Developer and hotelier UOL Group said the slow property market has depressed fair value gains of its investment properties, driving down its second-quarter earnings.
Taking into account lower fair value gains, the firm said yesterday that net profit for the period fell 28 per cent to $152.5 million.
Revenue for the three months to June 30 soared 60 per cent from a year earlier to $342.2 million.
The firm said contributions from the mixed-use Katong Regency at Tanjong Katong Road, 555-unit Riverbank@Fernvale and 186-unit freehold Seventy Saint Patrick's in East Coast boosted core earnings.
Attributable fair value gains from investment properties, including those of associated companies, slumped 56 per cent to $53.3 million. Profit before fair value and other gains and income tax rose 9 per cent to $114.9 million.
AT A GLANCE
REVENUE: $342.2 million (+60%)
NET PROFIT: $152.5 million (-28%)
Turnover from property development rocketed 343 per cent to $162.3 million, owing mainly to progressive recognition of revenue from sales of development projects.
Revenue from property investments grew 15 per cent to $54.9 million, owing to higher contributions from OneKM mall at Tanjong Katong Road which opened in the fourth quarter of last year.
Revenue from hotel ownership and operations dipped six per cent to $98.6 million, mainly because of lower contributions from Pan Pacific Perth, Parkroyal Kuala Lumpur and Parkroyal Yangon.
Group expenses rose 17 per cent to $66.3 million for the quarter.
Marketing and distribution expenses rose 77 per cent to $18.2 million, owing to the launch of Botanique at Bartley in April, the ongoing sales of Seventy Saint Patrick's, and expenses for OneKM and Pan Pacific Tianjin, which both opened in the fourth quarter of last year.
Administrative expenses rose 8 per cent to $20 million, while other operating expenses rose 11 per cent to $20.6 million because of these openings, and higher maintenance contributions for Novena Square.
Finance expenses fell 18 per cent to $7.4 million because of currency exchange gains.
For the six months to June 30, net profit slid 32 per cent to $226.7 million, while revenue inched down 7 per cent to $580.5 million.
Quarterly earnings per share shrank to 19.36 cents from 27.45 cents previously, while net asset value per share firmed to $9.87, compared with $9.71 as at Dec 31.
Group chief executive Gwee Lian Kheng said: "Our core earnings from property development remained strong in the second quarter despite sluggishness in the residential market. The encouraging sales from Botanique at Bartley have shown that a niche development can still attract buyers."
The firm also announced yesterday that Mr Liam Wee Sin, 56, UOL's president of property, was promoted to deputy group chief executive.
UOL shares closed 17 cents lower at $6.47 yesterday,