FULL YEAR FINANCIAL REPORT 1 Jan 31 Dec 2013 27 February 2014 ANALYST / MEDIA BRIEFING
Artist s Impression of Lush Acres
FINANCIAL HIGHLIGHTS Artist s Impression of D Nest
KEY FINANCIAL HIGHLIGHTS Delivered a resilient and consistent performance with PATMI of $683.0m for FY2013 (FY2012: $678.3m) despite a challenging Singapore market. No revaluation surpluses on investment properties and hotels (including CDL Hospitality Trusts). Locked-in profits from substantially sold projects that are recognised based on stages of construction. Profits from three of its fully sold Executive Condominiums (ECs) have yet to be recognised in line with prevailing accounting treatment, which only allows profit recognition in entirety upon completion of construction. Robust basic earnings per share of 73.7 cents (FY2012: 73.2 cents). Strong balance sheet with cash and cash equivalents of $2.87 billion as at 31 December 2013 and healthy gearing ratio at 20.0% (excluding any revaluation surpluses for investment properties) and interest cover at 15.2 times for FY 2013. Total dividends of 16.0 cents per share, including the proposed final ordinary dividend of 8.0 cents per share.
SUMMARY OF FINANCIAL HIGHLIGHTS Q4 2013 Q4 2012 % Change FY 2013 FY 2012 % Change Revenue ($m) 774 886 (12.6) 3,162 3,354 (5.7) Profit Before Tax ($m) * 256 325 (21.4) 892 960 (7.1) PATMI ($m) * 221 249 (11.4) 683 678 0.7 Basic Earnings Per Share (cents) 23.6 26.7 (11.6) 73.7 73.2 0.7 NAV Per Share ($) 8.63 8.03 7.6 * No fair value adopted on investment properties. Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses.
FINANCIAL HIGHLIGHTS Revenue for the Quarter Ended 31 Dec (2004 2013) $ million 1,000 900 800 700 600 500 400 300 200 100 0 922 886 766 774 738 718 722 687 672 603 2004 2005 2006 2007 2008 2009 2010 * 2011 2012 2013 4 th Quarter * Restated due to the adoption of INT FRS 115 for 2010 only. Note: The above financial information is extracted from yearly announcements.
FINANCIAL HIGHLIGHTS PATMI for the Quarter Ended 31 Dec (2004 2013) 300 250 235 241 249 221 $ million 200 150 100 97 101 137 100 177 163 50 0 2004 ^ 2005 2006 2007 2008 2009 2010 * 2011 2012 2013 ^ Restated Restated due to the adoption of INT FRS 115 for 2010 only. Note: 4 th Quarter The above financial information is extracted from yearly announcements. The Group adopted FRS 40 cost model whereby its investment properties continue to be stated at cost less accumulated depreciation and accumulated impairment losses with effect from 1 Jan 2007.
FINANCIAL HIGHLIGHTS Revenue for the Year Ended 31 Dec (2004 2013) 4,000 3,500 3,000 2,500 2,380 2,374 2,547 3,106 2,945 3,273 3,103 3,280 3,354 3,162 $ million 2,000 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 * 2011 2012 2013 * Restated due to the adoption of INT FRS 115 for 2010 only. Year Note : The above financial information is extracted from yearly announcements.
FINANCIAL HIGHLIGHTS PATMI for the Year Ended 31 Dec (2004 2013) $ million 900 800 700 600 500 400 300 200 100 0 ^ 227 2004 ^ 2005 2006 2007 2008 2009 2010 * 2011 2012 2013 Restated * Restated due to the adoption of INT FRS 115 for 2010 only. Note: 200 352 725 581 593 Year The above financial information is extracted from yearly announcements. 784 799 678 683 The Group adopted FRS 40 cost model whereby its investment properties continue to be stated at cost less accumulated depreciation and accumulated impairment losses with effect from 1 Jan 2007.
