REAL estate group UOL has announced a 373.9 per cent leap in net profit to S$572.7 million for its fiscal second half ended Dec 31, 2023, on a S$442.3 million gain from the sale of a wholly owned subsidiary that held Parkroyal on Kitchener Road.
Before fair value and other gains, the Mainboard-listed group’s half-year profit was down 12 per cent to S$145.5 million, from S$164.5 million in the year-ago period, it disclosed in a bourse filing on Tuesday (Feb 27).
The results translate to earnings per share (EPS) of S$0.6778, against EPS of S$0.1431 in H2 FY22.
Overall, the full-year profit was up 43.9 per cent, at S$707.7 million, versus S$491.9 million in the previous year. With this, the board proposed a special dividend of S$0.05 per share on top of a first and final dividend of S$0.15 per share.
Meanwhile, the group said its H2 revenue was down 21.1 per cent to S$1.3 billion, as takings from hotel operations tumbled by 45 per cent or S$443.4 million on lower contributions from its Avenue South Residence, Park Eleven Shanghai, The Tre Ver and Clavon properties.
The drop is partially offset by higher progressive revenue recognition from AMO Residence and The Watergardens at Canberra, it stated.
Revenue from hotel operations rose, however, by 21 per cent or S$73.5 million, as all of the group’s hotels – except for those affected by major refurbishments – continued to benefit from a rebound in global travel in their respective countries post-Covid.
H2 investment income grew as well, by 42 per cent or S$10.5 million, on higher dividends received from quoted equity investments, while its finance income grew 9 per cent or S$1.8 million on higher deposit rates and interest income from loans to a joint venture company.
The group’s finance expenses in the half grew 30 per cent or S$24.8 million, however, as interest rates rose. The weighted average interest rate on external borrowings for the group for H2 FY23 came in at 3.87 per cent, versus 2.87 per cent in the year-ago period.
For the full year, revenue dipped by 16.2 per cent. The group attributed this to lower revenue from property development, but said this is partially offset by higher takings from hotel operations, which rose 38 per cent or S$208.7 million in the year.
Nevertheless, UOL group chief executive Liam Wee Sin said sales in the company’s Singapore residential projects exceeded expectations amidst a challenging economic environment and following two rounds of cooling measures.
Noting that Watten House, its condominium development in Bukit Timah, performed especially well, given its 64 per cent in sales booking last year, he said there remains strong demand for good products in attractive locations.
Ongoing asset enhancement initiatives under the group’s office and retail portfolio will contribute incrementally to its bottom line, he added, pointing out that positive rental reversions were achieved.
He also stated that Singapore’s hospitality sector is likely to continue its growth against the backdrop of recovery in travels. Office rents are likely to moderate, however, due to a new pipeline of offices and more companies may right-size the office in view of economic uncertainties, he said.
The group, meanwhile, said Wee Ee Lim, one of the sons of the late Dr Wee Cho Yaw, has been appointed as the chairman of its board, succeeding his father who died on Feb 3.
Wee Ee Lim is concurrently president and chief executive officer of Haw Par Corporation, which created Singapore’s famous Tiger Balm ointment.
Shares of UOL closed at S$6.01, down S$0.10 or 1.6 per cent on Tuesday, before the results’ release.
