Capitaland Co
Capitaland Co
Capitaland Co
and provision of consultancy services. The segment of CapitaLand include CapitaLand China,
CapitaLand Mall Asia, Ascott Limited, CapitaLand Singapore and others. CapitaLand was
established in November 2000 and its headquarters are found in Singapore. The CapitaLand
Singapore y owns, manage and develop residential properties for sale in Malaysia and Singapore.
properties. The CapitaLand Mall Asia is involved in owning and developing of shopping mores
in China, Singapore, India, Malaysia and Japan. The Ascott Limited segment act as an
international serviced residence owner-operator and its operation are in cities like Europe, Asia,
U.S, Pacific and Gulf region. The current price for the company share is 3.370 SGD which is
indicate 0.01 increases. To improve the company sustainability the company have invested more
on technology hence creative a positive corporate image. In 2017 the company registered
PATMI of S$267.7 million and revenue $4,609.8 million which was 12.2% decrease. This was a
result ower completion and handover of units from development projects in China.
The company is set to embark to next stage of enhancing return on stakeholder and
creating long-term sustainable value. The two project for the company growths that is real estate
investment and international expansion will help the in harnessing core competence and
competitive advantage across all classes of assets. The will also help the company allocate
To income statement and statement of financial position horizontal and vertical analysis method
were used to analyze business performance of Capitaland Company. The ability of the business
a positive figure (3.9%) in 2017. Majority of the company investment was in current asset as at
end of 2017 financial period. Current asset accounted for 19.9% of the total asset. With the case
of Non-current asset there was also big change. Property investment has increase from 15.5
million to 36.5 million dollars which is 135%. The total liabilities have increased by 42% while
the total equity have increased with 31% since year 2013.
Revenue and profits have also shown gradual increase over the years 31% and 48% respectively
Total Revenue
6,000
5,000
4,000
3,000
Total Revenue
2,000
1,000
-
2017 2016 2015 2014 2013
From 2013 to 2016 the Capitaland revenue increased gradually but there was a slight decrease in
2017. The 12% decrease as result of lower handover and completion of china project.
Profit
2,500
2,000
1,500
Net Income
1,000
500
0
2017 2016 2015 2014 2013
Despite decrease in revenue the company profits increased rapidly in 2017. This may have
resulted from decrease in cost of sale and operational expenses. The in Singapore the cost of
doing property have decreased and hence have impact on the company.
Profitability Ratios
The demand of property has shown a rising demand in the last one year. This is after four
years of decline in fall of house prices. Singapore property market is expanding again hence
growing homebuilder sentiment. These changes in the market have affected the profitability of
The table above show the profitability ratios. The profitability ratios show how profit of the
company is affected by various variables. The company shows positive results in terms of profit.
The profit increased in 2014 but dropped in 2014. The drop in 2015 profits was attributed by
lower values on property revaluation gains and higher provision for predicted losses and
impairment. in 2016 and 2017 the profitability increased. Capitaland profitability increased
from 35% to 40% year by year hence the company applied good strategies to promote it
business. The operating ratio for the company are lowe compared to gross profit ratio hence
despite more expenditure spent by the company they still get profit. There is a slight change on
ROA from 3% in 2013 to 4% 2014 and then reduced to 3% on 2015, then increased in 2017 to
4%. This show that Capitaland made more profit on less investment.
They were good figure because Singtel earned more money on less amount of investment.
Likewise, ROA had the slight decrease from 16% in 2012 to 15.6% in 2015 as well as ROA
declined from 13.4% in 2011, grew drastically 26.1% in 2012 and then decreased again to 11.9%
in 2015. The trend was the same for Return on Asset though the asset invested was slightly
higher.
2. Dividend Ratios
performance. The method for divided can be stock dividend, extraordinary dividend or cash
dividend. Capitaland issue cash dividend based on company profit and investment opportunity.
Dividend 510 425 382 384 341
The company dividend policy is to declare at least 30% of annual cash PATMI as dividend to the
shareholders. This is defined sum of realize valuation gains/losses, portfolio gains/losses and
PATMI. The table above shows that the earning per share for Capitaland increased from 8% to
12%. This increase results from increase in profits. The company have low dividend payable
ratio. This is because of many investment opportunities available for the company. The payout
ratio grew between 2013 and 2016 though there was decrease in 2017 despite increase in profits.
It is also noted that in 2017 the earning per share increased though there was decline in payout
Business performance is not only measured through profitability ratio it is also accessed
by examining the liquidity and stability of the company. The liquidity risk is a key factor to
consider when measuring business performance. Liquidity measures how the business is able to
pay it short term and long term debt when they fall due. A health business should be able to pay
all its financial obligations on time. The table below applied to conclude the ability of Capitaland
Creditors and investors use current ratio to understand the liquidity of the business. The
adeal current ratio is 1:1. From the table above it clear that the current ratio has change
from2013 to 2014 and capitaland Ltd current was higher than 1. This is favorable current ratio
and hence the company able to pay its debt when they fall due. The ideal quick ratio also is 1:1.