FINANCIAL HIGHLIGHTS Revenue by Segment FY 2013 vs FY 2012 & FY 2011 $ million 1,800 1,600 1,400 1,200 1,000 800 600 400 200 1,415 1,344 1,198 1,563 1,536 1,543 281 304 314 92 99 FY 2011 FY 2012 FY 2013 107 0 Property Development Hotel Operations Rental Properties Others FY 2013 FY 2012 FY 2011 Property Development 38% 42% 41% Hotel Operations 49% 46% 48% Rental Properties 10% 9% 9% Others 3% 3% 2%
FINANCIAL HIGHLIGHTS Profit Before Tax by Segment FY 2013 vs FY 2012 & FY 2011 $ million 600 550 500 450 400 350 300 250 200 150 100 50 0 (50) 536 468 413 Property Development 282 250 160 325 178 299 Hotel Operations Rental Properties Others (7) 64 FY 2011 FY 2012 FY 2013 20 FY 2013 FY 2012 FY 2011 Property Development 46% 49% 47% Hotel Operations 18% 26% 25% Rental Properties 34% 18% 29% Others 2% 7% (1%)
FINANCIAL HIGHLIGHTS Revenue by Geographical Region FY 2013 vs FY 2012 FY 2013 FY 2012 14% 446 355 17% 525 1,836 58% Singapore Europe USA Others 13% 440 355 16% 532 2,027 60% 11% 11% Profit Before Tax (Singapore vs Overseas) FY 2013 vs FY 2012 Profit Before Tax FY 2013 FY 2012 Singapore 77% 73% Overseas 23% 27%
FINANCIAL HIGHLIGHTS Capital Management As at 31/12/13 As at 31/12/12 Incr / (Decr) Cash and cash equivalents $2,871m $2,162m * 33% Net Borrowings $1,968m $2,357m (17%) Net gearing ratio without taking in fair value gains on investment properties Net gearing ratio after taking in fair value gains on investment properties 20% 25% 14% 18% Interest Cover Ratio 15.2 x 17.4 x * Including cash and cash equivalents classified as asset held for sale.
FINANCIAL HIGHLIGHTS CDL s Net Gearing (%) (2008 2013) 70 Net Gearing (%) 50 30 10 48 40 29 25 21 20 14 2008 2009 2010 * 2011 2012 2013 Maturity Period FY 2013 Within 1 year 12% 1 to 2 years 25% 2 to 3 years 31% More than 3 years 32% * Restated due to the adoption of INT FRS 115 for 2010 only. After taking in fair value gains on investment properties
ADOPTION OF FRS 110 IN 2014 FRS 110: Introduces a new control model focusing on power over the investee, exposure, or rights to variable returns from its involvement with the investee and ability to use its power to affect those returns. Implication In accordance to FRS 110, the Group has de facto control over CDLHT which was previously accounted for as an associate using the equity method. When the Group adopts FRS 110 in 2014, it would consolidate CDLHT. Financial Impact to the Group Reported 2013 Restated 2013 Revenue ($m) 3,162 3,213 PATMI ($m) 683 686 Net assets ($m) 9,828 10,216 Basic earnings per share (cents) 73.7 74.0 Net borrowing ($m) 1,968 2,589
SINGAPORE PROPERTY MARKET Artist s Impression of The Inflora
SINGAPORE PROPERTY MARKET Property Price Index Residential (2009 2013) 220 200 180 160 140 120 100 All Residential Q3 13 216.3 Q4 13 214.3 80 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Source : URA, Q4 2013
SINGAPORE PROPERTY MARKET No. of New Private Residential Units Launched vs Units Sold (Projects under Construction) (2009 2013) New Units Launched New Units Sold (Projects Under Construction) 24,000 22,000 20,000 New Units New Units 18,000 16,000 15,885 14,948 Launched (excl. EC units) Sold Directly By Developers (excl. EC units) 14,000 12,000 10,000 8,000 6,000 4,000 2009 14,103 14,688 2010 16,575 16,292 2011 17,710 15,904 2012 21,478 22,197 2013 15,885 14,948 2,000 0 2009 2010 2011 2012 2013 Source : URA, Q4 2013
SINGAPORE PROPERTY MARKET No. of Uncompleted Private Residential Units Available (2009 2013) Not Launched Launched & Unsold 20,000 17,084 17,467 16,000 13,937 13,928 13,944 Launched & Unsold Not Launched Total Number of Units 12,000 8,000 4,000 2009 3,317 10,620 13,937 2010 3,528 10,400 13,928 2011 5,584 11,500 17,084 2012 5,137 8,807 13,944 2013 6,124 11,343 17,467 0 2009 2010 2011 2012 2013 Source : URA, Q4 2013
SINGAPORE PROPERTY MARKET Property Price Index Commercial (2009 2013) 140 Q3 13 132.1 Q4 13 132.8 120 100 Q3 13 128.5 Q4 13 128.5 80 60 40 Office Shop 20 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Source : URA, Q4 2013
