Keppel Land Limited Unaudited Results for the Full Year Ended 31 December 2013

Transcription

1 MEDIA RELEASE Keppel Land Limited Unaudited Results for the Full Year Ended 31 December January 2014 The Directors of Keppel Land Limited advise the following results of the Company and of the Group for the full year ended 31 December These figures have not been audited. Presentation materials are available at and For more information, please contact: Media Relations Frances Teh Assistant Manager Group Corporate Communications Keppel Corporation Tel: (65) / Investor Relations Serena Toh General Manager Investor Relations & Research Keppel Land Tel:

2 PRESS RELEASE Keppel Land s Financial Highlights for the Year Ended 31 December January 2014 Keppel Land Performs Well Despite Challenging Market Conditions Record revenue of about $1.5 billion on strong contribution from residential projects Net profit before fair value gain grew 22% year on year to $583.7 million Overseas earnings rose 64% to $141.1 million on stronger contribution from China Property trading contributed 63% of profit at $271.8 million Profit from property investment surged by 52% year on year to $124.7 million Proposed dividend of 13 cents per share Keppel Land achieved record revenue of about $1.5 billion for 2013 on strong contribution from Singapore and China. Net profit before fair value gain grew 22% to $583.7 million in Including fair value gain, net profit was higher at $885.9 million. Overseas profits rose 64% to $141.1 million on greater contribution from China residential projects such as 8 Park Avenue and The Springdale in Shanghai. As a result, the proportion of overseas earnings surged to 33% of net profit before divestment and fair value gain, up from 19% in In line with the Group s strategy to proactively unlock value and recycle its assets, Keppel Land sold its stakes in Jakarta Garden City and Hotel Sedona Manado, in Indonesia. The divestments contributed $151.8 million to net profit. Net profit from property investment increased 52% to $124.7 million on stronger contribution from Marina Bay Financial Centre Tower 3 and Keppel REIT, as well as maiden contribution from Life Jinqiao in Shanghai, China. The Group s fund management business achieved net profit of $46.7 million, contributing about 11% of net profit. The Group s net asset value per share has increased by 13% to $4.52. The Board has recommended a final dividend of 13 cents per share for 2013, subject to approval by shareholders at the next Annual General Meeting to be held in April Financial Highlights ($m) Quarter Ended Year Ended 31 Dec Dec Dec Dec 12 Turnover , Pre tax Profit Before Fair Value Gain (1) (2) (3) (2) Net Profit Before Fair Value Gain (1) (2) (3) (2) Net Profit (1) (2) (3) (2) Net Debt/Equity Ratio (x) NAV/Share ($) (1) Includes gain from divestment of stake in Jakarta Garden City (2) Includes gain from divestment of 22.7% stake in Saigon Centre Phases 1 & 2 and Melia Purosani Hotel (3) Includes gain from divestment of stakes in Jakarta Garden City and Hotel Sedona Manado

3 Moderate Home Sales amidst Cooling Measures in Singapore Take up of new homes in Singapore was 32% lower at about 15,000 units in 2013, impacted by the Total Debt Servicing Ratio framework and Additional Buyer s Stamp Duty. Private residential prices continued to stabilise, chalking only a 1.2% increase in 2013 compared with 2.8% in Keppel Land sold 370 units in Singapore in 2013, mostly from its newly launched projects The Glades at Tanah Merah and Corals at Keppel Bay. The Group plans to launch its CBD fringe project located near Tiong Bahru MRT Station in the first half of this year, capitalising on limited new supply in the vicinity. According to CB Richard Ellis, the islandwide office take up was strong at an estimated 2.45 million sf for 2013, compared with 1.87 million sf in the previous year. Grade A rents grew 2.1% to $9.75 psf in the last quarter of 2013, after staying flat for three quarters. Commitment at Marina Bay Financial Centre Tower 3 rose to 95% as at end 2013, from about 79% a year ago. Strong Take up on Sustained Sales Momentum in China The Group sold 3,870 units in China in 2013, more than double the 1,650 units sold in Major projects which contributed to the strong take up include The Botanica in Chengdu as well as The Springdale and 8 Park Avenue in Shanghai. The Group will launch new projects such as Hill Crest Villa in Chengdu and Waterfront Residence in Nantong. Unlock Value for Capital Recycling The net proceeds of about $246 million from the sale of Jakarta Garden City and Hotel Sedona Manado will be reinvested in Indonesia, with focus on Jakarta. The Group has, yesterday, announced the acquisition of a well located site in Jakarta to be developed into over 1,200 homes and ancillary shophouses. Steady Growth for Fund Management Business The Group s fund management business continued to grow. Assets under management grew about 16% to $17.7 billion in 2013, as Keppel REIT and Alpha expanded their portfolios. Keppel REIT extended its footprint in Australia with the acquisition of stake in two Grade A office developments in Perth and Melbourne. Alpha s Alpha Asia Macro Trends Fund II, which achieved its closing of US$1.65 billion in June, made several acquisitions in Shanghai and Singapore. It recently acquired a site in Taipei, Taiwan, for the development of a business hotel. Sustainability Efforts Recognised on International Platforms Keppel Land is ranked 17 th among Corporate Knights Global 100 Most Sustainable Corporations in the World for 2014, the highest ranking among Asian companies and in the real estate sector worldwide. Keppel Land maintained its position in the Sustainability Yearbook 2014 for the fourth consecutive year, placing it among the top 15% of its industry for sustainability. The bar has been raised further this year and companies have to score within top 30% of the industry leader s score before they can be included. Moving forward, the Group will focus and scale up in its core markets of Singapore and China and growth markets of Vietnam and Indonesia. It will also invest opportunistically in markets with good growth potential such as Myanmar and Sri Lanka. It will grow its commercial portfolio overseas. The Group will continue to actively recycle capital to achieve higher returns. Disclaimer This release may contain statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. You are cautioned not to place undue reliance on such statements, which are based in the current views of Management on future developments and events.

