http://www.businesstimes.com.sg/arch...rnings-dive-63

Published May 12, 2012

UOL's Q1 earnings dive 63%

Pan Pacific Hotels, in which the group has 81.6% stake, posts 65% jump in Q1 profit

By Mindy Tan


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UOL says Archipelago (above), launched in December 2011, is now 66 per cent sold, while all 244 units of its Katong Regency project were snapped up within a week of launch in April

- FILE PHOTO

UOL Group posted a 63 per cent year-on-year drop in net profit to $84 million for the first quarter ended March 31, 2012.

Group revenue was 59 per cent lower at $297.7 million, largely due to a 75 per cent decline in revenue from property development to $153.2 million.

The adoption of the INT FRS 115 accounting standard last year resulted in the recognition of $349 million in revenue in Q1 2011 for units in Duchess Residences sold under the deferred payment scheme.

Furthermore, Breeze by the East received its Temporary Occupation Permit (TOP) in Q1 last year, while lower contributions from Meadow@Peirce were clocked, following the receipt of TOP in February 2012.

The reporting period saw a 52 per cent fall in share of profits from associated companies to $27.8 million.

But taxation fell 69 per cent to $14.6 million helped by lower deferred income tax.

During the quarter, revenue from property investments rose 7 per cent to $41.9 million while gross revenue from hotel ownership and operations rose 22 per cent to $96.8 million.

Separately, Pan Pacific Hotels Group Limited (PPHG) - in which UOL Group owns an 81.6 per cent stake - reported a 65 per cent jump in net profit to $17.3 million in Q1.

Revenue was 23 per cent higher at $96.6 million with the inclusion of revenue from Parkroyal Melbourne Airport (acquired in April 2011) and with higher contribution from the hotel in Myanmar.

Gwee Lian Kheng, UOL's group chief executive, said: "Our first-quarter results reflected a slowdown in new launches since last year and the completion of several projects. We are pleased that sales of recent property launches have picked up. All 244 units of our Katong Regency project were snapped up within a week of launch in April while Archipelago, launched earlier in December 2011, is now 66 per cent sold."

Mr Gwee said demand for new homes in the mass-market segment should remain stable, underpinned by high liquidity and low interest rates.

The group will replenish its landbank in Singapore and selectively acquire overseas sites.

Overseas, UOL is targeting to launch its apartment units at its mixed development, The Esplanade, in Tianjin towards the end of the current quarter.

In Singapore, it has obtained the Strata Titles Board order for the approval of the en bloc sale of St Patrick's Gardens estate.

The group is working towards launching the residential project in early 2013.

Q1 net tangible asset per ordinary share rose to $7.05 from $6.82. The group's gearing ratio was 0.33 as at end-March.

The counter fell six cents yesterday to close at $4.49.