SINGAPORE PROPERTY MARKET Average Office Rental in CBD (2009 2013) 12.00 10.00 8.00 $8.08 $10.21 $7.70 $11.14 $8.44 $9.74 $7.90 $10.51 $8.37 6.00 4.00 $5.97 Marina Bay/ Raffles Place (Grade A) Whole Island 2.00 0.00 2009 2010 2011 2012 2013 Source : JLL Research, Q4 2013
OPERATIONS REVIEW Jewel @ Buangkok For Illustration Only
PROPERTY DEVELOPMENT Artist Impression of The Venue Residences
PROPERTY DEVELOPMENT Units Booked / Sold Sales Value* $ 000 No. of Units* Total Floor Area* (sq ft) FY 2013 $ 3,319,298 3,210 3,055,305 FY 2012 $ 2,781,094 2,395 2,513,223 * Includes share of JV partners & ECs
OPERATIONS REVIEW Planned Residential Project Launches for 1H 2014 (subject to market conditions) Projects Pasir Ris Parcel 3 (Near Pasir Ris MRT station) Commonwealth Avenue (Next to Queenstown MRT station) 944 units 845 units To be launched in phases
OPERATIONS REVIEW Land Bank by Sector (as at 31 Dec 2013) CDL s Attributable Share Land Area (Sq ft) Type of Development Local Overseas Total % (Local & Overseas) Residential 946,747 942,698 1,889,445 79.5% Commercial / Hotel 193,971 294,619 488,590 20.5% Total 1,140,718 1,237,317 2,378,035 100% Residential (Local) 39.8% Residential (Overseas) 39.6% Proposed GFA (a) Singapore 2.74 million sq ft (b) CDL China 4.80 million sq ft Commercial/ Hotel (Overseas) 12.4% Commercial/ Hotel (Local) 8.2% (c) Overseas Total 0.37 million sq ft 7.91 million sq ft
OPERATIONS REVIEW Rental Properties Revenue by Sector 400 350 $304m $314m Rental Revenue ($m) 300 250 200 150 100 50 0 174 173 93 103 13 12 24 26 2012 2013 Office Retail Industrial Others * * Including car park, serviced apartment and residential
HOTEL OPERATIONS & CDLHT ONE UN New York
HOTEL OPERATIONS M&C Group Good Trading Performance Improvement in RevPAR (in reported currency) driven by significantly improved room rates in the USA as well as increased occupancy in all regions except Singapore and some Asian destinations: RevPAR FY 2013 69.58 3.4% Q4 2013 70.07 1.8% RevPAR growth for 2013 driven by: - London 2.2% - New York 6.9% - Regional US 8.3% Millennium Seoul Hilton Strong Balance Sheet Cashflow from operating activities continue to remain strong that enabled M&C Group with zero net gearing. Interest cover ratio (excluding share of results of joint-ventures and associates, other operating income and expense and non-operating income) improved to 49.0 times for 31 Dec 2013 (31 Dec 2012: 22.9 times).
HOTEL OPERATIONS M&C Group Hotel Room Count and Pipeline Hotels Rooms 31 Dec 31 Dec 31 Dec 31 Dec Hotel and Room Count 2013 2012 2013 2012 By region: New York 3 3 1,758 1,758 Regional US 16 16 4,938 5,554 London 7 7 2,493 2,493 Rest of Europe 16 16 2,695 2,695 Middle East * 16 14 4,816 4,211 Singapore 6 6 2,716 2,716 Rest of Asia 21 17 7,894 6,861 Australasia 29 31 4,423 4,651 Total: 114 110 31,733 30,939 Grand Millennium Kuala Lumpur Pipeline By region: New York 1-480 - London 1-158 - Middle East * 17 18 4,796 4,772 Rest of Asia 5 3 1,936 668 Total: 24 21 7,370 5,440 Millennium Bostonian Hotel * Mainly management contracts
HOTEL OPERATIONS M&C Group New Acquisitions London Chelsea Harbour Entered into conditional agreement to acquire a leasehold interest in a luxury, all suite hotel located within the Chelsea Harbour district. The property currently offers 154 suites and 4 penthouses and is situated in a prestigious riverside area. Purchase price is 65.0m, subject to standard price adjustments. Completion is expected to occur in Q1 2014.
HOTEL OPERATIONS M&C Group New Acquisitions USA Novotel New York Times Square Entered into a conditional agreement to acquire the 480- room 4-star Novotel New York Times Square. The 34- storey building is located in the heart of the Manhattan theatre district. Purchase price is 167.0m, subject to standard price adjustments. Completion is expected to occur in Q2 2014.