4 KEPPEL LAND LIMITED OPENING REMARKS BY CEO ANG WEE GEE FULL YEAR ENDED 31 DECEMBER 2013 Good evening, it s good to see all of you here again. Welcome to Keppel Land s results presentation for the financial year has been a challenging year. Property cooling measures have started to slow down the Singapore residential market, while in China, cooling measures introduced earlier remained in place. Despite this, Keppel Land has performed well. I am pleased to announce a creditable set of financial results for We achieved a record revenue of $1.46 billion for the year. Net profit before fair value gain on investment properties is $583.7 million, a 22% increase over This was driven mainly by our China projects, property investment, and the sale of our stake in Jakarta Garden City. Strengthen Foothold in Key Markets When I took over the helm as CEO last year, I indicated that while our strategy of property development and property fund management remains unchanged, we will sharpen our focus in developing strong platforms to scale up our business in selected markets. We will also continually review our portfolio and seek opportunities to recycle capital for higher returns. We need to strike a good balance between spreading our exposure and risks and spreading our limited resources too thinly as we would need to scale up in our markets of focus to compete effectively against local players. Our countries of focus are Singapore, China, Indonesia and Vietnam. This degree of geographical diversification has served us well in reducing our risk exposure in any one market, helping us to mitigate against the market slowdown in Singapore last year, while

5 allowing us to dedicate our resources to scale up in these focus markets to compete well. We have set a target capital allocation of 35% to 40% each in the core countries of Singapore and China with the bulk of the remaining capital invested in the growth countries of Indonesia and Vietnam. For China, the focus will be on the five cities where we have a strong presence, namely Shanghai, Beijing, Chengdu, Wuxi and Tianjin. Notwithstanding our focus on these key markets, we will take an opportunistic investment approach in other promising markets, such as Myanmar and Sri Lanka, where we could capitalize on our first mover advantage. Aside from achieving a good balance in geographical diversification, we will also strive to achieve a healthy balance between investing for recurring and non recurring income. For 2013, 63% of our net profit is derived from property trading and 30% from property investment, with the balance from fund management and hospitality operations. This is in line with our target profit mix of 70% from property trading and 30% from the rest of our businesses. In line with our strategy to focus on our core markets, we invested more than S$1 billion in Singapore and China in We have been disciplined in acquisitions, investing selectively only in attractive sites and development. We acquired only one site in Singapore. This site is located at Tiong Bahru, at the fringe of the CBD, and will provide about 500 homes. Including this acquisition, Singapore residential asset makes up only one fifth of our total assets, and one third of our total residential assets. In China, we purchased two prime landed residential sites, one in Sheshan, Shanghai and the other in Tianjin Eco City. These sites will yield a total of about 550 landed homes targeted at affluent homebuyers.

6 We launched for sale a number of projects in China last year, including two new blocks at 8 Park Avenue and Seasons Residence in Shanghai, Stamford City in Jiangyin, and Park Avenue Heights in Chengdu. For the whole of 2013, we achieved strong sales of 3,870 homes in China, far exceeding the 1,650 homes sold in Sales were driven mainly by strong take up at The Springdale in Shanghai, The Botanica in Chengdu, and Stamford City in Jiangyin. To grow further in China, we formed a strategic alliance with the country s largest residential developer China Vanke so as to tap on the developer s insight and vast network in its home market. China Vanke, which plans to expand outside its stronghold, has taken a 30% stake in Keppel Land s The Glades at Tanah Merah. We are currently exploring similar collaboration with them in China. In Singapore, our residential sales were affected by the property cooling measures, particularly by the Total Debt Servicing Ratio (TDSR) restriction to mortgages. We sold 370 residential units for the year, compared with 430 units in Units sold were mainly from Corals at Keppel Bay and The Glades. In Vietnam, there are early signs of a market recovery and buyer confidence seems to be creeping back into the market. The Estella, our prime condominium development in Ho Chi Minh City chalked up improved sales of 170 units in Opportunistic Developments in Other Markets In Myanmar, we have commenced construction for a new tower for our hotel Sedona Yangon which will yield an additional 420 rooms when completed in late Within the next few months, we plan to launch The Belvedere, our first project in Colombo, Sri Lanka, a 279 unit condominium which is located close to the CBD, and enjoys panoramic views of the city and ocean.

