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CapitaLand becomes latest company in Singapore to freeze wages

Plaza Singapura is managed by CapitaLand and owned by CapitaLandMall Trust. (PHOTO: CapitaLand)
Plaza Singapura is managed by CapitaLand and owned by CapitaLandMall Trust. (PHOTO: CapitaLand)

By Faris Mokhtar

(Bloomberg) -- CapitaLand Ltd. became the latest company in Singapore to implement a pay freeze, saying board members and senior management will take a reduction in their fees and base salaries ranging from 5% to 15% in light of the spreading coronavirus.

Singapore’s largest property developer will also freeze wages for all staff at managerial level and above. The measures, effective April 1, will be reviewed after six months or when the Covid-19 outbreak has stabilised.

“The sudden outbreak of Covid-19 has definitely affected our businesses and those of our partners and tenants, especially in China and Singapore,” Group Chief Executive Officer Lee Chee Koon said Wednesday in a statement outlining the firm’s 2019 financial results. “The extent of the impact will depend on how long the outbreak lasts.”

Singapore has 91 confirmed coronavirus cases, and virus recoveries -- currently at 58 -- are outpacing new cases. A medical research team on the island has managed to establish links between cases in the city-state using a new testing method.

CapitaLand’s announcement follows similar moves Tuesday by Temasek Holdings Pte, the city-state’s investment firm, and national carrier Singapore Airlines Ltd. Temasek, which has a majority stake in both companies, said its move was “an important demonstration of our ownership mindset, sharing gains and pains alongside our shareholder, and supporting our wider communities.”

Prudent Approach

The developer’s full-year operating profit from business operations excluding gains or losses from divestments, revaluations and impairments was S$1.06 billion ($757 million) for the period, a record high.

CapitaLand kept its final ordinary dividend for 2019 at S$0.12 per share, unchanged from 2018. This “prudent approach” will enable the group to remain resilient during this period of uncertainty, it said.

Chief Financial Officer Andrew Lim said in an interview with Bloomberg Television that while the company is diversified and resilient, “retail and hospitality are two of our core sectors and they’re among the hardest hit in the first wave of virus.”

“So I think you will see an impact in our trading and operating results, particularly in the first quarter,” he said.

Properties in Wuhan, the epicenter of the virus, represent less than 2% of CapitaLand’s overall China business, Lim said.

“When you move to the Tier-1 cities then our properties remain open, albeit some of them are on shorter operating hours,” he said.

© 2020 Bloomberg L.P.