UOL posts 48% increase in 2Q earnings to $195 mil on higher fair value gains

SINGAPORE (Aug 8): UOL Group recorded a 48% jump in 2Q19 earnings to $195.4 million, compared to $131.9 million in 2Q18.

This brings 1H19 earnings to $267.7 million, 29% higher than $207.2 million in 1H18.

Revenue for 2Q19 was 20% lower at $512.3 million from $637.9 million a year ago, mainly due to lower progressive recognition of revenue from development projects, Principal Garden, The Clement Canopy and Botanique at Bartley which obtained TOP in Dec 2018, March and April respectively.

Hotel operations also recorded a 3% decline mainly from lower occupancies and room rates at Marina Mandarin and ParkRoyal Darling Harbour and ongoing refurbishments at ParkRoyal on Kitchener Road.

This was partially offset by higher revenue contribution from property investments, mainly UIC Building and newly acquired 72 Christie Street in Sydney; higher revenue contribution from the management services and technologies segment; and increase in dividend income from quoted investments in UOB and Haw Par.

As cost of sales decreased by 31% y-o-y to $261.1 million, gross profit for 2Q19 came in at $251.2 million, 4% lower than $260.9 million last year.

Expenses for 2Q19 came in at some $116 million.

The group saw a near trebling of fair value gains on its investment properties to $181.9 million from $64.4 million a year ago.

As at end June, cash and cash equivalents stood at $609.4 million.

Liam Wee Sin, group chief executive of UOL, says, “In the first half of 2019, the take-up for new projects was 6% higher than the preceding year notwithstanding the cooling measures introduced on 6 July 2018. We see resilience in the market and potentially further upside for selected projects with strong location and product attributes.”

“Riding on the strong sales of Amber45 and The Tre Ver, both of which are about 80% sold, we are targeting to launch our Avenue South Residence by the end of this month. The 56-storey project is next to the exciting Greater Southern Waterfront, an extension of our city and a gateway to future live, work and play,” adds Liam.

On the outlook for the residential property market, UOL expects prices for new private homes to remain relatively stable despite the economic slowdown in Singapore.

Shares in UOL closed 4 cents higher at $7.20 on Thursday.