7 Recycle Capital for Higher Returns In this current volatile economic environment, investors in general expect quicker returns from their investments. Our shareholders are no different. Therefore, we are constantly reviewing our portfolio to ensure maximum returns from our projects. In Indonesia, we seized the opportunities to divest our stake in Jakarta Garden City and Hotel Sedona Manado last year. Proceeds from both divestments totaling about $246 million will be reinvested into new opportunities in Indonesia, with a focus on Jakarta. One such opportunity is a well located 3.2 ha site in Jakarta that we acquired yesterday for $42 million. The site will be developed into 1,200 high rise condominiums targeted at middle income buyers. Phase 1 is expected to be launched for sale in We will continue to undertake a disciplined and proactive approach in the divestment of our assets to achieve higher returns for the company. Grow Commercial Portfolio We continue to build up our commercial portfolio in China. Keppel Land China, together with funds managed by our property fund management subsidiary, Alpha Investment Partners, has acquired a stake in Life Jinqiao, a completed retail mall in Shanghai. We also plan to develop Park Avenue Central in Shanghai into a retail cum office complex, to be completed around 2017/2018. In Indonesia, construction of Tower 2 of International Financial Centre Jakarta is underway. Located in the heart of the CBD, the development is the first in Indonesia to achieve the BCA Green Mark Platinum award. New supply of prime office space in Jakarta is very limited in the next several years and we are confident of the demand for it. Commitment at Marina Bay Financial Centre Tower 3 is now 95%, up from 79% a year ago. Demand for Grade A office space remains firm with new tenants coming from an

8 array of industries, including legal and consulting, energy, commodity and other business services sectors. For 2013, our fund management businesses under Keppel REIT and Alpha Investment Partners have also performed well. Alpha Investment Partners, our private fund management vehicle, raised more than US$1.65 billion for its Alpha Asia Macro Trends Fund II, exceeding its target of US$1 billion. Keppel REIT acquired stakes in two prime commercial developments: 8 Exhibition Street in Melbourne and Old Treasury Building in Perth, expanding its footprint in Australia. Meanwhile in Singapore, all Keppel REIT s properties are now fully occupied. Advances in our Sustainability Journey Apart from chalking up a commendable financial performance, Keppel Land has made much progress in its sustainability journey and gained recognition for its achievements, garnering a number of prestigious local and international awards last year. This afternoon, it has just been announced that Keppel Land is ranked 17 th among the Global 100 Most Sustainable Corporations in the World at the World Economic Forum in Davos, Switzerland. The Global 100 ranking assesses large cap companies worldwide on a range of sustainability metrics. In the Global 100 ranking, Keppel Land is placed first among Asian companies and first in real estate sector worldwide. Competing on Innovation To stay ahead in this highly competitive landscape, we will need to constantly re invent ourselves. We need to build a company culture that is open, collaborative, entrepreneurial and innovative. One good example of innovation in our product design is the green wall we built at Ocean Financial Centre, which was awarded Guinness World Record s largest vertical garden in the world. Another example is the moveable internal wall at The Glades which creates space by concealing furniture when not in use. This is

9 a testament of our ability to create innovative designs and reflects the rationale behind our branding campaign with the tagline Thinking Unboxed 思无限创非凡. Outlook for 2014 The market outlook for 2014 is mixed. While Asia is expected to see continued economic growth, concerns over the end of quantitative easing in the US and continued property restrictions in Singapore and China will weigh in on the property market. In Singapore, residential projects in attractive locations with good access to amenities will hold up better even if market conditions remain challenging. The government has also provided some stability to the property market by reducing supply through fewer land sales for the second half of The demand for Grade A office market is expected to be good with continued economic growth. New supply is limited over the next several years. In China, urbanization and rising affluence will continue to drive demand for quality homes and offices. In the longer term, the relaxation of the one child policy is likely to have a positive impact on sales of homes. Going forward, we will continue to seek opportunities in our core and growth markets. Our healthy balance sheet puts us in good stead to capitalise on promising investment opportunities. We will continue to be disciplined in our investment decisions and be proactive in recycling our capital to bring good returns to our shareholders in the challenging year ahead. I will now hand over to our CFO, Mr Lim Kei Hin, for a review of Keppel Land s full year performance. Thank you.