City Developments posts good results and looks forward to a better year

City Developments Limited or better known as CDL, posted a 4.5% increase in revenue for 1Q2006 compared to 1Q2005. This higher revenues resulted in an increase in gross profits to S$287.6 million which was 9.8% higher compared to 1Q2005. The main drivers for the higher revenues and earnings is attributed to new development properties especially from its successful launch of The Sail at Marina Bay and City Square Residences. Net profit for the whole period increased by only 2.3% from S$40.3 million in 1Q2005 to S$41.2 million in 1Q2006. This is due to lower contribution from its Millenium & Copthorne hotel arm as pre-tax profit contribution from M&C dropped to S$27 million from S$59.3 million.

As Singapore's second largest property developer by market capitalization, the company is expected to launch 2 much awaited projects including the St. Regis Residences in Singapore and the Sentosa Cove project. In addition, the revaluation theme is likely to continue for its properties in Singapore which includes Republic Plaza. Property looks set to be the focus in the next few months as a result of the announcement of the IR winner in Singapore and counters like CDL should see some minor appreciation.