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CapitaLand Limited
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
Financials &
Additional
Information
Earnings Before Interest and Tax (EBIT) Analysis
The Group achieved EBIT of S$2.3 billion in FY 2015,
which was 5.0% lower than FY 2014’s EBIT of S$2.4 billion.
The details of the Group’s EBIT are as follows:
FY 2015
FY 2014
S$ million % S$ million %
Operating profits
1,841.0 80
1,716.4 71
Revaluation gains
632.9 27
904.5 37
Portfolio gains/(losses)
27.2
1
(17.7) (1)
Impairments
(185.1) (8)
(166.3) (7)
EBIT from continuing
operations
2,316.0 100
2,436.9 100
Operating profits in FY 2015 were higher by 7.3% at
S$1.8 billion; driven by gains on the change in use of
development properties for sale to investment properties,
improved performance from the shopping mall and serviced
residence businesses as well as a gain on repurchase of
convertible bonds. The increase was partially offset by
lower residential margins arising from different product
mix, absence of contribution from the sale of Westgate
Tower and a forfeiture deposit arising from an abortive deal
in Vietnam.
In terms of revaluation gains, the Group recorded a net
fair value gain of S$632.9 million at the EBIT level as
compared to S$904.5 million in FY 2014. The decrease
in fair value gains from investment properties were mainly
from Singapore, China and Malaysia, but this was partially
mitigated by higher fair value gains from investment
properties in Japan, Vietnam, Australia, Europe and
The United States of America.
At the EBIT level, the Group recognised a net portfolio gain
of S$27.2 million as compared to a loss of S$17.7 million in
FY 2014. The gains in FY 2015 arose mainly from divestment
of a mall in Singapore and a serviced residence property
in the Philippines as well as realisation of foreign currency
translation reserve of CapitaLand China Development Fund
Pte. Ltd. (CCDF), partially offset by loss on the dilution of
CCT’s interest in MRCB-Quill REIT.
The Group has made a net provision for impairment and
foreseeable losses totalling S$185.1 million in FY 2015,
mainly in respect of the residential projects in Singapore
and China due to project specific challenges.
Singapore and China markets remain the key contributors to
EBIT, accounting for 79.0% of total EBIT (FY 2014: 83.5%).
Singapore EBIT was S$920.0 million or 39.7% while China
EBIT was S$910.3 million or 39.3% of total EBIT. In terms of
EBIT contribution by asset classes, approximately 77.4% of
the Group’s EBIT came from its investment properties portfolio
which is recurring in nature. In addition, approximately 52.9%
of the Group’s earnings before interest, tax, depreciation
and amortisation (EBITDA) were from developed markets
in Singapore, Europe, United States of America, Australia,
Japan, Korea and Hong Kong.
EBIT contribution from CapitaLand Singapore was 38.2%
lower at S$496.4 million in FY 2015 mainly due to the
absence of profit contribution from the sale of Westgate
Tower, lower revaluation gain recognised in respect of
CapitaGreen which obtained Temporary Occupation
Permit in FY 2014, higher provision for foreseeable losses,
lower operating EBIT as well as the dilution loss of CCT’s
interest in MRCB-Quill REIT.
In line with the higher revenue, CapitaLand China registered
a 62.4% increase in EBIT at S$664.6 million in FY 2015.
CL China’s EBIT was also boosted by higher fair value gains
from revaluation of properties, partially offset by higher
provision for foreseeable losses for development projects
as well as the absence of reversal of costs accruals upon
finalisation of a project in FY 2014.
CapitaLand Mall Asia’s EBIT in FY 2015 was S$794.3 million
which was 16.0% lower than FY 2014’s EBIT of S$945.2
million. The decline was largely due to the absence of
profit recognition for the sale of Westgate Tower and
lower revaluation gains on investment properties; partially
mitigated by higher contribution from Westgate mall in
Singapore and malls in China, as well as share of CapitaLand
Mall Trust’s gain from the divestment of Rivervale Mall.
EBIT from Ascott was S$326.0 million, which was 9.6%
higher than FY 2014. This was mainly attributable to
contribution from newly acquired or opened properties,
higher fee income and portfolio gains, partially offset by
lower fair value gains from the revaluation of investment
properties.
Corporate and Others EBIT in FY 2015 was higher due to
the lower impairment charges, a gain on repurchase of
convertible bonds and portfolio gains as compared to a
loss in FY 2014. The increase was partially offset by the
lower revenue and absence of receipt of a forfeiture deposit
arising from an abortive deal in Vietnam.
