BUSINESS OVERVIEW 79 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 78 Winning The Race to Zero and Adding Purpose to the Triple Bottom Line Having adopted the triple bottom line approach for two decades, CDL remains committed to continuously pushing the envelope with climate-focused strategies and adding greater purpose to the value creation model. The Company recognises the urgency of climate change and its threat to the survival of humanity and is fully aware of its crucial role in contributing to the global race to zero. Please refer to CDL Integrated Sustainability Report 2022 and www.cdlsustainability.com for the complete set of information. As Singapore’s real estate pioneer and green building leader, CDL takes pride in its tenacity in aligning its business with global and national goals to mitigate the negative impact of climate change. With CDL’s Future Value 2030 Sustainability Blueprint as the bedrock of its ambitious ESG goals and strategies, CDL is well placed to accelerate its net zero goals for a low-carbon built environment. PLANET PEOPLE PROFIT Integrating UN SDGs has added purpose for a more balanced triple bottom line for CDL SUSTAINABILITY BOARD STATEMENT FINANCIAL REVIEW The Group reported a return to profitability with a net attributable profit after tax and non-controlling interest (PATMI) of $97.7 million for FY 2021 (FY 2020: net loss after tax and non-controlling interest of $1.9 bi l l ion). Revenue for FY 2021 increased by 24.5% to $2.6 billion (FY 2020: $2.1 billion). For FY 2021, the property development segment contributed 48% to total revenue, propelled by strong performing Singapore projects such as Whistler Grand, Amber Park, The Tapestry and Irwell Hill Residences, as well as overseas projects, including Shenzhen Longgang Tusincere Tech Park, and contribution from New Zealand land sales. The Group recorded a pre-tax profit of $227.7 million for FY 2021 (excluding the losses from Sincere Property Group (Sincere Property) in 2020, FY 2020: pre-tax loss of $14 million). For FY 2021, the property development segment continued to be the main contributor to the Group’s pre-tax profit. PROPERTY DEVELOPMENT Revenue increased by $288.5 million to $1,254.4million (FY 2020: $965.9million) for FY 2021. This segment reported a pre-tax gain of $244.7 million (FY 2020: pre-tax loss of $739.8million) for FY 2021. Projects that contributed to both revenue and profit in FY 2021 include Whistler Grand, Amber Park, The Tapestry, Irwell Hill Residences, Haus on Handy, Shenzhen Longgang Tusincere Tech Park and Hongq i ao Roya l Lake , Shanghai, as well as New Zealand land sales. In accordance with the Group’s policy of equity accounting for the results of its joint ventures, whilst revenue from joint venture developments such as South Beach Residences, Boulevard 88, The Jove l l and Sengkang Grand Residences had not been consolidated into the Group’s total revenue, the Group’s share of profit arising from these joint venture developments had been included in pre-tax profit. The increase in revenue for FY 2021 was attributable to revenue contribution from Shenzhen Longgang, which the Group acquired in February 2021, and higher progressive contribution from Amber Park, due to higher percentage of completion achieved and units sold. The substantial pre-tax loss recognised for FY 2020was due to losses attributable to the Group’s investment in Sincere Property. Excluding the impact of Sincere Property, this segment would have reported a pre-tax gain of $219.8 million for FY 2020. Pre-tax profit for FY2021werealsoboostedby contribution from Shenzhen Longgang, along with the negative goodwill recognised by the Group on its acquisition. HOTEL OPERATIONS Revenue for this segment increased by $232.7million to $873.1million (FY 2020: $640.4million) for FY 2021. This segment reported a lower pre-tax loss of $71.0 million (FY 2020: $573.4 million) for FY 2021. Excluding the impact of Sincere Property, this segment would have reported a pre-tax loss of $466.8million for FY 2020. The increase in revenue and lower pre-tax loss is attributable to the recovery of the hospitality sector, backed by improved occupancy and room rates achieved by the Group’s hotel portfolio, as governments gradually ease COVID-19 restrictions. Other than the improved hotel performance, the reversal of impairment losses made by the Group of $96.4million (FY 2020: impairment loss of $87.0 million) on its hotel properties during the year also contributed to the lower pre-tax loss this year. INVESTMENT PROPERTIES Revenue for this segment decreased by $20.3 million to $341.1 million (FY 2020: $361.4million) for FY 2021. This segment reported a pre-tax gain of $24.3 million (FY 2020: pre-tax loss of $575.0 million) for FY 2021. The decrease in revenue for FY 2021 was largely due to lower contribution from Jungceylon mall, Patong, Phuket, which was closed for a large part of the year, Fuji Xerox Towers which had been vacated for redevelopment and Novotel Brisbanewhichwas divested by the Group in October 2020. The substantial pre-tax loss recognised for FY 2020was due to losses attributable to the Group’s investment in Sincere Property. Excluding the impact of Sincere Property, this segment would have reported a pre-tax gain of $135.8 million for FY 2020. Excluding the loss attributable to Sincere Property, pre-tax profit for this segment for FY 2021 declined mainly due to lower divestment gains recognised. In 2021, the Group recognised a divestment gain of $5.7 million on divestment of Mille Malle. In 2020, the Group recognised a gain of $107.9 million on the sale of Novotel Clarke Quay (held through CDLHT Group) to a joint venture consortium and a gain of $9.4 million on the divestment of Novotel Brisbane. OTHERS Revenue, comprising mainly income from building maintenance contracts, project management, club operations, laundry services and dividend income, increased by $16.5 mi l l ion to $157.1 mi l l ion (FY 2020: $140.6million) for FY 2021. The increase for FY 2021 was due to higher project management fees earned. Pre-tax profit decreased by $67.7 million to $29.7 million (FY 2020: $97.4 million) for FY 2021. Despite the increase in revenue, pretax profit for FY 2021 decreased mainly due to the absence of a $23.5 million divestment gain on Sceptre Hospitality Resources which was recognised by the Group in FY 2020 and higher fair value loss recognised on the remeasurement of certain quoted securities held by the Group.
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