Singapore, 31 October 2001 -- CapitaLand Limited reported net profit after tax and minority interest (MI) of $82 million in 3Q01 compared to a $320 million loss in 2Q01. The return to profitability is the result of steady income from commercial properties, further divestment gains and lower interest costs in the third quarter. The $82 million profit recorded in 3Q01 reduced losses through to the third quarter by 31% to $186 million, from $268 million as at end June. Earnings before interest and tax (EBIT) for 3Q01 was $200 million, an 800% increase from $22 million in 2Q01.3Q01 turnover declined 12% to $874 million compared to 2Q01. This was due largely to the loss of contributions from divested assets and weak residential sales. However, interest cost has been reduced by 21% to $100 million. Net borrowings totalled $7.0 billion at the end of September, compared to $7.7 billion as at end June.

Earnings before interest and tax ("EBIT)"

Said Liew Mun Leong, President and CEO, CapitaLand Limited, "Our strategy is on track. We continue to strengthen our balance sheet as a result of our divestments and positive contributions from several sectors, both domestic and international. To date, we have successfully divested assets totalling more than $1.5 billion. Our net cashflow from operations for the current year through to third quarter was almost $1 billion. With much of the proceeds from our divestments being used to pare down our debt, we continue to execute our strategy to lower our gearing, which now stands at 0.83 times. Our lower debt has resulted in a significant reduction in our third quarter interest cost. The anticipated successful launch of our SingMall Property Trust represents yet another step towards becoming an asset light and fee-based property company."

Strategic Business Unit ("SBU")'s Performance (Q301 vs. Q201)

3Q01 EBIT for the Commercial and Fund Management SBU was up 27% to $100 million from $79 million in the previous quarter. The EBIT includes a $42 million gain generated from the sale of Pidemco Centre, The Adelphi and part of Temasek Tower to a 50:50 joint venture property fund between CapitaLand Commercial and ERGO Insurance Group. CapitaLand Commercial will act as the fund manager of the property fund. Revenue for the Commercial and Fund Management SBU, however, declined 15% to $121 million due to a smaller investment property portfolio following the successful execution of its divestment strategy.

The Residential SBU posted a positive EBIT of $60 million. Both Singapore and overseas projects made positive EBIT contributions.

The Ascott Group's sale of the retail element of Orchard Point reduced its rental income. However, the sale has positioned the group to expand its serviced residence portfolio. Lower sales from the remaining residential properties and lower income due to the weaker US dollar caused revenue and EBIT to decline. Revenue was $74 million. This represented a 10% reduction. EBIT dropped 32% to $18 million. However, the Ascott's third quarter performance was significantly improved as compared to the same period last year.

Our Hotels SBU, comprising Raffles Holdings Group and RC Hotels Pte Ltd, recorded revenue growth of 7% to $126 million in 3Q01 compared to 2Q01. This figure included the maiden contribution from the Swissotel chain. The general economic slowdown as well as the September 11 terrorist attacks and subsequent retaliatory actions have resulted in lower leisure and business travels demand, hotel occupancy and food and beverage spending, thereby causing a $1 million EBIT loss.

For more information, please contact:

Basskaran Nair SVP, Communications Tel: 8233 554

George TanasijevichSVP, Equity Markets Tel: 8233 535

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