http://www.straitstimes.com/Money/St...ry_769256.html

OUE's full-year earnings fall 57% but revenue rises

Published on Feb 22, 2012

By Esther Teo, Property Reporter


EARNINGS at property firm Overseas Union Enterprise (OUE) plunged 57 per cent to $335.7 million for the year, partly due to the absence of fair value gains.

However, revenue for the 12 months ended Dec 31 increased 54 per cent to $332.4 million on the back of growth in the hospitality and property investment divisions.

OUE recorded other gains - mainly fair value gains on its investment properties and reversal of impairment losses on its China hotels' property, plant and equipment - of $265.5 million for the full year. This was down sharply from $771.8 million in 2010.

The firm's hospitality division enjoyed improved performance across all hotels, including the Crowne Plaza Changi Airport hotel acquired last July.

This allowed the hospitality division to record a 25 per cent year-on-year increase in income to $215.5 million, accounting for 65 per cent of overall revenue.

Income from property investments surged 177.8 per cent to $106.9 million, mainly due to full-year contributions from DBS Building Towers One and Two and OUE Bayfront.

Its development property income recorded revenue of $7.6 million from the sale of units at Twin Peaks in Leonie Hill, which is under construction.

Earnings per share for the year fell from 79 cents a year earlier to 34 cents, while net asset value per share was $3.21, up from $2.86 last year.

OUE also sounded a note of caution in a statement released yesterday.

It said prices and sales volume of private residential properties will continue to moderate in the light of last December's cooling measures, but the firm will continue to drive sales at Twin Peaks.

Global economic conditions are also expected to remain subdued and this may have an impact on Asia, a key market for Singapore tourism, which may affect visitor arrivals and the hospitality sector, the firm added.

'In the face of economic uncertainties around the world in 2012, we remain committed to identifying opportunities and will continue to maximise the value of our portfolio with our asset enhancement model,' OUE executive chairman Stephen Riady said.

A special dividend of eight cents per share has been recommended in addition to a final dividend of three cents per share. This is up from the final dividend of two cents a share declared in the previous year.

OUE shares closed three cents down at $2.50 yesterday.