City Developments Limited
Notes:
* Includes share of after-tax profit of associates and joint ventures.
** The 2013 comparative figures were restated to take into account the retrospective adjustments arising from the adoption of FRS 110 – Consolidated Financial Statements.

PROPERTY DEVELOPMENT

Revenue increased by $383.1 million to $1,581.2 million (FY 2013: $1,198.1 million) for FY 2014. Pre-tax profit increased by $118.7 million to $531.6 million (FY 2013: $412.9 million) for FY 2014.

The significant increase in revenue for FY 2014 was primarily due to the entire recognition from an executive condominium (EC), Blossom Residences which obtained Temporary Occupation Permit (TOP) in September 2014. Under prevailing accounting standards, both revenue and profit for ECs are recognised in entirety only upon TOP. In addition, maiden contribution from Jewel @ Buangkok and D’Nest, together with higher contribution from H2O Residences and The Palette also attributed to the increase. The increase was however partially offset by absence of contributions from Hundred Trees, Cube 8 and Tree House that were completed in 2013 as well as lower contribution from The Glyndebourne and 368 Thomson.

The increase in pre-tax profit for FY 2014 was in-line with the higher revenue achieved coupled with the recognition of a gain arising from loss of control in Cityview Place Holdings Pte. Ltd. (Cityview) following the completion of the sale of its cash flows. Substantial portion of the gain was accounted under this segment as Cityview owns the apartments at The Residences at W Singapore – Sentosa Cove. This increase was however partially offset by allowances for foreseeable losses made in 2014 for certain Singapore residential projects.

HOTEL OPERATIONS

Revenue for this segment increased by $148.9 million to $1,678.3 million (Restated FY 2013: $1,529.4 million) for FY 2014 whilst pre-tax profits increased by $101.2 million to $332.8 million (Restated FY 2013: $231.6 million) for FY 2014.

The increase in revenue for FY 2014 were primarily due to contributions from three newly acquired hotels, The Chelsea Harbour Hotel, Novotel New York Times Square and Grand Hotel Palace Rome, and higher contribution from recently refurbished hotels, including Grand Hyatt Taipei and Millennium Hotel Minneapolis. RevPAR in all regions, except Singapore, had shown improvement with the United States and Australasia being the strongest performance regions.

The increases in pre-tax profit for FY 2014 was in tandem with the increases in revenue as well as a result of tight cost control and closure of the unprofitable Millennium St Louis in January 2014. In addition, a portion of the gain arising from the loss of control in Cityview was accounted under this segment as it owns W Singapore – Sentosa Cove. Further, there was no impairment loss made on hotel this year as compared to an impairment of $23.7 million provided in 2013 on a hotel in United States.

RENTAL PROPERTIES

Revenue for this segment remained relatively steady at $384.7 million (Restated FY 2013: $378.9 million) for FY 2014.

Pre-tax profit decreased by $137.7 million to $145.9 million (Restated FY 2013: $283.6 million) for FY 2014 primarily attributed to the absence of substantial gains on disposal of non-core investment properties. In 2013, profit was recognised from the sale of an industrial site at 100G Pasir Panjang, disposal of equity interest in a subsidiary, several strata units in Citimac Industrial Complex, Elite Industrial Building I, Elite Industrial Building II and 2 strata floors of GB Building. The decrease was however offset by a portion of gain recognised from loss of control in Cityview being accounted under this segment as it owns Quayside Isle, coupled with no impairment made on investment properties this year. Last year, an impairment of $2.3 million was provided on an investment property located in Japan.

OTHERS

Revenue, comprising mainly income from building maintenance contracts, project management, club operations and dividend income, increased by $12.8 million to $119.8 million (FY 2013: $107.0 million) for FY 2014 due to higher management fee income.

Pre-tax loss of $6.6 million (FY 2013: pre-tax profit of $19.9 million) was reported for FY 2014. The loss for FY 2014 was mainly attributable to impairment loss made on an available-for-sale financial asset. In addition, the Group’s share of loss in its associate, First Sponsor Group Limited in FY 2014 vis-à-vis share of its profit last year had also attributed to the loss.