Property Development
Revenue increased by $218.9 million to $1,343.7 million
(Restated FY 2010: $1,124.8 million) for FY 2011. Pre-tax
profits increased by $114.9 million to $536.0 million
(Restated FY 2010: $421.1 million) for FY 2011.
The increase in revenue for FY 2011 was due to maiden contribution from NV Residences, 368 Thomson, Cube 8, Hundred Trees and Tree House in 2011, increased contribution from One Shenton and Volari as well as sale of development land in Q3 2011 at £44.2 million (approximately $88.9 million) in Kuala Lumpur by the Company’s 55% owned subsidiary, Millennium& Copthorne Hotels plc (M&C). However, the absence of contributions from Tribeca and The Arte which obtained their Temporary Occupancy Permits (TOP) in 2010 and reduced contributions from Wilkie Studio, Livia, Shelford Suites and The Residences at W Singapore Sentosa Cove had partially offset the increase in revenue.
The increase in pre-tax profits for FY 2011 was in tandem with the increase in revenue coupled with a net write-back of allowance for foreseeable losses for development projects. This was partially offset by the absence of profit contributions from The Oceanfront @ Sentosa Cove, a joint venture project, which obtained its TOP in 2010.
Hotel Operations
Revenue decreased by $13.9 million to $1,563.5 million (FY
2010: $1,577.4 million) for FY 2011, despite improvement
in the Group’s RevPAR in main gateway cities. This was
due to the closure of the Copthorne Orchid Hotel on
1 April 2011 for redevelopment to residential property
and closure of three hotels in New Zealand due to the
February 2011 earthquake in Christchurch. In addition,
the refurbishment work at the Millennium Seoul Hilton
and Orchard Hotel Singapore in 2011 had also negatively
impacted the full year revenue.
Though revenue for FY 2011 decreased, pre-tax profit increased by $77.5 million to $282.2 million (FY 2010: $204.7 million). This was due to a gain of £17.4 million (approximately $35.4 million) on the sale and leaseback of Studio M Hotel to CDL Hospitality Trusts (CDLHT) recorded in Q2 2011 and a release of £6.6 million (approximately S$13.3 million) dilapidation provision for Millennium Hotel & Resort Stuttgart whose lease expired on August 2011.
Rental Properties
Revenue decreased by $51.7 million to $280.8 million (FY
2010: $332.5 million) for FY 2011 primarily due to the disposal
of North Bridge Commercial Complex, The Office Chamber,
Pantech 21, several strata units in GB Building and all strata
units in Chinatown Point in 2010 as well as sale of The Corporate Office in Q1 2011.
Pre-tax profit decreased by $96.9 million to $325.6 million (FY 2010: $422.5 million) for FY 2011. The decrease in FY 2011 was due to gains recognised in 2010 from the sale of North Bridge Commercial Complex, The Office Chamber, all strata units in Chinatown Point, Pantech 21, several strata units in GB Building and New Tech Park, held by a jointly-controlled entity, partially offset by lower impairment loss of $14.1 million (2010: $23.9 million) made in 2011. Included in pre-tax profits for FY 2011 were gains accounted on the disposal of The Corporate Building, The Corporate Office and a strata unit in GB Building. In addition, a gain was also recorded for the dilution of investment in CDLHT following a CDLHT private placement issue in Q3 2010.
Others
Revenue, comprising mainly income from building
maintenance contracts, project management, club operations and dividend income, increased by $23.8
million to $92.5 million (FY 2010: $68.7 million) primarily
due to higher management fee income earned and
dividend income received for FY 2011.
Though revenue had increased, pre-tax loss of $7.4 million (FY 2010: pre-tax profit of $19.2 million) for FY 2011 was reported. This was mainly due to higher professional fees incurred and exchange losses arising from translation of foreign denominated loans, particularly Hong Kong dollars denominated loans. Fair value losses recognised on financial assets held for trading in FY 2011 vis-à-vis net fair value gains recorded in FY 2010 had also negatively impacted the full year performance for this segment.