CapitaLand says H1 2020 profit 'will be materially and adversely impacted'

CapitaLand Limited shares opened flat on Monday, after the group updated that its first half 2020 net profit will be ‘materially and adversely impacted’.

Singapore real estate group CapitaLand Limited's share price remained flat to begin the week, after the group said on Monday 06 July 2020 that its net profit for the first half of 2020 ‘will be materially and adversely impacted’.

CapitaLand’s operating profit to drop between 25% and 35% in H1 2020

In its latest profit guidance for the six months ended 30 June 2020 posted by Company Secretary Michelle Koh, CapitaLand advised that:

a. operating PATMI (profit after tax and minority interests) is expected to reduce by 25% to 35% from the S$361.3 million recorded in the first half of 2019 (H1 2019)

b. cash PATMI (comprising Operating PATMI and Portfolio Gains) is expected to reduce by 40% to 50% from the S$496.0 million achieved in H1 2019

c. CapitaLand has adopted annual valuation in December with effect from 2020. Any revaluation gains or losses on investment properties will only be recorded in its full year results and accordingly, will not be comparable in H1 2020 to that for H1 2019, which recorded revaluation gains of S$379.4 million. Nevertheless, CapitaLand will continue to recognise its share of any revaluation gains or losses recorded and announced by its listed investments.

Are you looking to trade stocks of CapitaLand Ltd and other Singapore companies without having to buy and sell the actual assets? You can explore IG's world-leading CFD trading option by signing up for a live or demo today.

‘Group’s total PATMI to be materially and adversely impacted’

In light of the above, CapitaLand forecasts that ‘the Group’s total PATMI will be materially and adversely impacted’.

The company further noted that it will ‘closely monitor the situation’ and provide further updates as and when there are material developments in accordance with the listing rules of bourse operator Singapore Exchange (SGX).

Next, CapitaLand says it expects to release its H1 2020 financial results in early August 2020.

Finally, the group stated that ‘shareholders and potential investors are advised to exercise caution when dealing or trading in the securities of the company’.

Read more: Top SGX stocks of the week - CapitaLand, DBS and CapitaMall Trust

What’s the latest on CapitaLand shares?

As at 11:45 SGT on Monday 06 July, CapitaLand’s shares are trading at S$3.04 per share, based on live IG data.

IG’s market analysis (extrapolated at the same time) also show that ‘sells’ formed 100% of all trades on the CapitaLand counter in the last 24 hours.

Meanwhile, 97% of IG client accounts with open positions in this market expect the price to rise, with the remaining 3% of IG client expecting the price to fall.

On a forward-looking price basis, CapitaLand stocks received an average 12-month share price target of S$3.68 based on four analyst reports dating back two months.

On a ratings basis, the stock has an average 'buy' recommendation from 13 brokers - with six giving it a 'strong buy', five on 'buy', and two on 'hold'.

How to trade Singapore stocks with IG

Are you feeling bullish or bearish on CapitaLand and other Straits Times Index (STI Index) stocks? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  • Create a live or demo IG Trading Account or log in to your existing account
  • Enter <CapitaLand Ltd> in the search bar and select the instrument
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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