UOL Q2 profit down 55%, cautious over outlook

SINGAPORE — Property developer and landlord UOL yesterday reported second-quarter profit more than halved from the corresponding period a year earlier, largely due to fair value losses on the group’s investment properties.

For the three months ended June 30, net profit amounted to S$68.8 million, down 55 per cent from S$152.5 million in the second quarter last year, UOL said in an aftermarket filing with the Singapore Exchange. Fair value losses on investment properties including those of associated companies totalled S$14.6 million, reversing from fair value gains of S$53.3 million previously.

Revenue grew 6 per cent to S$363.5 million during the second quarter. The topline growth derived mainly from higher progressive recognition of revenue from ongoing property development projects, Riverbank@Fernvale, Seventy Saint Patrick’s and Botanique at Bartley, as well as new revenue from Principal Garden which was launched last October, UOL said. Property development revenue was up 14 per cent to $185.5 million.

Revenue from hotel operations has also improved with higher takings mainly from Pan Pacific Tianjin and ParkRoyal Yangon. Hotel revenue rose 3 per cent in the second quarter to S$101.1 million. Revenue from property investments inched up to S$55.1 million from S$54.9 million.

UOL warned that grey clouds continue to loom for the property sector in the months ahead. “With Britain’s decision to withdraw from the European Union, the global economic outlook remains uncertain. In Singapore, demand for private residential properties remains lacklustre and will continue to be affected by the various cooling measures,” it said. “Office rentals are under pressure given the looming supply coming onstream. Weak retail sales and competition from e-commerce will continue to impact retail rents. The hotel market in the Asia Pacific is expected to remain competitive given the uncertain macro-economic conditions.”

Before the aftermarket filing, UOL shares fell 0.2 per cent to S$5.84 each, compared to the 0.2 per cent gain in the benchmark Straits Times Index. UOL shares have fallen 6.4 per cent so far this year, giving it a market capitalisation of S$4.7 billion, Bloomberg data showed.