City Developments Limited

Good morning ladies and gentlemen, friends from the media, analysts, bankers, investors and CDL colleagues. My name is Belinda and I'm the Head of Investor Relations and Corporate Communications at CDL. On behalf of the CDL management, thank you so much for joining us today for CDL's briefing on our first half, ended 30th June 2025 financial results. Now, the first half 2025 was a significant period for our group, but I am so delighted to see everyone here in this room at the M Social Singapore, as well as the hundreds of you joining us virtually online this morning. So for today's briefing, in line with CDL's commitment to environmental sustainability, we encourage you to please scan the QR code on the screen earlier so that you can download the documents that were uploaded on SGXNet. So here is the QR code for those that are joining online you can also similarly download those documents which are available on the SGX website as well as LCDR website Now they include firstly a copy of the detailed financial statement secondly a press release summarizing the key highlights of our first half 2025 performance and thirdly a presentation deck that the management team will be walking through very shortly Now, for all our guests joining us virtually, you would similarly be seeing these documents online. I would like to introduce you to the CDL Management Panel. In the center, we have our Executive Chairman, Mr. Kwek Ling Beng. Followed by ex-co-members, Mr. Sherman Quek, our group CEO on his right, Mr. Quek Ek Shing, our group COO on his left, and then Mr. Xia Niang Hong, our group general manager, and Ms. Yong Yin Ming, our group chief financial officer. Now the format of today's briefing will be in two parts. We will kick off with a presentation of some of the key highlights led by Sherman, then later followed by Yiming on the financial highlights, and then we will kick off with the Q&A for an opportunity for us to engage with the panelists. So without further ado, I would just like to invite Sherman to please come forward and then let's kick start the presentation. Thanks.

Morning everyone, thank you for taking the time to come attend our briefing for our first half results for 2025 and of course a warm welcome to everyone online as well. I think today a lot of people joining us online so great to see your interest. I will take us through our results along with Yim Ming and subsequently we will open it up for Q&A. So as Bell has mentioned, I'll present an overview and strategic initiatives. Yim Ming presented financial highlights. We're not presenting the operations review as always and that's just for your leisure reading in the deck. Okay so just an overview of our results for this year. We have done better than the first half last year. Obviously could have been a lot better but we were hampered by unrealized net exchange losses. This is basically because of USD denominated loans that we have made to our US operations So you can see in that text there, if not for, and last year by the way was a big gain as well. So this year the loss was 63 million versus last year the gain was 51. So if you net all that out, that's already a big swing. And as we have put in that small yellow text box there, our PACME would have gone up by 323%. if you put aside these foreign exchange losses and gains. You know, a little bit disappointed the exchange didn't work out in our favour because the US dollar depreciated, but otherwise it was a good set of results and our Singapore performance on the development side was strong. We also had some divestments. We don't double count, so these divestments like we mentioned there, like this ransom swap site we sold in London as well as the office component of HLCC in Suzhou, I mean, The core earnings were stronger Actually, on PBT and Padme, we did have a good show, and we were helped, obviously, by an EC project that completed in the first half this year, which is a Copen grant. EC is a JV between us and MCL Land, and as per accounting rules for so-called EC projects, you will recognize the full revenue and profit upon completion. So some highlights of our NAB and our RNAB, which is actually more of the reflective number, which includes the fair value of IPs. Of course, we've also given you a snapshot of what it looks like if we also fair valued our hotels. So you can see that we are still trading at a big discount and we do want to close the gap. NAB has gone down slightly but we put down the reasons there. We are doing a special interim dividend of $0.03 and of course this year we're expecting quite outsized divestments so therefore hopefully we'll have a nice surprise for all of you at year end. Share price performance of course until 30th June it was 519 and since then it has continued to trend upwards so we are also grateful for the market momentum. Key highlights for this year, as mentioned earlier, we had total sales revenue, so the value of units that were sold this year has hit $2.2 billion, which is a 90% increase over the first half of last year. We have sold 903 units, and this is obviously powered by the ORI in Topayo, which is our joint venture project. And since then, we've also started to replenish sites. So we've replenished actually three sites. One is Lakeside Drive in Jurong West. And the other two sites are not awarded yet, but hopefully should be awarded soon. And those are the two EC sites that we recently garnered. One is at Senja Close, which is in Bukit Panjang. And the other is Woodlands