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UOL Q1 profit up on higher property development revenue

Group plans to launch Shanghai project this quarter and Clementi condo next year

By Kalpana Rashiwala

[email protected]

@KalpanaBT

May 13, 2016


UOL Group, which is involved in property and hotels, has posted a 4 per cent increase in net profit to S$77.08 million for the first quarter ended March 31, 2016 - due mainly to higher revenue contribution from ongoing as well as new property development projects.

Revenue rose 39 per cent to S$330.12 million, mainly because of higher progressive recognition of revenue from on-going property development projects, Riverbank@Fernvale and Seventy Saint Patrick's, as well as revenue from new projects, Botanique at Bartley and Principal Garden which were launched in March and October 2015 respectively.

Share of profit from associated and joint-venture companies slipped 12 per cent to S$34.1 million, mainly due to the absence of contribution from the Archipelago condo project next to Bedok Reservoir Park. This development, a joint venture with United Industrial Corporation, was completed in September last year.

UOL noted that the outlook for the Singapore residential property market is expected to remain sluggish. Rents for office space will continue to face pressure with a large supply coming in the second half of this year, while retail rents will be subdued as retailers consolidate their operations in an increasingly challenging market. The hospitality business in Asia Pacific is expected to remain competitive given weak global economic growth.

UOL's earnings per share inched up to 9.68 Singapore cents in Q1 FY2016 from 9.43 Singapore cents in Q1 FY2015. Net asset value per share rose to S$9.95 as at end-March 2016 from S$9.91 as at end-December 2015.

The group had cash and bank balances of S$269.01 million as at March 31, 2016, down 3 per cent from S$276.40 million as at Dec 31, 2015.

Its gearing ratio remained unchanged at 0.27.

The counter closed six Singapore cents higher at S$5.67 on Thursday.

The group plans to launch its Park Eleven project in Shanghai this quarter. Located within the Changfeng Ecological Business Park, the development will have 398 residential units. UOL has a 40 per cent stake in the project.

In Bishopsgate, London, the group targets to launch next year the residential component of a mixed use project, which will also have a hotel and retail space.

In Singapore, UOL will also launch next year a 505-unit condo in Clementi Avenue 1. It has 50 per cent stake in the project.