Property company UOL has sunk into the red with net losses of $82.1 million for its first half ended June 30, compared with a net profit of $267.7 million a year ago.
This was due mainly to fair value losses on its investment properties, including retail malls and serviced suites which were severely affected by the Covid-19 pandemic, it said.
Excluding fair value losses, the group's operations remained in the black, with group pre-tax profit totalling $196.8 million, down 30 per cent from $282.8 million in the first half of FY2019.
The group's investment properties were independently valued at a combined $11.3 billion as at end-June, representing a $263.8 million or 2 per cent decline from the value as at end-December last year.
The decline in value was observed across all of the group's commercial properties and serviced suites, and reflected the impact of the Covid-19 pandemic on the performance of these properties, it said.
The earnings decline also came on the back of a 28 per cent drop in revenue to $908.2 million, with the biggest hit seen in the hotel ownership and operations segment, where revenue fell 57 per cent to $136.8 million.
This was due to the group's hotels being affected by the lockdowns and travel restrictions imposed by governments around the world, with Singapore and Australia hotels seeing the largest decline.
It was compounded by the closure of Parkroyal Collection Marina Bay and Parkroyal Kuala Lumpur for major refurbishments and the absence of revenue from Pan Pacific Suzhou, which was sold last December.
Revenue from the property development segment was 29 per cent lower at $379.7 million, as the revenue from Park Eleven in Shanghai for the first half of last year was significantly higher due to the large number of units handed over in the first quarter of last year.
The decline was offset partially by higher progressive revenue recognition from ongoing projects in Singapore, mainly Avenue South Residence in Silat Avenue and The Tre Ver in Potong Pasir.
Revenue from its property investments fell by 14 per cent to $238.8 million, due mainly to rental rebates of $26.3 million extended to tenants affected by the Covid-19 pandemic.
Shares of UOL added half a Singapore cent or 0.8 per cent to $6.64 yesterday.
THE BUSINESS TIMES
