Property and hotel group OUE recorded a second-quarter net loss of $16.3 million yesterday, owing to fair value losses on its investments in a mutual fund.
The firm said that the net loss - reversing a net profit of $4.4 million a year earlier- was a result of other losses of $20.5 million, mainly owing to those fair value losses.
Revenue for the three months to June 30 dipped 4.5 per cent to $95.7 million.
OUE recorded strong performance contribution from the property investment division, where revenue grew 14.6 per cent to $42.7 million.
This was mainly owing to higher occupancy rates at the US Bank Tower in Los Angeles.
AT A GLANCE
NET LOSS: $16.3 million (comparison not meaningful)
REVENUE: $95.7 million (-4.5%)
DIVIDENDS PER SHARE: Four cents (+300%)
However, this was partly offset by lower contribution from the hospitality and property development divisions, dragging down revenue.
Lower international visitor arrivals into Singapore hurt revenue from the hospitality division, which fell 5.4 per cent to $46.6 million.
Sales at OUE's sole residential project, OUE Twin Peaks, remained subdued, said the firm. Turnover from the property development division dived 69.7 per cent to $3.3 million.
Earnings before interest and tax was $33.3 million, up from $32.8 million, said OUE.
Excluding fair value losses - non-cash items - the core business and operations continued to be profitable, with attributable profits of $4.3 million, it said.
OUE's balance sheet is also healthy as cash and cash equivalents rose to $299.8 million from $162 million a year ago.
This was mainly owing to proceeds from the divestment of Crowne Plaza Changi Airport to OUE Hospitality Real Estate Investment Trust.
Net profit for the six months to June 30 fell 93.6 per cent to $60.9 million, while revenue slipped 1.7 per cent to $203.6 million from a year earlier.
Quarterly loss per share was 1.79 cents, compared to earnings per share of 0.49 cent previously, while net asset value per share was $4.30, up from $4.23 as at Dec 31.
The firm said that it is focused on revamps at OUE Downtown and US Bank Tower, as well as active lease management.
OUE Downtown has a committed occupancy rate of 90.9 per cent, while US Bank Tower has 80.1 per cent, as at June 30.
OUE added that the 10-storey extension of Crowne Plaza Changi Airport is slated to be completed by June next year .
Despite cautious headwinds in the high-end residential market, the firm said it will continue to drive sales at OUE Twin Peaks.
Dr Stephen Riady, OUE's executive chairman, said: "We are pleased to share with our shareholders the value unlocked on Crowne Plaza Changi Airport Hotel via a special dividend."
OUE has proposed an interim dividend of one cent and a special dividend of three cents per share, both tax-exempt, to be paid on Oct 15.
He added: "We will also actively pursue value-creating opportunity that will strengthen our recurring income base."
OUE shares closed one cent lower at $1.85 yesterday.