http://www.businesstimes.com.sg/comp...up-oue-results

Twin Peaks sales, divestment prop up OUE results

Net profit still down 7.7%; revenue boosted by divestment of Crowne Plaza Changi Airport Extension

Saturday, February 18, 2017

by Cai Haoxiang
[email protected]
@HaoxiangCaiBT


BRISK condominium sales and a hotel divestment propelled property developer OUE Limited to a net profit of S$144.4 million for its financial year ended Dec 31, 2016.

However, net profit was 7.7 per cent lower than the S$156.4 million recorded in 2015, due to higher finance costs and net fair value losses on investment properties.

Revenue had more than doubled to S$884.2 million from S$431.5 million a year ago. This was in part due to nearly S$200 million recorded from the sale of the OUE Twin Peaks condominium in Orchard.

The condo was notable for being marketed under a deferred payment scheme. Buyers can defer obtaining a full home loan, currently affected by debt servicing rules. OUE said some 348 units out of the 462-unit development had been sold by end-2016, or three out of every four.

But it noted that revenue for units sold under deferred payment schemes will not be recognised until the completion of the sale of the unit, which can be two years from now.

Another sizeable chunk of revenue - S$205 million - came from divesting Crowne Plaza Changi Airport Extension to OUE Hospitality Reit (real estate investment trust). This generated a S$68.7 million net gain.

Higher revenue was also the result of the consolidation of revenue from the One Raffles Place office tower after a previous acquisition of additional interest.

However, hospitality segment revenue dipped slightly due to lower room sales from Mandarin Orchard Singapore.

Looking ahead, the company said Singapore's tourism industry will face headwinds from global economic uncertainties and higher supply.

In the office rental space, vacancy rates are expected to rise as occupiers vacate to new pre-committed spaces in the coming quarters.

Asset enhancement initiatives continue at the OUE Downtown office. The opening of Downtown Gallery shopping mall and Oakwood Premier OUE Singapore, the firm's new 268-unit serviced residence, is expected to be by the second quarter of the year.

The company did not carve out its fourth-quarter results from its full-year results. A 2-cent final dividend was declared, bringing total cash dividend for the year to 5 cents, unchanged from a year ago. Net asset value at end-2016 was S$4.45 a share, up from S$4.35 a year ago.

The company said that Bernard Lim Eng Chuan, 49, OUE senior vice-president of finance, has been appointed as chief financial officer.

On Thursday, it also launched a takeover for Catalist-listed nursing home owner International Healthway Corporation.

OUE closed at S$1.95, up half a cent, before results were out.