Drive. And investment properties portfolio across our group remains stable. As you can see, Singapore office retail has been strong. UK, I think since last year, we've suffered some effects from the weaker market there. But overall, our three commercial properties still performing well. And of course, the living sector continues to be very, very resilient. And we are grateful for that. In terms of the hotel operations, it hasn't been that strong of a year for our hospitality side, notably in Singapore and the US. Against last year, which was stronger years, we've seen a bit of a dip, but overall I think The hotel division still performed relatively well and some of the new acquisitions that we have made have actually come in and provided strong contribution. So things like the Hilton in Paris in the Opera District that was acquired early last year. So that has also come in and given a full half year of contribution. In terms of capital recycling, I think that's something that since last year we've committed to our shareholders that we will accelerate that. So far this year, we have achieved more than $1.5 billion in contracted divestments, meaning divestments that we contract this year. So again, this amount does not include ransom swaths, pseudo office and retail components and stuff like that. So, no double counting. And of course, we also sold a few other properties in Singapore, a city industrial building. We are under contract for Piccadilly Galleria, which is the commercial component for our JV project, Piccadilly Grand in Farah Park. And of course the biggest one was South Beach, which we're selling our 50.1% stake to our joint venture partner. In the US, we also have managed to get two sales, one completed and one contracted. This slide we flashed up at every briefing but hasn't changed much. I mean the top line, the top row represents basically at our book value and so the more useful one is the bottom row which is the fair value of our IPs and hotel assets and same here you can see Singapore still accounts for close to 50% of our total asset base. Obviously the one on the right by business segment will vary. It depends on how much land, development land that we replenish in Singapore at any one time. So between IP, which is investment properties, and DP, development properties, it will fluctuate somewhat. But it gives you a good snapshot of kind of where we're at right now. Okay, so on to our GET strategy, which everyone is very familiar with, so I'm not going to elaborate on it. As mentioned earlier, I think we have been very disciplined in our land replenishment strategy and we are very pleased that this year we've been able to replenish three sites because we are running somewhat low in terms of our land bank. We do have Newport residences which thankfully we don't have any pressing deadlines so we're still kind of holding there to see when would be optimal time to launch this luxury project at the greater southern waterfront. Zion Grant is our JV with Mitsui Fudo San Asia and so that we're targeting for early Q4 launch hopefully that will do well I think all of you have seen the previous weekend the one before this past weekend where I think there were two new launches in that area and Rivergreen and Promenade Peak and you know both have done well so hopefully that's a good sign in August as well for Zion Grant The only launch we've done this year is the Ori, which we are 92% sold right now, so we continue to do what we do best, which is Singapore land development. At the same time, obviously, as I mentioned earlier, we have committed to ensure that Every year, we are deploying funds for new GLS tenders in Singapore, as well as for overseas land development, as well as commercial assets. We have to ensure that we keep our gearing in check. Obviously, our gearing has ticked up a bit because we have done three GLS tenders in Singapore successfully. But with the contracted divestments that we've done this year, I think that will hold things in check. And plus, there's a pipeline of many more divestments to come. So hopefully, I think people, shareholders will be very delighted with the news as we announce them over time. But this is what we have done this year. And just again to give you a bit more insight into this, although I verbalized it in previous endless briefings, but just to say again, the numbers are a bit skewed because on the divestment side, we don't include residential unit sales. So if I buy a piece of land in Singapore, it's included in my investment side. But when I sell those individual units, I don't include that in divestment. So divestment is really for pure investment. Divestment of assets or land that's undeveloped. So this number is going to look a bit skewed, but having said that, despite that we have 1.2 billion of investments this year, for the first half of this year, and the whole amount of that was for the three GLS sites in Singapore, we still have actually done divestments that's far greater than that amount. I think this will show you our discipline as we move forward. Now, it doesn't mean that we won't make any more investments for the second half this year. I think as you divest, we are trying to optimise our portfolio and we're also going to seize on good opportunities that allow us to either grow our future land bank, be it locally or overseas, or have assets that are very complementary to our portfolio that are currently undervalued because certain markets are weaker or dislocated. So from time to time, we will