SINGAPORE - Developer UOL Group's second quarter net profit halved to $211.7 million from $431.4 million, mainly due to a sharp fall on fair value gains.
Fair value gains on investment properties, including those of associated companies, dived by 64 per cent to $121.2 million.
Revenue for the three months to June 30 slumped by 30 per cent to $213.6 million.
Revenue from property development fell 73 per cent to $36.6 million.
This was attributed mainly to a decline in revenue from the sale of development properties at Waterbank at Dakota and Spottiswoode Residences, which were completed in May and December 2013, respectively.
Revenue from all other segments registered modest growth, with higher contributions mainly from Parkroyal on Beach Road, Parkroyal on Pickering and the Pan Pacific Serviced Suites Beach Road, which opened in May 2013.
Gross profit margin was higher at 55 per cent compared to 49 per cent in the previous corresponding period, due mainly to lower revenue contribution from property development which has a higher cost margin.
The increase in marketing and distribution expenses of $1.4 million was attributed mainly to advertising and showflat expenses for the sales of Riverbank@Fernvale, which was launched in February.
Share of profit from associated and joint venture companies rose 56 per cent to $38.4 million, due mainly to higher contributions from Pan Pacific Singapore and the Archipelago and Thomson Three projects.
Group expenses fell 10 per cent to $55.9 million.
This was due to a 59 per cent fall in currency exchange losses amounting to $3.1 million in the current quarter, as compared with $7.5 million in 2013.
Quarterly earnings per share shrank to 27.45 cents from 56.03 cents previously while net asset value per share firmed to $9.15 compared to $8.77 as at Dec 31.
"In view of the declining residential property prices and the record number of newly completed private dwellings from now till 2016, we expect the residential property market to remain subdued for a while," said UOL group chief executive Gwee Lian Kheng.
"Despite the rising geopolitical tensions that could affect travel pattern in the near term, we are still positive about the long-term prospect of the hotel industry. We will continue to seek out new opportunities to expand into strategic gateway cities."
UOL plans to launch Seventy St Patrick's and its Upper Paya Lebar project in the later part of the year and 2015, respectively.