CDL's Kwek Leng Beng, Sherman Kwek announce 3.9% profit growth in 1H marked by boardroom tussle

CNA

4 days ago

SINGAPORE: Following an acrimonious feud in February between City Developments (CDL) executive chairman Kwek Leng Beng and his son Sherman Kwek, the duo put up a united front on Wednesday (Aug 13) to report a 3.9 per cent increase in profit for the first half of the year.
The saga saw Mr Kwek, 84, previously accusing his son of an attempted 'coup' and filing a lawsuit that was dropped two weeks later. The younger Mr Kwek, 49, who is CDL's group chief executive, described his father's actions as 'extreme' at the time.
Acknowledging the public spat before a financial results briefing at M Hotel Singapore City Centre, the elder Kwek said in a statement: "1H 2025 marked a pivotal chapter for our group as we overcame internal challenges with tenacity and fortitude.
'We have put past issues behind us, emerging stronger and more unified.'
Mr Sherman Kwek said: 'Despite some instability in the earlier part of the year due to internal issues, the ensuing period has been marked by stabilisation, renewed alignment and disciplined execution.'
For the half year that ended on Jun 30, CDL reported a revenue of S$1.7 billion (US$1.33 billion), up from S$1.6 billion a year ago.
The company's net profit after tax and non-controlling interest was S$91.2 million, compared with S$87.8 million in the first six months of 2024.
CDL said its performance was adversely affected by foreign exchange losses of S$63.1 million, a reversal from a foreign exchange gain of S$51.3 million in the same period last year.
'Excluding these exchange effects, the group's (net profit after tax and non-controlling interest) would have jumped 322.7 per cent to S$154.3 million,' the company said in a press release.
It said the depreciation of the US dollar significantly affected the group, largely because of US-dollar denominated inter-company loans, which were extended to fund previous US hotel acquisitions and working capital requirements.
SUCCESSION PLANNING?
At the media and analyst briefing on Wednesday, the father and son entered the ballroom together with other executives, with Mr Kwek Leng Beng leading the group in a light blue suit.
The two posed for a photo before the briefing, before Mr Kwek Eik Sheng – nephew of the elder Mr Kwek – joined in. He was named as a possible interim group CEO during the feud.
Also present was group chief financial officer Yiong Yim Ming and group general manager Chia Ngiang Hong.
During the press conference, Mr Kwek Leng Beng was asked if he was still confident in succession planning given the feud, and what the timeline might be.
After his son repeated the question to him, the senior Mr Kwek responded by reiterating what he said in the company's press release – that the board and management are aligned and focused on effective execution and value creation.
Mr Sherman Kwek said the company usually does not speak much about succession plans.
'We haven't really talked much about that in the last 20 years, nor have we ever given a timeline. So I think these things are fluid, and ultimately it will depend on discussions at that point in time,' he said.
He added that it will depend on how shareholders and the board view things.
'For us, it's business as usual as we move forward now. And I think, as the chairman has mentioned, we put the … early part of the first half's events behind us.'
Following a question on the company's share price, the elder Mr Kwek spoke up again.
'As far as (the) succession plan is concerned, the past (is) over. We look forward to the future with strength, tenacity … I am always looking forward, and this should be the case,' he said to applause from the audience.
THE CDL SAGA
In late February, the elder Mr Kwek attempted to sack his son as CEO and filed a lawsuit over alleged governance lapses.
He claimed that Mr Sherman Kwek and a group of directors bypassed CDL's nomination committee to push through changes in the board without proper review.
The younger Mr Kwek said the legal action was not authorised by the majority of the board.
Both men made several public statements, with Mr Sherman Kwek taking aim at Dr Catherine Wu, who was then-independent adviser to the board of Millennium & Copthorne Hotels Limited, a subsidiary of CDL.
He said Dr Wu had been "interfering in matters going well beyond her scope" and "wields and exercises enormous influence". Dr Wu resigned from her role in March.
CDL board member Philip Yeo also spoke up amid the tussle, siding with the elder Mr Kwek and saying that Mr Sherman Kwek's statement on Dr Wu was "an attempt to distract everyone from the matter at hand".
Mr Yeo is a former civil servant who served as executive chairman of the Economic Development Board (EDB) from 1986 to 2001 and as executive co-chairman at EDB from 2001 to 2006. He stepped down as CDL director at the end of July.
On Wednesday, in response to a question about whether a new board member will be appointed following Mr Yeo's departure, Mr Sherman Kwek said it was a matter for the nominating and remuneration committee to discuss and propose.
'So far, I have not heard anything, so I don't think so.'
Two weeks after the Kwek feud came into the spotlight, Mr Kwek Leng Beng said he would drop legal action against his son.
He said the board members had agreed to set aside their differences for the 'greater good' of the company and its stakeholders.
At that time, the company's shares traded at S$4.94, down from S$5.12 in late February before a three-day trading halt was called.