HOTEL OPERATIONS M&C Group New Acquisitions Europe Boscolo Palace Roma Entered into a conditional agreement to acquire the 5-star hotel located in Rome, Italy. Situated on Via Veneto, the hotel offers 87 luxury guest rooms and suites in the heart of one of Europe s greatest leisure and business travel destinations. Purchase price is 65.5m, subject to standard price adjustments. Completion is expected to occur in Q2 2014.
HOTEL OPERATIONS M&C Group Asset Enhancement (on-going) Out of the 240m refurbishment programme, 87.8m had been spent up to 31 December 2013 since the commencement in 2011. 41.6m was spent under the programme in 2013. Most of this was accounted for by works undertaken at Millennium Minneapolis and Grand Hyatt Taipei. Millennium Minneapolis Refurbishment of the west wing of the Grand Hyatt Taipei was completed during Q3 2013, with work currently underway on renovation of the east wing which was closed when the west wing re-opened. The hotel is scheduled to re-open fully in Q3 2014. Grand Hyatt Taipei
HOTEL OPERATIONS M&C Group Asset Enhancement (Grand Hyatt Taipei)
HOTEL OPERATIONS Hotel Revenue by Region FY 2013 FY 2012 23% 355 5% 80 677 44% Asia United States Europe 23% 355 5% 77 678 44% 431 New Zealand 426 28% 28% $1,543m $1,536m
HOTEL OPERATIONS Hotel Occupancy by Region 80.0 77.2 76.5 76.0 77.8 Hotel Occupancy Rate (%) 70.0 60.0 63.5 65.9 63.6 67.7 FY 2012 FY 2013 50.0 Asia United States Europe New Zealand
HOTEL OPERATIONS Hotel Revenue Per Available Room at Constant Currency 170 154 154 151 152 Hotel RevPAR ($) 140 110 80 123 135 70 76 FY 2012 * FY 2013 50 Asia United States Europe New Zealand * For comparability, FY 2012 RevPAR had been translated at constant exchange rates (31 Dec 2013).
CDL HOSPITALITY TRUSTS (CDLHT) S$ 000 FY 2013 FY 2012 Change Gross Revenue 148,782 149,535 (0.5%) Net Property Income 137,389 139,293 (1.4%) Jumeirah Dhevanafushi Gross revenue decreases mainly due to lower gross revenue from the Singapore hotels and lower contribution from Orchard Hotel Shopping Arcade, which was closed for Asset Enhancement Initiatives in December 2013, partially mitigated by revenue generated by Angsana Velavaru, acquired on 31 January 2013. Singapore hotels performance was affected by: Increased competition due to additional new supply of hotel rooms. Weaker corporate demand as many companies globally exercised restraint. Reduced corporate business was replaced with leisure business that was secured at lower rates. Completed acquisition of Jumeirah Dhevanafushi on 31 December 2013 for US$61m, expected to augment income stream of CDLHT.
MOVING FORWARD Artist s Impression of South Beach
MOVING FORWARD Solid balance sheet Strong position to accelerate diversification plans and weather some headwinds expected this year Build synergistic platforms to capitalise on overseas growth markets and for risk diversification - Actively seek opportunities in mature markets such as US, Japan and Australia - Poised to reap benefits from China and London platforms; and continue to pursue these markets - Strategic acquisition opportunities during current down cycle Value enhancement Extract greater value from global hospitality arm Enhance organisational efficiency and effectiveness
MOVING FORWARD Property Development Healthy locked-in profits from numerous pre-sold projects and three fully-sold ECs are yet to be booked Pipeline projects are strategically located near MRT stations Rental Properties Office properties segment expected to remain stable current occupancy of 96.5% is higher than national average Capital recycling for non-core assets to unlock shareholder value is ongoing selectively Hotel Operations Remains a steady income generator for the Group Asset management programme M&C will continue to strategically refurbish and reposition its key assets to improve ROI as the economy recovers Maximise the value of M&C s real estate portfolio Capture strategic opportunities for growth recent acquisition of three significant properties in key gateway cities: Chelsea Harbour, Novotel New York Times Square and Boscolo Palace Roma
MOVING FORWARD Overseas Growth Platforms China - Critical milestones achieved for projects in Chongqing and Suzhou - Sales commencement for Eling Residences (Chongqing) and Hong Leong City Center (Suzhou) expected in Sep / Oct 2014 - Huang Huayuan (Chongqing) expected to start selling in 2015 - Chengdu projects making good progress UK - Planning application for development of 28 Pavilion Road site in Knightsbridge to be submitted - Actively pursuing further opportunities for development and investment in Greater London area
Disclaimer: This document may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, availability of real estate properties, competition from other developments or companies, shifts in customer demands, customers and partners, expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events.
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