UOL full-year profit surges to $424.2m

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Published February 24, 2010

UOL full-year profit surges to $424.2m

At least five home projects this year could bring gross sales proceeds of about $800m

By KALPANA RASHIWALA


UOL Group, whose net profit nearly trebled to $424.2 million, said that the completion of at least five Singapore residential projects this year could translate to gross sales proceeds of about $800 million. The sum will also include progressive recognition on other ongoing residential projects.

Revealing this yesterday, group chief executive Gwee Lian Kheng said that this would enable the group to reduce borrowings and facilitate its acquisition of development sites. This year, the group plans to launch three condominiums in Singapore totalling over 1,000 units.

Two are slated for release in the second quarter - a 616-unit project at Dakota Crescent and a 172-unit development at Toh Tuck Road. A 350-unit condo in the Spottiswoode area could be released in the second half of this year. Over in China, the group hopes to launch the residential component of a mixed development project in Tianjin, along the first ring road fronting Hai He River, by year-end. The project comprises 538 apartments, a 328-room hotel, 17,600 square metres of offices and 9,800 sqm of retail space. The five projects slated for completion this year are One Amber, The Regency at Tiong Bahru, Southbank in the Beach Road area, Duchess Residences and Breeze by the East. Nassim Park Residences may also be finished by year's end.

UOL's 188 per cent jump in net profit for the year ended Dec 31, 2009 to $424.2 million from $147.2 million for 2008 was achieved on the back of higher sales of development properties, rentals from investment properties, share of profits of associated companies and negative goodwill of $281.1 million from the acquisition of shares in United Industrial Corporation.

The improved bottom line was despite booking $184.8 million fair value losses on investment properties, including those of associated companies, mostly UIC, but also Marina Centre Holdings. UOL's own properties that were written down were mostly office space in buildings such as Odeon Towers, Novena Square, United Square and Faber House. In FY2008, fair value losses attributable to equity-holders were at a lower $74 million.

The improvement in share of profit of associated companies was due to UIC becoming a 32 per cent associated company last year, as well as higher contribution from Nassim Park Residences.

Group revenue increased 12 per cent to $1 billion. Meanwhile, UOL's hotels, resorts and serviced suites arm Pan Pacific Hotels Group (formerly known as Hotel Plaza) saw a 207 per cent jump in full-year net profit to $39.3 million. This was achieved despite a 9 per cent slide in turnover to $287.8 million and an 18 per cent fall in revenue per available room. The improved bottom line was due to the absence of impairment charge (FY2008: $37 million) and an $8.2 million fall in fair value loss adjustments.

Pan Pacific said that the decrease in revenue was due largely to weaker performance from the group's hotels in Singapore, Australia and Vietnam and partly offset by the inclusion of revenue from hotel management services following the acquisition of Pan Pacific operations in October 2008.

New facilities opening this year include Pan Pacific Nirwana Bali Resort (owned by PT Bali Nirwana Resort) and Parkroyal Serviced Suites Kuala Lumpur (owned by UOL).

Pan Pacific is recommending a first and final dividend of 3.5 cents per share, down from the four-cent dividend previously. UOL shareholders will receive a first and final dividend of 10 cents per share, compared with 7.5 cents in the preceding year.

UOL's net debt to equity ratio rose from 0.42 time at end-2008 to 0.43 time at end-2009. Its net asset value per share increased from $4.26 to $5.29 over the same period.

On the Singapore government's measures last Friday to cool the residential property market, UOL's chief operating officer Liam Wee Sin said: 'We are not particularly concerned about the measures' although there could be an immediate knee-jerk reaction.