City Dev

City Dev: Good set of FY12 results, which was in-line. 4Q12 rev at $886.4m, +23% yoy and net profit at $249.3m, +53% yoy. Result brings FY12 rev to $3.4b, +2.2% and net profit to $678.3m, -15%. Gross margins at 49.5% vs 54% yoy. Excluding one off gains, FY12 net profit would have been up 5.8%. Strong results was backed by better performance from the property development segment Projects that contributed to both rev and profit for 2012, whose projects included Volari, NV Residences, 368 Thomson, Cube 8, Hundred Trees, Tree House, The Glyndebourne, Buckley Classique and H2O Residences. For grp’s hotel operations, FY12 hotel ops rev remained relatively constant at $1.5b, flat yoy, while FY12 rental properties saw rev increase 8.1% to $303.8m, primarily due to rev generated from a retail mall in Thailand which the Group acquired in 1Q12. Despite the increase in rental properties rev, pre-tax profit for FY 12 decreased due to substantial gains recognised on the sale of The Corporate Building, The Corporate Office and a strata unit in GB Building in 2011. On grp’s others segment, rev remained relatively constant at $99.4m (FY11: $92.5m). The increase was primarily due to higher management fee income, partially offset by lower dividend income received. Going forward, grp note that 2013 remains unpredictable on the global economic front, though there is some positive recovery, albeit slow. Besides residential developments in SG, will also focus on deriving more earnings from its overseas growth engines. Existing platforms include its hotel operations which is a key contributor - in particular M&C’s over 100 global hotels and its hospitality REIT. For its foray into China market, it has FSCL (M&C’s associate) which has established a proven track record in China and upcoming projects via its wholly-owned CDL China Limited; plus other investment properties in the region. The Grp expects its revenue from its overseas investments to grow. At current price, grp trades at 1.4x P/B, with a low gearing of 25%. Grp is recommending a special div of 5.0c per share in addition to the ordinary div of 8.0c per share. The total dividend proposed for 2012 amounts to 13c/share. (1.2% yield).