CapitaLand in rights issue as net profit falls

AFP - Tuesday, February 10

SINGAPORE, Feb 9, 2009 (AFP) - CapitaLand, one of Asia's largest property firms, reported on Monday an 88.4 percent drop in fourth-quarter net profit, with lower sales revenue in China and Australia.

The company announced it is seeking to raise about 1.84 billion dollars (1.23 billion US) in a rights issue, but said it is doing so from a position of strength.

Net profit for the fourth quarter was 78.0 million dollars compared with 674.7 million during the same period a year earlier, said the firm, which operates shopping malls and the Ascott serviced residences, manages investment funds and develops residential properties.

Revenue in the fourth quarter fell 46.9 percent to 703.7 million from a year earlier, CapitaLand said, attributing the decrease mainly to lower sales from development projects in China and Australia.

Those declines were partially offset by higher sales from projects in Singapore, along with higher rental revenue and fund management fees, it said.

For the 2008 financial year CapitaLand reported a "healthy" net profit of 1.26 billion dollars, down 54.3 percent from the previous year while revenues fell 27.4 percent to 2.8 billion dollars.

Seventy percent of revenue came from overseas, mainly from Australia and China, the company said.

"The Group has significant financial strength to weather the global economic uncertainties," said Richard Hu, chairman of CapitaLand Group.

Under the rights issue, eligible shareholders will be able to subscribe to one new ordinary share for every two existing ones. The price of 1.30 dollars per share is a discount of about 45 percent from Friday's closing price.

"The rights issue is pre-emptive to strategically enhance the Group's financial flexibility," and to take advantage of an opportunity to improve its competitive position, said Liew Mun Leong, CapitaLand's president and CEO.

"We will also be well positioned for any mergers and acquisitions opportunities that might arise."

Singapore sovereign wealth fund Temasek Holdings has a 40 percent stake in CapitaLand.

*SOURCE*

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One of the most profitable company, CapitaLand, has their net profit drop 88.4 %.

U think is not good?

see the quote
"Net profit for the fourth quarter was 78.0 million dollars compared with 674.7 million during the same period a year earlier, "

STILL 78 MILLION PROFIT.. -.-"