Property and hospitality group OUE has suffered a steep fall in full-year net profit, as Twin Peaks continued to impair earnings.
The poorly sold residential project incurred an impairment loss of $23.2 million last year, following the $105 million loss recognised in 2014. This offset a modest rise in last year's revenue on the back of stronger property investment returns.
Net profit for the year ended Dec 31 slumped 85.7 per cent year-on- year to $156.4 million.
Aside from the impairment losses, the profit drop was also due to a higher bottom line in 2014, which was boosted partly by a one-off gain from the disposal of Mandarin Orchard Singapore and Mandarin Gallery to OUE H-Reit.
Full-year revenue rose 3.6 per cent year-on-year to $431.5 million. This included a $35.6 million rise in property investment revenue, "due to consolidation of revenue of One Raffles Place following the acquisition of additional interests in OUB Centre in October 2015", the company announced yesterday.
Hospitality income slid 3 per cent to $204.4 million, on lower room revenue from the group's hotels.
AT A GLANCE
2015 REVENUE: $431.5 million (+3.6%)
NET PROFIT: $156.4 million (-85.7%)
FINAL DIVIDEND: one cent a share (unchanged)
Earnings per share for 2015 was 17.23 cents, down from 120.24 cents a year earlier. Net asset value was $4.35 per share as at Dec 31, up from $4.23 a year earlier.
The company's directors recommend a final cash dividend of one cent a share, unchanged from 2014.
Looking ahead, OUE will focus on its asset enhancement initiatives and active lease management to drive earnings in a challenging market, it said. By the end of this year, it will complete the enhancement of OUE Downtown. The mixed-use development has a committed office occupancy rate of 91 per cent.
The US Bank Tower in Los Angeles also has a committed commercial occupancy rate of almost 74.7 per cent, while the construction of a new observation deck there is set to be completed this year.
Meanwhile, the construction of Crowne Plaza Changi Airport's 10-storey extension is also set for completion in June.