still make investments, but I think we are trying to demonstrate our commitment to having an active divestment strategy, capital recycling strategy as I call it, that will move forward and be a constant part of our business. Because we can't just keep buying, we also have to sell. This slide is showing you our so-called accolades and recognition that we've gained so far, especially on the sustainability side. As I've mentioned earlier, I think it's an important part. I mean, we have to care about this planet that we live on as part of our social responsibility. And so I think we continue to push forward on this front where I would say we are one of the leading firms in Asia when it comes to CSR. Onto the last bit, which is on transformation, just to give you a flavour of where we're at now. Why do we put the global living sector within transformation? I think two reasons for it. One, these are kind of new asset classes to us. While it is real estate, but these are all basically recurring income in nature and they're for people to live in. and so because we decided since couple of years ago that we're going to focus on building up scale here we've been gradually working towards it and hasn't been easy to make good acquisitions to gain scale for instance you can see that in Japan now we have 40 operational multi-family assets or PRS as we like to call them private rented sector term we borrow from the UK Rental Housing New Portfolio So it's not been easy for us to actually accumulate this whole portfolio. So therefore, we put it in transformation because A, it's the living sector over the last, I would say, four or five years has been a new angle for us. Fund Management Platforms Market value of what it would be worth now of around $4 billion. So this is a big portfolio. We have a total of 4,564 multifamily units and 2,368 student accommodation beds. So I would say this has been something that we are very proud that we have grown and it's going to make our business more resilient as well as diversify us across our traditional asset classes of residential and office and retail. And Singapore, of course, we did always have this service department, The Grove, but now we have three developments that are 3 projects that are under development and you can see that each project will also have a substantial be it service, residence or co-living component so that's going to form a nice complement to our whole living sector portfolio and as mentioned the other part of TransNation is of course the fund management we will continue to push forward on this We weren't successful in listing our UK commercial assets a couple of years ago. Markets were a bit choppy. Capital markets weren't favourable then. But at the right time, we will obviously try again. We believe that belongs better in a public format, which is a REIT. and at the same time we are also managers for two REITs iREIT which is our partnership with TKO one of the bigger Europe fund managers and so we are joint manager for iREIT Global and of course the very REIT that we listed and sponsored which is CDL Hospitality Trust so we continue to actively work on both of these REITs to try to help them propel their growth and these are platforms that are great for us. I think we can demonstrate our management skills as well as in future we could provide further asset sponsorship to both of these REITs. and of course we're looking at the private side as well so we've been working at it for a while so hopefully in due course we can share some good news if we're able to do some private equity funds using what I mentioned before some of our global living portfolio to seed some of these funds. And again, I think the reason for going down the fund management route, of course many of the other developers in Singapore have done a great job on this front, is because I think we want to have part of our business go more asset-light, so we're really managing third-party money here, rather than warehousing everything on our balance sheet. and the fees, the recurring income from the management fees and all the good stuff from fund management will really help, I think, to improve our recurring income and strengthen our return on equity too. Okay, my last slide before I hand it to Yiming. These are our key priorities. We kind of flashed it up at the last analyst briefing. We condensed it a bit more, and so we're just putting it up again. I think we aim to have a resilient portfolio, which means that we do need to exercise strong investment discipline, be it locally or overseas. We want to achieve diversification across asset classes and geographies. I think this is important. If we had all of our assets concentrated in one sector or in one country, I think that's actually pretty risky. So I think we've over the last, we started this diversification push, if you don't include the hotels, since 2010. Over the last 15 years, we've achieved very decent results, outcome when it comes to our diversification push. Capital management, as mentioned earlier, will continue to accelerate capital recycling and we aim to strengthen ROE as well as ensure that we have sustainable and hopefully growing dividends. and of course we need to continue to future-proof our business. We harness innovation and AI in various aspects of our company as well as we have to ensure that we are responsible to our planet and to shareholders. So these are our key priorities and I will field more questions during Q&A later. May I now pass it over to our CFO, Yin Ming. Thank you.