The quick ratios for Capitaland is lower than 1 except in2013 which translate that the company
Beside that the interest on debt is used to measure the business liquidity. A higher
coverage ratio is more favorable than smaller one since high interest coverage ratio describes
business ability to pay interest based on the company profits. Interest coverage ratio for
The other ratio evacuated is debt to equity ratio. Higher debt to equity ratio means that
the business faces more risk in terms of loans. The debt to equity Ratio for Capitaland is quite
higher between 0.84 and 0.90. This shows that the company is not financial stable and hence
Efficiency Ratios
Efficiency ratio measure how well business is able to utilize it asset to generate incomes.
Investors use efficiency ratio improves the company image to the creditors and investors. It is
Asset turnover, current turnover and inventory turnover ratio are used to measure the company
efficiency. The table above show that the asset turnover ratios were lower than 1 from 2013 to
20115. This shows that Capitaland Company is not able to use it asset efficiently and optimally
to generate profit. The ratio of asset to the revenue generate is very less compared to the
investment. The inventory turnover ratio is also less than one. The management should come
with more innovating way to market their product to increase their revenue.
The result of the company shows that the company outperforms the industry based on the
basis of Return on Equity. Currently the ROE is 9.2% which is relatively high compared to the
industry return on investment of 6.6% over the past one year. The company has been able to
generate higher profits using the lower equity capital. However return on equity does not tell
how much Capitaland has borrowed on the debt hence the need for evaluating the company
Return on equity measure the company profits against the shareholder equity level. For
example if Capitaland invest one dollar in form of equity it will be able to generate 0.07 dollar in
earning from this. A higher ROE is preferred however other decision needs to be considered
Apart from financial parameters the performance is measured by use of other non-
financial indictors including the customer service, company brand, technology and innovation.
The companies have technology to enhance service delivery. For example in the recent
Capitaland launch digitalization drive to enhance e-payment of properties. The customers are
able to pay for services at comfort of their home. Digital has helped the customers to become
more influential. The company has realized that digital technology has replaced the human being
in doing business more efficiently and effectively. To increase the asset turnover ratio the
Corporate governance
Corporate governance is set of practice that every stakeholder in the business should
comply with. Capitaland has developed in all material aspects with the guidelines, principles,
committed in promoting its corporate governance practices. This can only be achieved through
promoting accountability, transparency, integrity, maintain practices and policies that meet
specific business requirement hence promoting business respect and trust from all the
stakeholders. All the business stakeholder should remain focused on complying with code of
ethics and corporate governance 2012 while delivering the company long-term strategic goals
and operational excellence. It is the responsibility of the company Board of Directors to promote
and implement corporate governance policies and standards. To remain competitive the company
Board of director should enhance proper governance such that the customers, investors and other
including the chairman). The company chairman and P&GCEO perform their duties
independently.
member. The chairman is responsible of directing and leading the board. The P&GCEO, Mr Lim
Ming Yan is responsible for managing the business of the Group and developing and implement
The chairman is the leader of the group and facilitates the condition for overall success of
the individual directors, board and board committees. With consultation with the P&GCEO the
chairman ensure that company agendas and information are delivered to the shareholder on time.
The chairman play critical role in providing guidance, advice, direction and oversight to the
strategy of P&GCOE. The chairman acts as the bridge between the executives and other
The chairman and P&GCEO should carry out their responsibilities independently and
should not be related. The separation of duties between the chairman and the P&GCEO provide
health professional relationship between the management and the board hence facilitating
achievement of the company objective. There is no need for the company having a lead director
The chairman with the help of the other 10 board members act together to enhance
business performance. The board review and make recommendation on the size and composition
of the Board, membership and structure of the board committee and Directors succession plan.
The Board recommends and reviews the process for evaluating the directors, Board and Board
Committees performance. The board develops and identifies professional and training
It is clear that role of the company director is to promote corporate governance. As one of
the director I would ensure that the company investors and customer get value for their money
hence improving the company corporate image. In order to achieve this director should conduct
himself in money that creates trust to all the stakeholders of the business. The director should
ensure that he or she is accountable for all the decision he make when executing his
responsibility. As director of the company should ensure that the other directors perform their
responsibilities in accordance to the company corporate governance policy. To ensure that the
long-term objective of the company are achieved every director should carry oversight role on
the management hence making sure that the all approved recommendations are implemented.
Finally the director should be updated with the current affairs. This help the director to make
investments recommendation that will affect the performance of the company positively
therefore maximizing the wealth of the shareholder and promoting the company corporate image.