Strong sales from its core Singapore property development business were not enough to prevent a drop in full-year earnings at developer UOL Group.
A lower share of profits from joint venture companies and fair value losses on its investment properties helped send net profit for the 12 months to Dec 31 down 27 per cent to $287 million. This was despite a 13 per cent increase in revenue to $1.44 billion, which was largely driven by strong property sales.
Earnings per share fell from 49.4 cents in 2015 to 35.82 cents last year, while net asset value was $10.10 as at Dec 31, up from $9.91 a year earlier.
Revenue from property sales rose 27 per cent to $733.9 million.
UOL has declared a first and final dividend of 15 cents per ordinary share, unchanged from last year.
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AT A GLANCE
NET PROFIT: $287 million (-27 per cent)
REVENUE: $1.44 billion (+13 per cent)
FINAL DIVIDEND: 15 cents a share (Unchanged)
Despite property curbs and a tepid economic outlook, UOL pulled off good sales at condominium projects such as Botanique at Bartley. There are just eight out of 797 units left at the project, which will likely get its temporary occupation permit in the first quarter of 2019.
Deputy group chief executive Liam Wee Sin said at a briefing yesterday the market is on the upswing: "We see that sentiment has improved, especially in the last few months. This is very evident in our take-up."
However, he noted that some risks remain, including interest rate hikes. Whether property curbs will stay would be dependent on some market conditions, he added.
"I would like to think that if something different happens, such as a steep rise in interest rates, thereby negating cheap funds, I think there is some room for ABSD and cooling measures to be tweaked," he said, referring to the additional buyer's stamp duty.
Amid intense competition at government land sales, UOL turned to non-traditional sources - acquiring a freehold residential site at 45 Amber Road via private treaty, and purchasing a Potong Pasir residential site through a collective sale.
While it incurred a $26.7 million impairment charge for a hotel under development in London due to higher development costs, it is still keen on overseas assets. "We will continue to acquire investment properties, office and hospitality assets in key gateway cities that are yield accretive,"Mr Liam said.
