SINGAPORE - Hotel group and developer OUE said its third quarter net profit soared to S$107.6 million from S$15 million in the same period last year, lifted by a big one-off gain.
The results were achieved on the back of an increase in revenue for the three months to Sept 30 by more than four times to S$419.1 million, from S$99 million previously.
The robust performance was underpinned mainly by contribution from the property development and property investments divisions.
For the property development division, the continued sales and marketing efforts of units at OUE Twin Peaks drove sales up, resulting in revenue contribution of S$89.2 million. The revenue for the quarter also included contribution from the divestment of Crowne Plaza Changi Airport Extension (CPEX) to OUE Hospitality Real Estate Investment Trust on Aug 1, for S$205 million.
The net gain on divestment of CPEX was about S$66.7 million, after taking into account development and related costs of the project.
For the property investments division, revenue contribution rose 50.1 per cent to S$65.6 million, mainly due to the consolidation of revenue from One Raffles Place following the acquisition of additional interests in OUB Centre in October 2015, which was previously equity-accounted.
Revenue for the hospitality division remained in line at S$52.4 million.
The newly operational OUE Skyspace at US Bank Tower in Los Angeles also contributed positively to the group's revenue. Officially opened in June, OUE Skyspace is the observation deck at US Bank Tower that offers visitors exhilarating, 360-degree views of Los Angeles from nearly 1,000 feet above ground.
In addition to its strong operating performance, OUE also benefitted from other gains of almost S$29 million, largely from the reversal of impairment losses of S$15.1 million from the units sold at OUE Twin Peaks.
Earnings per share swelled to 11.92 cents from 1.65 cents previously while net asset value per share rose to S$4.41 compared to S$4.35 as at Dec 31.
Looking forward, OUE said it remain focused on its asset enhancement initiatives at OUE Downtown and active lease management at US Bank Tower.
Last month, the group signed a management agreement with Oakwood Asia Pacific to operate the new serviced residences, Oakwood Premier OUE Singapore, at OUE Downtown that is slated to open by mid-2017.
As at Sept 30, OUE Downtown and US Bank Tower had committed office occupancy rates of 87 per cent and 74.3 per cent, respectively.
As at the end of the quarter, a total of 268 units in OUE Twin Peaks were sold through active marketing activities, and the group will continue to drive sales of the project.
"With asset enhancement initiatives in the retail mall and serviced apartments at OUE Downtown near completion, we are well positioned to benefit from the further strengthening of our recurrent income streams," said OUE executive chairman Stephen Riady.