OUE sees 54.6% fall in first-half profit on lower fair value of investments
Sign up now: Get ST's newsletters delivered to your inbox
The launch of the Orchard Wing at Hilton Singapore Orchard this year boosted revenue.
PHOTO: BT FILE
Yong Jun Yuan
Follow topic:
SINGAPORE - Property developer OUE reported a 54.6 per cent decrease in net profit to $40.2 million for the six months ended June 30, from $88.7 million in the corresponding period a year ago.
The decline in net profit came despite a 53.3 per cent rise in revenue to $304.5 million, from $198.7 million a year ago.
In a bourse filing on Monday, the group said that the year-on-year decline in net profit was mainly due to a lower share of results of equity-accounted investees; higher finance expenses; a lower net change in fair value of investments designated at fair value through profit or loss; and a lower net change in fair value of investment properties.
Still, the group saw higher revenue contribution across all its business segments.
Its real estate segment saw revenue grow 46 per cent to $205 million as all three divisions – investment properties, development properties and hospitality – under the segment grew.
Revenue from the investment properties division rose 12.7 per cent to $101.3 million, while revenue from the development properties division surged to $8 million from $200,000 due to the completion of the sale of three units at OUE Twin Peaks condominium.
The group added that its core Central Business District Grade A office vacancy rate in Singapore stood at 4 per cent amid a rise in office rents. “The demand-supply dynamics will likely keep rents and occupancies stable for the rest of the year,” it said.
However, OUE cautioned that the real estate sector in China is expected to remain sluggish despite policy support from the government.
The return of tourism and the meetings, incentives, conventions and exhibitions, or Mice, sector led revenue from the hospitality division to rise by almost twofold to $95.8 million.
The group added that the launch of the Orchard Wing at Hilton Singapore Orchard in 2023 drove the revenue increase, and that it expects the tourism sector to recover to pre-pandemic levels in 2024.
Meanwhile, revenue from OUE’s healthcare segment grew 79.1 per cent to $79.8 million.
This was due to the first full-period contribution from First Real Estate Investment Trust – which has been accounted for as a subsidiary since March 1, 2022 – and a medical partnership with three medical specialist groups in Singapore that began in June 30, 2022.
The group has declared an interim dividend of one cent per share, unchanged from the same period a year earlier. It is payable on Sept 28, after books close on Sept 15.
OUE shares closed flat at $1.06 on Tuesday. THE BUSINESS TIMES
