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CapitaLand Investment to announce significant decline in Patmi, cashflow to stay stable

CapitaLand Investment to announce a significant decline in total Patmi due to revaluation losses

On Dec 8, CapitaLand Investment announced that revaluation losses for assets in China, Australia, Europe, the UK and the US will cause a significant decrease in total Patmi for FY2023 as compared to FY2022. CLI reported total Patmi of $861 million in FY2022, down 36% y-o-y.

The 3QFY2023 operational updates announced on Nov 9 had highlighted that “the dampening macro-economic backdrop amidst persistently higher interest rates and geo-political tensions. This has resulted in continuing challenges for deal making, fundraising, and operational pressures (particularly in markets such as China, Australia, Europe, the UK and the US) along with potential significant valuation risks”.

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“The group is in the process of finalising valuations conducted on the Group’s portfolio of properties as at 31 December 2023. Based on preliminary results, the Group expects fair value losses on its portfolio of investment properties, primarily attributable to the investment properties in the above-mentioned markets (China, Australia, Europe, UK and the US). The fair value losses are however non-cash in nature and arose mainly due to higher capitalisation rates and weaker market sentiments. The Group’s core operating earnings have not been significantly impacted and operating cashflow remains stable,” the CLI statement says.

In FY2022, despite a decline in total Patmi, CLI reported positive operating and free cashflow. Similarly, in 1HFY2023, when CLI recorded a 38.3% y-o-y decline in total Patmi to $433 million, operating and free cashflow remained positive, a testament to its conservative capital management strategies.

CLI shares closed Dec 8 at $3.10, unchanged for the day, and down 15.53% year to date.

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