CapitaLand Investment Limited - Annual Report 2021

TREASURY HIGHLIGHTS 1 Debt excludes S$771 million of lease liabilities under SFRS(I)16. DEBT MATURITY PROFILE The Group has proactively built up sufficient cash reserves and credit lines to meet its short-term debt obligations, support its refinancing needs and pursue opportunistic investments. The Group maintains a healthy balance sheet and as at end 2021, had unutilised bank facilities and funds available for use of about S$8.3 billion. As part of its financing strategy, the Group regularly reviews its loan portfolio, taking into account divestment and investment plans, its interest rate outlook and the prevailing credit market conditions. In its review, the Group aims to mitigate refinancing risks, diversify its sources of funding and extend its maturity profile where possible. INTEREST RATE PROFILE The Group manages its finance costs by maintaining a prudent mix of fixed and floating rate borrowings. As at 31 December 2021, the fixed rate borrowings constituted 63% of the portfolio, with the balance on a floating rate basis. As finance costs constitute a major component of the Group’s overall costs, a high percentage in fixed rate funding is maintained for funding cost certainty. In managing its interest rate profile, the Group takes into account the interest rate outlook, the holding periods of its investment portfolio, the timing certainty of its planned divestments and operating cashflow generated from operations. 2022 2023 2024 2025 2026 2027+ DEBT 1 MATURITY PROFILE (S$ billion) 2.5 2.7 3.5 1.7 1.3 1.1 FY 2021 Performance Review FINANCIAL PERFORMANCE 2020 2021 Unutilised bank facilities and funds available for use (S$ million)¹ 2,787 8,287 Unutilised debt securities capacity (S$ million)² 4,905 10,928 Net debt³/Equity (times) 0.62 4 0.48 Net debt³/EBITDA (times) 5 8.9 4 4.7 Interest cover ratio (times) 5 4.0 6.3 Interest service ratio (times) 2.5 4.1 Implied interest cost 2.9% 2.7% Secured debt ratio 44% 4 35% Bank borrowings/Debt securities 90%/10% 4 91%/9% Average debt maturity 3.0 years 4 2.8 years Fixed/Floating rate debt 45%/55% 4 63%/37% 1 Committed and uncommitted bank facilities in place. 2 Includes the newly established S$6,000 million Euro Medium TermNote Programme established for CLI Treasury Limited in November 2021. 3 Includes S$748 million and S$771 million of lease liabilities under SFRS(I)16 for 2020 and 2021 respectively. 4 Includes loans due to related corporations pursuant to the internal restructuring and listing of CapitaLand Investment Limited (“CLI”) and the acquisition of subsidiaries. 5 Net Debt/EBITDA and Interest Cover Ratio exclude unrealised revaluation/impairment. CAPITAL MANAGEMENT The Group is in a strong liquidity position with S$3.9 billion of cash and cash equivalents and S$4.4 billion in available undrawn bank facilities. Net gearing as at end 2021 was lower at 0.48 times as compared to 0.62 times as at end 2020 due to higher cash arising from receipt of divestment proceeds. The Group’s Interest Cover Ratio and Interest Service Ratio were 6.3 times and 4.1 times respectively. Both ratios have improved with a better operating environment during the year. Finance costs for the Group were S$353 million for the year ended 2021. This was about 6.4% lower compared to S$377 million in 2020. Implied interest cost was 2.7% per annum. SOURCES OF FUNDING As at year end, 91% of the Group’s total debt was funded by bank borrowings and the balance 9% was funded through debt securities. With CLI listed on 20 September 2021, it will seek to diversify and balance its sources of funding over time to ensure financial flexibility and mitigate concentration risk. SOURCES OF FUNDING (S$ billion) Debt Securities Bank Borrowings Loans due to related corporations 2 2020 2021 12.6 1 11.6 91% 51% 10% 1.2 9% 39% 12.8 1 1 Debt excludes S$748 million and S$771 million of lease liabilities under SFRS(I)16 for 2020 and 2021 respectively. 2 The loans due to related corporations were refinanced using bank loans and cash in 2021. 6.4 1.3 4.9 FINANCIAL PERFORMANCE FY 2021 Performance Review Annual Report 2021 35 CapitaLand Investment Limited 34