Thank you, Chairman. Morning, ladies and gentlemen. We'll move on to PBT by segment first. DP segment performed well, and PBT has jumped significantly. Contributors to first half of 2025 include Ransom's Wharf, the office block of Suzhou-Hong Kong City Centre, Singapore projects such as Miss Norwood Union Square Residences, while the previous year contributor were largely from Shenzhen Tech Park as well as Erwell Residences. While revenue for this segment increased 24%, PVT increased substantially due to JV projects, Copen Grant which TOP in April 25, Canning Hill Piers, Orry and Temput Su. In light of accounting standards for JV, these projects do not contribute to revenue, but contribute to profits as their equity accounted for. Hence you see a huge jump in profits for first half 25 versus 24. So just for information, these JV projects will have contributed $1 billion in revenue on a like-for-like basis. For hotel operations, revenue fell slightly despite a 0.5% increase in REVPAR. The next slide will have more colour on REVPAR, but the lower hotel operations is due to foreign exchange impact, particularly for our US hotel operations, which are translated at a lower rate with the depreciation of the USD, as well as lower F&B revenues. The group adopts a natural hedging for all its operations geographically. USC has a sharp decline from April following the US tariffs. The US hotel revenues is about 28% of total hotel revenues, and the lower exchange resulted in a decline. However, as the US operations is overall a marginal loss for first class 25, the FX impact on the bottom line is not material. So while the P&L FX is not significant, the unrealized FX arising from the balance sheet translation is material. So the hotel operations has a significant foreign exchange loss, which Sherman has mentioned, arising from intercompany loans that we have extended to our U.S. operations for hotel acquisitions and working capital in the past, especially during the COVID years. I just want to remind that this is unrealized effects. It does not affect cash flow and operations, and this position will reverse should the USD appreciates. So this segment reports a loss of $84 million for first half 25 due to exchange losses as mentioned, financing costs and inflationary cost pressures. However, do also note that hotel operations are seasonal in nature, the first quarter is usually the poorest as we are geographically dispersed. So overall, hotel reports are weaker EBITDA by 19%, hit by weaker performance in the key markets we operate in. In Singapore, REFPA declined 13.6%, London declined of 2%, and for New York, while REFPA increased marginally, the New York was faced with challenges from various fronts, including the M-Social Downtown New York, which had reduced room inventory as it was undergoing renovations, as well as inflationary pressures and F&B losses. Investment properties, fairly stable for revenue. The group has a geographical portfolio of properties. Decline in rentals from the UK commercial were offset by Republic Plaza and the renovated City Square Mall, as well as Jung Salong Mall in Phuket and our living sector assets in UK and Japan. As part of our active recycling, the group divested city industrial buildings, strata units in Fortune Center, the car park at the venue, and of course the retail mall at Hong Kong City Center. These divestments brought in gains of $97 million, which is lower than last year, which comprised divestments in strata units in our other industrial portfolios. So the lower PBT for this segment is due to lower divestment gains and higher net financing costs, again due to exchange. Hence, looking at EBITDA as a better indicator. So if you look at the IP segment, excluding divestment gains on a light-for-light basis, EBITDA will actually have increased 4%. Other segments, revenue increased due to our facilities management arm and higher management fees that we charge our JV projects. And again, the loss is due to flux in FX. Delving a little deeper into REFPA by region, so do note that this is on constant currency so it removes the effects of exchange and these are translated