Financial Review

PROPERTY DEVELOPMENT

Revenue decreased by $297.0 million to $1,150.0 million (FY 2009: $1,447.0 million) for FY 2010 whilst pre-tax profit decreased by $158.8 million to $385.9 million (FY 2009: $544.7 million) for FY 2010.

The decrease in revenue for FY 2010 was due to completion of several projects like City Square Residences, Botannia, Tribeca, The Arte and The Solitaire. This was partially mitigated by increased contributions from Cliveden At Grange, Livia, Shelford Suites as well as commencement of contribution from Volari and Residences at W Singapore Sentosa Cove in 2010. In accordance to the Group’s policy of equity accounting for the results of its jointly-controlled entities, whilst revenue from The Gale, The Oceanfront @ Sentosa Cove and St Regis Residences, had not been consolidated into the Group’s total revenue, the Group’s share of profits arising from these joint venture developments had been included in pre-tax profit.

The decrease in pre-tax profit for FY 2010 was in tandem with the decrease in revenue. In addition, the completion of The Oceanfront @ Sentosa Cove in Q1 2010 had also attributed to the decline.

HOTEL OPERATIONS

Revenue increased by $85.4 million to $1,577.4 million (FY 2009: $1,492.0 million) for FY 2010, backed by strong recovery from the hospitality market, improving the Group’s RevPAR across all regions particularly in Singapore.

In tandem with the improvement of revenue, pre-tax profit for FY 2010 increased by $71.6 million to $204.7 million (FY 2009: $133.1 million). This was partially mitigated by higher impairment losses of $30.8 million (FY 2009: $2.1 million) made in relation to 6 hotels each in United Kingdom and United States of Amercia.

RENTAL PROPERTIES

Revenue increased by $51.7 million to $332.5 million (FY 2009: $280.8 million) for FY 2010 due to higher contributions from Tampines Grande and City Square Mall following their commencement of operations in Q2 2009 and Q3 2009 respectively.

Pre-tax profit surged by $299.5 million to $422.5 million (FY 2009: $123.0 million) for FY 2010. Other than the higher rental income earned from the two aforesaid investment properties, the significant increase was due to gains recognised from sale of all strata units in Chinatown Point, Pantech 21, several strata units in GB Building and New Tech Park held by a jointly-controlled entity in Q4 2010. Included in pre-tax profit for FY 2010 were also gains recognised on sale of North Bridge Commercial Complex and The Office Chamber in 1H 2010 as well as a gain on dilution of investment in CDL Hospitality Trusts (CDLHT) following a CDLHT private placement issue in Q3 2010. This was however partially offset by the higher impairment losses of $23.9 million (FY 2009: $8.3 million) made in Q4 2010 on properties in Japan and United States of America.

OTHERS

Revenue, comprising mainly income from building maintenance contracts, project management fee, hospitality related services, club operations and dividend income, increased by $15.7 million to $68.7 million (FY 2009: $53.0 million) for FY 2010 on account of higher dividend income received as well as increased income earned from project management and building maintenance contracts. In spite of the improvement in revenue for FY 2010, pre-tax profit decreased by $11.6 million to $19.2 million (FY 2009: $30.8 million) due to lower fair value gains recognised on financial assets, higher professional fees incurred and share of loss in First Sponsor Capital Limited this year vis-à-vis share of profit in 2009.