Mon, 12/05/2014 - 10:07
Singapore property developer OUE Limited made a net profit of SGD1.0 billion for the three months ended 31 March 2014, an increase of over 100 per cent from the SGD2.0 million for the same quarter in 2013.
This increase is largely due to a recognition of net fair value gain on Lippo Plaza property which amounted to SGD114.8 million, as well as the gain amounting to SGD986.4 million, resulting from unlocking the values of Mandarin Orchard Singapore and Mandarin Gallery, which had been disposed to OUE Hospitality Trust (OUE H-TRUST).
OUE H-TRUST was deconsolidated as a result of a reduction in the group's effective interest subsequent to a distribution in specie made to shareholders in Q1 2014. OUE H-TRUST is an associate of the group as at 31 March 2014.
The above gains are offset by an allowance for foreseeable loss of SGD105.0 million provided on Twin Peaks based on the latest valuation obtained.
On the operations front, Q1 2014 also saw a 1.5 per cent year-on-year increase in total revenue to SGD106.9 million from SGD105.4 million in Q1 2013. Consequently, gross profit increased from SGD55.2 million to SGD60.4 million for the same reporting period. These were the results of contributions from Lippo Plaza property and US Bank Tower.
The group saw a 4.5 per cent increase in earnings before interest and tax to SGD40.2 million and a 26.9 per cent decline in finance expenses to SGD24.4 million. Combined with the one-off gains, the group recorded a net profit of SGD1.0 billion in Q1 2014, compared to SGD2.0 million on the corresponding quarter.
Based on net attributable profit on a fully diluted basis, earnings per share for Q1 2014 and Q1 2013 were 103.93 cents and 0.19 cents respectively. Net asset value per ordinary share was SGD4.06 for Q1 2014.
During the quarter in review, the group's hospitality division registered revenue of SGD52.3 million. Excluding the contribution from the two disposed China Hotels, hospitality revenue increased 4.9 per cent year-on-year.
Revenue generated from the group's property investment division increased by SGD16.9 million due to the inclusion of revenue from the Lippo Plaza property, which was acquired by OUE Commercial Real Estate Investment Trust in January 2014. The increase in revenue also came from contribution at the US Bank Tower and higher occupancy achieved by the remaining commercial properties of the group in Q1 2014.
Similarly, the sale of residential units for Twin Peaks contributed to the property development income, bringing in revenue of SGD9.4 million for Q1 2014.
Dr Stephen Riady, OUE's executive chairman says: "We are pleased with our results this quarter as we are now realising the returns from our portfolio of properties. With the refurbishment work in the retail mall at One Raffles Place near completion and asset enhancement works at OUE Downtown being on track, we are well positioned to benefit from further strengthening of our recurrent income streams."
"Together with our healthy cash balance of SGD864.6 million, we are well-placed to seize opportunities that will be value-enhancing for OUE's continuous growth.”
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