Rocketing tax rate drags City Dev's earnings

Thankfully, sales boosted it by a meager 2%.

According to DBS, City Dev reported 3Q net profit that grew 2% y-o-y to S$134.5m on a 3% rise in revenue to S$832.9m due to a higher effective tax rate of 19.5%( vs 13.5% in the previous year from overprovisions in prior year).

Here's more from DBS:

The slack was partly helped by higher profit from sale of strata units at Citimac Industrial Complex, Elite Industrial building II, GB Building and Pantech Business Hub as well as Burlington Square.

Residential engine driving growth. Operations-wise, residential profits remained the largest contributor with billings from Buckley Classique, 368 Thomson, Cube 8, volari, Hundred Trees and H2O Residences as well as The Glyndebourne, NV Residences and Hedges Park.

Hotel profits were boosted by a 4.9% growth in Revpar, led by London as a result of the Olympic and Paralympic Games.

Residential activities driven by sales and landbank replenishment. Going into 4Q and FY13, the group’s performance will continued to be supported by residential activities. Ongoing projects such as Haus@ Serangoon (89% sold), UP@Robertson Quay (69% sold) Bartley Residences (92% sold) are selling well and will be progressively recognised over the next 2-3 years.

Meanwhile, the group has continued to replenish its landbank with the purchase of the GLS sites at Tai Thong Crescent and Sengkang EC. Plans to launch the 508-unit Echelon along Alexandra Rd in Q4 and a 912-unit development in Pasir Ris in 1Q13 are on track. This will continue to extend the group’s earnings visibility.

Varying performance in hotel ops. Meanwhile, within its hotel operations, Revpar continue to inch up in Oct, led by better performance in London as well as Europe. In Singapore, Oct Revpar showed a marginal 0.9% decrease on more cautious corporate spending while rest of Asia operations were slightly affected by AEI works in Taipei.