CityDev year net doubles, sees positive 2008

SINGAPORE (Reuters) - City Developments Ltd (CTDM.SI), Southeast Asia's second-largest property developer, more than doubled its 2007 profit on home sales and hotel revenues, beating market forecasts, and said it was upbeat despite the global credit crisis.

CityDev said global economic uncertainty has caused property investors to hold back on buying, but added it was in a strong financial position to weather the storm for the next three years.

The company's shares climbed nearly 4 percent, before closing up 1.3 percent, beating the broader market .FTSTI, which dipped 0.7 percent.

CityDev said it sold 1,655 units last year with a sales value of S$3.38 billion ($2.42 billion), and would recognize profits on these as construction progressed.

"Property development will continue to make a significant contribution, with locked-in profits yet to be recognized from pre-sold residential projects," Executive Chairman Kwek Leng Beng said in a media briefing.

Private home prices in Singapore jumped more than 31 percent last year, boosting CityDev and local rivals CapitaLand (CATL.SI) and Keppel Land (KLAN.SI).

But home prices in the city-state rose a slower 6.8 percent in the fourth quarter, and are expected to moderate further this year, reflecting investor concerns about global growth and the effect of government steps to cool the market.

CityDev, which books most of its home sales from high-end apartments in Singapore, said it expects the city-state to remain attractive to the local and global investment community due to the sustained growth of Singapore's restructured economy.

"Many people are afraid the high-end segment will collapse. But those in the high-end are rich people with better holding power," Kwek said.

CityDev said it plans to launch for sale 427 units of mostly high-end condominiums in Singapore in the first half of the year.

Kwek declined to say how much cash CityDev has for acquisitions, but said it was exploring new investments or acquisitions in markets such as South Korea, China, and Vietnam.

HOTELS

CityDev posted full-year net profit of S$725 million, against S$351.7 million a year ago, beating a market forecast for S$625.4 million. According to Reuters calculations, fourth-quarter earnings jumped 72 percent to S$235 million from S$137 million.

"The results came in above everyone's expectations," said CIMB analyst Donald Chua. Analysts had expected a slide in fourth quarter earnings due to the absence of one-off gains.

The full-year results did not take into account revaluation gains on its investment properties, which would have boosted full-year earnings to S$2.8 billion, the company said.

CityDev's 53 percent-owned Millennium & Copthorne (MLC.L), which operates 112 upmarket hotels globally, including in New York, London and Singapore, said last week its pretax profit rose 21 percent to 157.4 million pounds ($307 million).

Kwek said CityDev's hospitality business was unlikely to be affected by the uncertainty resulting from the global credit crisis, due to the geographical spread of its hotels.

CityDev said it earned 53 percent of its 2007 pretax profits from property development, with its hotels contributing 30 percent, and rental properties adding 14 percent.

Shares in CapitaLand rose 1.1 percent, while KepLand was 0.5 percent higher.

(Editing by Neil Chatterjee and Valerie Lee)