FY 2011 Annual performance of City Development and CapitaLand

Annual performance of City Development is compared against CapitaLand’s in this post.

City Development
Net Profit attributable to shareholders $ 798 million (1.9% increase)
Return on Equity 11.7% (declined by 0.8% point)
EPS      86.4 cents (increased by 1.6 cents)
Total cash dividend per share (including 5 cents special dividend) 18 cents (20.8% of EPS)
Dividend yield 1.62% (based on 2 March share price of $11.10)
Net Asset Value per share $7.51 (increased by 62 cents)
Price to Earnings ratio   12.85 times
Price to Book ratio 1.48 times
Net Gearing 21% (29% for FY2010)
Cash and cash equivalents $2.48 billion ($1.86 billion in FY2010)

CapitaLand
Net Profit attributable to shareholders $1.06 billion (25.8% drop)
Return on Equity 7.3% (declined by 3.2% points)
EPS     24.8 cents (lower by 8.7 cents)
Total cash dividend per share (including 2 cents special dividend) 8.0 cents (32% of EPS)
Dividend yield 2.61% (based on 2 March share price of $3.07)
Net Asset Value per share $3.51 (increased by 22 cents)
Price to Earnings ratio   12.38 times
Price to Book ratio 0.87 times
Net Debt to equity 0.31 times (0.18 times for FY2010)
Cash and cash equivalents $6.2 billion ($7.12 billion in FY 2010)

CapitaLand’s net profit declined 25.8% whereas net profit for City Development showed a modest improvement of 1.9% for 2011. Return of Equity for CapitaLand was 7.3% which was so much lower than City Development’s 11.7%. City Development performed better last year. Earnings per share for City Development was 86.4 cents and for CapitaLand was lower at 24.8 cents.

City Development proposed a total dividend of 18 cents, which includes a special dividend of 5 cents. CapitaLand proposed total dividend of 8 cents, which includes 2 cents special dividend. In terms of dividend yield based on current share price, CapitaLand has a better dividend yield at 2.61% against City Development’s 1.62%.

Price to Net Asset Value per share is lower for CapitaLand at 0.87 times against 1.48 times for City Development. Shareholders of CapitaLand were not willing to pay above its net asset value. This was the same case as in 2010.

In terms of historical price-to-earnings ratio, both City Development and CapitaLand are nearly the same, $12.85 against $12.38. As we move from here, the share prices will adjust based on investors’ feel for the forward-earnings of both companies.

CapitaLand had cash and cash equivalents of $6.2 billion, which was huge compared to $2.48 billion for City Development. CapitaLand’s cash position declined over the year but City Development added more to it. Borrowing of CapitaLand went up over the year but City Development reduced its borrowing.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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