FINANCIAL REVIEW The Group reported a record revenue of $4.9 billion (FY 2022: $3.3 billion) for FY 2023, primarily driven by the stellar performance of its property development segment. The Group achieved a lower net profit after tax and noncontrolling interest (PATMI) of $317.3 million (FY 2022: $1.3 billion), largely due to higher financing costs in FY 2023 and the absence of substantial divestment gains recorded in the prior year arising from the sale of Millennium Hilton Seoul, the deconsolidation of CDL Hospitality Trusts (CDLHT) as well as the completion of the collective sales of Tanglin Shopping Centre and Golden Mile Complex. The record revenue is underpinned by the property development segment which increased its revenue by twofold, largely due to its fully sold Executive Condominium (EC) project Piermont Grand which obtained its Temporary Occupation Permit (TOP) in 1H 2023, enabling its revenue and profit to be recognised in entirety upon completion under prevailing accounting policies for ECs. The Group also divested its freehold land site in Shirokane, Tokyo, in Q3 2023 for JPY 50 billion ($495.0 million). The Group recorded a pre-tax profit of $472.6 million for FY 2023 (FY 2022: $1.9 billion). The significant decrease for the year was due to the absence of substantial divestment gains as described above. The property development segment was the lead contributor following the recognition of the profits from Piermont Grand and the sale of the Shirokane land site, as well as other strong-performing Singapore projects such as Amber Park, Boulevard 88 and Irwell Hill Residences. Propelled by the rebound in the hospitality sector, the Group’s hotel operations segment continued to register performance improvements in FY 2023, with a reversal of $54.0 million in impairment losses of its hotels (FY 2022: $31.8 million). PROPERTY DEVELOPMENT Revenue increased by $1,410.3 million to $2,792.6 million (FY 2022: $1,382.3 million) for FY 2023. Correspondingly, pre-tax profit for the segment more than doubled by $178.2 million to $339.5 million (FY 2022: $161.3 million) for the year. Projects that contributed to both revenue and profit in FY 2023 included the land site at Shirokane, Piermont Grand, Amber Park, Irwell Hill Residences, Haus on Handy, Hong Leong Technology Park Shenzhen, Hongqiao Royal Lake in Shanghai, Teddington Studio in the UK as well as New Zealand land sales. In accordance with the Group’s policy of equity accounting for the results of its joint ventures (JV), whilst revenue from JV developments such as Boulevard 88, CanningHill Piers, Piccadilly Grand and Sengkang Grand Residences had not been consolidated into the Group’s total revenue, the Group’s share of profit arising from JV developments had been included in the pre-tax profit. The increase in revenue for FY 2023 was attributable to full revenue recognition from Piermont Grand, which obtained TOP in 1H 2023 and the sale of land site at Shirokane. The increase in pre-tax profit for FY 2023 was in-line with the higher revenue achieved, along with negative goodwill of $38.8 million recognised on acquisition of Summervale Properties Pte Ltd. The increase was partially offset by allowance for foreseeable losses made on a development property in China. HOTEL OPERATIONS Revenue for this segment increased by $117.8 million to $1,498.5 million (FY 2022: $1,380.7 million) while pre-tax profit decreased by $1,194.6 million to $188.6 million (FY 2022: $1,383.2 million) for FY 2023. The increase in revenue was attributable to the continued recovery of the hospitality industry, which was backed by the improved occupancy and room rates achieved by the Group’s hotel portfolio. The Group’s hotel RevPAR grew 25.3% for FY 2023. The significant decline in pre-tax profit was due to substantial divestment gains recognised in 1H 2022 including gains recognised from the disposal of Millennium Hilton Seoul and the deconsolidation of CDLHT, partially offset by higher reversal of impairment losses made on the hotel properties, mainly located in the US, of $54.0 million (FY 2022: $31.8 million) and a gain of $80.0 million accounted in 2H 2023 from the disposal of Millennium Harvest House Boulder. Excluding the divestment gains and impairment losses reversed, on a like-for-like-basis, the Group would have registered pre-tax profits for this segment in FY 2023 of $54.6 million (FY 2022: $32.0 million). INVESTMENT PROPERTIES For FY 2023, although revenue for this segment increased by $108.3 million to $449.5 million (FY 2022: $341.2 million), a pre-tax loss of $40.8 million (FY 2022: pre-tax profit of $383.6 million) was recorded. The increase in revenue was mainly due to the addition of several newly acquired investment properties to the Group’s portfolio, including St Katharine Docks in the UK, and various living sector assets in our key overseas target markets. Despite higher revenue achieved, the Group reported pre-tax losses mainly due to impairment losses made on two investment properties in the UK in 1H 2023 and an investment property in China in 2H 2023, as well as increased interest expenses amidst the high-interest rate environment. The losses were partially mitigated by divestment gains recognised primarily from disposal of a Please refer to CDL Integrated Sustainability Report 2024 and www.cdlsustainability.com for the complete set of information. CDL SDG VALUE-ADD CIRCLE CDL SDG Value-Add Circle Embracing the SDGs for a healthy triple bottom line and circularity Supply Chain Strategy Customer Experience EHS and Well-being Human Capital Community Investment Charity Initiatives Leadership Commitment Biodiversity Innovation Awards & Accolades Best ESG Practices Corporate Policies & Guidelines Corporate Governance Risk Management Sustainable Value Creation Thought Leadership Sustainable Finance Future Value 2030 Waste Management Water Energy Carbon Environmental Impact Climate Change Study DIGITALISATION DISCLOSURE DECARBONISATION PEOPLE PERFORMANCE & PROFIT PLANET PURPOSE BUSINESS OVERVIEW ANNUAL REPORT 2023 93 92 SUSTAINABILITY CITY DEVELOPMENTS LIMITED
RkJQdWJsaXNoZXIy ODIwNTc=