UOL Q1 Net Slides On Lack Of One-Off Gain, Writeback

Source : The Business Times, May 15, 2008

Hotel Plaza's Q1 earnings surge 38% to $14.5m

UOL Group's net profit dropped 38 per cent to $50.5 million for the first quarter ended March 31 - from $81.5 million in the previous corresponding period.

The sharp drop was due to two factors: Q1 2007 included an exceptional gain of $37.1 million from the sale of Central Plaza and a $4.9 million writeback last year of deferred income tax after the corporate tax rate was reduced to 18 per cent.

Earnings per share fell to 5.38 cents from 9.57 cents. Net asset value per share was $4.97 as at March 31.

Stripping out one-time gains and tax expenses, profit was 30 per cent higher at $60.2 million.

For the first quarter, revenue rose 11 per cent to $161.7 million from $145.7 million on the back of better contributions from hotel operations in Singapore, Australia and Vietnam, as well as higher rental rates for its investment properties.

However, revenue from property development was slightly lower due to the absence of contributions from Twin Regency and Newton Suites, both completed last year.

UOL also benefited from higher profits from associated companies, including the progressive recognition of income from the sale of units in one-north residences and Le Marquis in Shanghai as well as profits from Marina Centre Holdings Pte Ltd and Aquamarina Hotel Pte Ltd.

The company said that financial market volatility and inflation 'have created uncertainties in the business and economic outlook' and that 'sentiments in the private residential market are likely to remain cautious while the increase in rental rates for office space is likely to be more moderate'.

It added that it was cautiously optimistic on the tourism sector in Singapore and most of the region.

UOL's listed hotel arm Hotel Plaza reported a 38 per cent rise in net profit to $14.5 million. Revenue was 16 per cent higher at $76.7 million and earnings per share fell to 2.42 cents from 2.64 cents because of a higher share base.

Hotel Plaza said better hotel performance and lower interest cost contributed to the increase in net profit. It added that performance of Sheraton Suzhou continued to be affected by increased competition while the operating conditions remain difficult for Parkroyal Yangon.

UOL shares closed trading yesterday unchanged at $3.84 while Hotel Plaza shares eased three cents to $1.85.