City Developments Ltd, run by Singapore’s richest property dynasty, saw a loss of S$32.1 million ($23.7 million) in the first half due to tax expenses and the pandemic fallout.
Covid relief plans were no longer available like last year when it benefited from a deferred tax credit of S$17.6 million. CDL’s revenue in the six months rose by 11.1% to S$1.2 billion.
With travel restrictions still largely in place for most countries, its hotel operations segment registered a 10.8% decline in revenue. The firm’s investment properties also generated lower rental income, hurt by decreased footfalls, rental rebates given to retail tenants and significantly lower contribution from its Phuket mall.
“While the road to recovery remains uneven, the accelerated vaccine deployment across the globe and the gradual easing of border restrictions offer light at the end of the tunnel,” said its chief executive officer, Sherman Kwek.
The company is still reeling from a record loss of S$1.9 billion for the last financial year, largely because of impairments from its bungled backing of Chinese developer Chongqing Sincere Yuanchuang Industrial Co. CDL has already written off the investment and said it will no longer inject funds into Sincere, which is trying to stave off a bankruptcy application brought against it by a China-based creditor.
For CDL, it’s trying to move past the fallout and focus on other projects. The company applied for a Singapore initial public offering for a U.K real estate investment trust. It may also review potential divestments and look to tap Singapore’s booming residential market, analysts said.
The investment in Sincere cast a shadow over the business and even sparked a family rift. Several board members including a cousin to the family patriarch and company chairman, Kwek Leng Beng, resigned in disagreement over the deal. And CDL’s scion Sherman Kwek came under intense pressure to salvage the investment that he promoted.
The company has cash reserves of S$2.8 billion as of June 30.