserves at S$2.4 billion. Click here for CDL’s Q1 2019 results for more details. 

CDL Group Chief Executive Officer Mr Sherman Kwek has also been appointed the company’s Executive Director. Click here for more information. 

Millennium & Copthorne Hotels plc

Millennium & Copthorne Hotels plc (M&C) posted Q1 net profit of £1 million, compared to £8 million the year before. Group revenue per available room was down 0.9% at £70.01 for the quarter ended March 31, while revenue fell 4% to £215 million on a constant currency basis. The revenue decrease was mainly due to ongoing renovations affecting major hotels in two of the Group’s key gateway cities, London and Singapore.

The London Mayfair property – partially closed in November 2017 and then fully closed in July 2018 – is looking to re-open in mid-2019 as the Biltmore Mayfair under the prestigious Hilton LXR flag. The Orchard Hotel in Singapore has been under phased refurbishment since mid-2017 with work due to complete in Q2 2019.
 
M&C Chairman Mr Kwek Leng Beng said, “Despite the uncertainties and challenges in the global economy, we remain focused on making the best use of our hospitality assets. The Group is prioritising the refurbishment of our key gateway city properties to reposition our hotels, whilst seeking to minimise the short-term negative impact on our trading results.”

Click here for M&C’s Q1 2019 results for more details.

CDL Hospitality Trusts (CDLHT) recorded a 10.7% decrease in Net Property Income (NPI) to S$33.8 million in 1Q 2019, from S$37.82 million in 1Q 2018. The lower NPI was mainly due to extensive enhancement works at Orchard Hotel in Singapore and Raffles Maldives Meradhoo in the Maldives.

The absence of the meetings hosted during Singapore’s Chairmanship of ASEAN and biennial Singapore Airshow this year, as well as rooms taken out of inventory for ongoing pipe works for two other hotels, also contributed to lower NPI for the Singapore Hotels.

Reduced contribution from New Zealand, Australia and UK hotels was also due in part due to the weaker currencies of these markets. However, the collective decline was partially mitigated by inorganic contribution from Hotel Cerretani Florence in Italy and better performance of Pullman Hotel Munich in Germany.

Interest expense for 1Q 2019 was higher by S$1.3 million mainly due to additional loans for the acquisition of Hotel Cerretani Florence, renovation works and higher funding cost. Overall, CDLHT recorded total distribution to Stapled Securityholders of S$25.3 million and Distribution Per Stapled Security (DPS) of Singapore 2.09 cents for 1Q 2019.

Click here for CDLHT’s Q1 2019 announcement for more details.

Hong Leong Finance

Hong Leong Finance (HLF) posted a 1.5% rise in net profit to S$26.2 million for the first quarter ended March 31. Total interest income and hiring charges rose 18.4% to S$95.2 million driven by loan growth and a higher average loan yield.

Interest expense including interest on lease liabilities, rose 42.3% to S$13.0 million due to a larger deposits base and higher funding cost, which led to a smaller magnitude of increase in the company's bottom line. Net interest income and hiring charges increased 3.6% to S$51.5 million. Earnings per share was 23.54 Singapore cents, compared to 23.22 cents a year ago.

Allowances for loans and other financial assets for Q1 were net recoveries of S$349,000, arising from higher bad debts recovered and lower expected credit loss allowances for non-credit impaired loans. Net loan assets stood at S$10.442 billion for the period under review. Deposits and balances of customers amounted to S$11.4 billion as at end March, up 0.5% or S$59 million from a year ago.

Looking ahead, HLF said it will continue to practise prudence in its lending activities given the slowing economy, uncertainties in interest rate environment and gloomier outlook in major economies.

Click here for HLF’s Q1 2019 results for more details.  

Hong Leong Asia

Hong Leong Asia (HLA) posted a net profit from continuing operations of S$12.2 million in Q1, up 3.9% from the same period a year earlier. Revenue in the three months ended March 30 was S$961 million, down 5.6% from the same period a year earlier.

Building Materials Unit’s (BMU) revenue rose S$11.8 million or 11.6% from the same period a year earlier, mainly due to improved performance of the Singapore operations as the construction industry recovers. In Malaysia, the group's subsidiary Tasek saw a fall in sales volume for the cement segment. HLA said the prolonged intense pricing competition continued to affect the contribution margin of Tasek in Q1.

Earnings per share was 1.63 Singapore cents, up from a loss of 1.46 cents in Q1 last year. Net asset value per share was 103.45 Singapore cents as at March 31, up from 99.87 cents as at Dec 31 last year.

Click here for HLA’s Q1 2019 results for more details. 

China Yuchai International Limited

China Yuchai International Limited (CYI) reported net profit of RMB 273.4 million, a drop from RMB 328.2 million from the same period in 2018. Net earnings attributable to shareholders was RMB 198 million. Net revenue for the quarter declined by 4.0% to RMB 4.2 billion compared to RMB 4.3 billion in 2018, mainly due to a lower number of engines sold and a change in product mix due to market conditions, which was partially mitigated by a higher average selling price.

It sold 101,300 engines in the first quarter, down 8%, due to lower engine sales in the truck and bus segments which was partially offset by higher engine sales in the off-road segment, led by higher engine sales in the agricultural equipment market. Research & Development expenses decreased by 40.1% to RMB 71.9 million, due to capitalisation of development costs for China's National VI and Tier 4 engines. The expenses reflect development and testing of new engines to meet higher emission standards and further efforts to enhance engine quality and performance.

CYI President Mr Hoh Weng Ming said, “We are well positioned with our broad portfolio of National VI and Tier 4 engines to meet the challenges of the new upcoming emission standards. Our new joint venture with Eberspaecher Exhaust Technology International GmbH will provide a ready supply of these important emission systems for the future.”

Click here for CYI’s Q1 2019 results for more details.

First Sponsor Group

First Sponsor Group recorded 39% rise in net profit to S$23.8 million for the three months ended March 31, from S$17.1 million a year ago. This was partly due to a “strong showing” of its property financing business segment which made a gross profit of S$21.8 million, up 87% from S$11.6 million a year ago (excluding one-off penalty interest).

Revenue for Q1 dropped 5.2% to S$45.3 million, due to revenue drop from the sale of properties and rental income from investment properties, offset by revenue increases in property financing and hotel operations.

Revenue from the sale of properties dropped 37% to S$8.8 million, due mainly to the recognition of revenue from fewer units in the group’s Millennium Waterfront project. Rental income from investment properties decreased 15% to S$3.0 million, due to absence of a one-off service income of S$400,000 charged for Q1 2018 by the group to its 50%-held joint venture that owns the leased Le Meridien Frankfurt Hotel.

Hotel operations revenue rose 8.9% to S$10 million due mainly to the full-quarter contribution from Hilton Rotterdam Hotel which was leased by the Group since February 2018. This was partially offset by the absence of contribution from M Hotel Chengdu which ceased operations in July 2018.

Revenue from property financing increased 11.6% to S$23.5 million due mainly to the larger average loan portfolio for the current quarter. This was partially offset by the absence of a one off net penalty interest income of S$7.7m in same quarter last year. Earnings per share stood at 3.43 Singapore cents, up from 2.64 cents the year before.

Click here for First Sponsor’s Q1 2019 results for more details.