as same rates. Singapore REFPA dropped 13.6% due to fewer large scale events such as the famous Taylor Swift concert and the biannual Singapore Airshow which boosted the previous half year 2024. Decline in REFPA is in line with mid-tier and high-tier hotels across Singapore. However, our Singapore hotels was reliant on the shipping segment, which was hit by the global turmoil and affected occupancy for a few of our Singapore hotels. Rest of Asia, REFPA is boosted by M-Social Pocket, which had full operations and offset by our Beijing hotel, which saw lower demand. Australasia, REFPA boosted by acquisition growth for Mayfair Christchurch. For New York, REFPA increases is due to two hotels, which is Biltmore LA as well as HempSocial Downtown, which commanded much better rates for the renovated rooms. Over to London, decline is largely due to Gloucester and Knightsbridge due to rate pressures. Notably, Mayfair performed very well with a 8% increase in REFPA. Rest of UK, again, impacted by acquisition growth, which boosted 2025 performance. So overall REFPA, hotel ops increased 0.5% with a slight decline in occupancy but a 1.7% increase in rate. This is boosted largely by acquisition growth. So excluding the two acquisition growth, REFPA will actually have marginally declined a little bit. GOP margin decreased 2.1% largely due to Singapore, rest of Asia and US contributed by lower revenues compounded by higher costs. Next, we move on to revenue by segment. Overall revenue up 8%, largely due to the PD segment boosted by Ransom Swap and HLCC. The PD segment did well. Hotel operations marginal decline, I mentioned due to FX and lower F&B. IP and the other segments are fairly resilient. Next, we move on to EBITDA by segment. Growth of 21%, largely due to the property development segment, which increased two-fold. Hotel EBITDA is resilient at $94 million. While it's challenging with the cost pressures and macroeconomic conditions, all regions are EBITDA positive except for US which reported a marginal EBITDA loss. EBITDA is also largely driven by divestment gains which led the IP bars to be much higher. The group looks at EBITDA very closely and we always endeavour a $1 billion in EBITDA annually. Now let's move on to PBT by segment. Decline by 10% to $140 million. So it's impacted by financing costs and depreciation. Sounds like broken record. We account for our properties at the cost model and depreciates them vis-a-vis the fair value model. So decline is largely due to hotel operations reporting a loss. So I've mentioned earlier the unfavorable exchange dealt a great blow to this segment. So PBT has surged to 152. So I didn't calibrate this with Sherman, but I think the emphasis of the results is that CDL is a real estate player across various core segments, across various geographies. So with our diversified portfolio, we are able to weather various challenges. On the balance sheet, we continue to have strong and robust fundamentals. Cash is $1.8 billion, along with committed credit facilities, $3.5 billion. You might have noticed that it has dropped from FY24 by a billion, and that's because of the monies that have been expended to complete our SYNCNT acquisition. Gearing stands at 70%. It's a marginal increase from 69% in December 24th. Average borrowing cost lowered to 4%. We are heartened at the latest rate cut by Bank of England, awaiting for at least one or two more. So we will definitely close the year below 4%. SG rates have declined gradually. The group took the chance to increase our fixed rate portfolio, and now it stands at 43%. We have a balance debt expiry and debt currency. So for remaining of 2025, we have already made arrangements for refinancing and repayments. We will also look at a window to issue more fixed rate bonds in the next 12 months. Lastly, for FX risk, so we adopt a natural hedging and do not take speculative position. So this slide shows the FX exposure in the key geographical, and you can probably see the US natural hedge is only about 51%. But overall, we still have a strong natural hedge, about 77%. That's all I have. Thank you, everyone. Hand over to Belinda.