UOL Q2 Profit Dives As Fair-Value Gains Fall

Source : The Business Times, August 13, 2008

Its listed subsidiary Hotel Plaza posts 5% rise in net profit to $16.3m

UOL Group's second-quarter net profit fell 49 per cent to $145 million, from $286.3 million a year ago, as the property group saw lower fair-value gains from its investment properties.

Selling well: Sales at UOL's projects, including Nassim Park Residences, launched in Q2 exceed expectations

Revenue for the three months ended June 30, 2008 rose 4 per cent to $209.3 million, from $201.6 million in Q2 2007.

The increase in revenue came largely from UOL's hotel operations, with hotels in Singapore, Australia and Vietnam performing better.

Revenue from property investments also improved due to higher average rental and occupancy rates in investment properties, UOL said.

Earnings per share for Q2 2008 fell to 18.21 cents, from 36.01 cents a year ago.

For the first half of 2008, UOL's net profit attributable to equity-holders fell 48 per cent to $187.8 million. Turnover for the six months rose 7 per cent to $371.1 million.

UOL's listed subsidiary Hotel Plaza posted a net profit of $16.3 million for the second quarter - 5 per cent up from the year-ago period's $15.5 million.

Revenue rose 16 per cent to $79.9 million, from $69.2 million a year ago, as the company's hotels did better.

Earnings per share fell to 2.71 cents, from 3.89 cents a year ago.

For H1 2008, Hotel Plaza's net profit rose 18 per cent to $30.8 million. Revenue for the six months rose 16 per cent to $156.6 million.

Commenting on its group's results, UOL observed that the sub-prime crisis, tight credit environment and global inflation had led to a slowdown in global economic growth.

UOL said the buying sentiment in the Singapore residential property market is likely to remain soft and cautious. It, however, said that it launched three projects in the second quarter and sales 'exceeded expectations'.

In Singapore, Nassim Park Residences is over 60 per cent sold with the latest median price at around $3,000 per square foot (psf).

Breeze by the East, a boutique 88-unit project along Upper East Coast, is 50 per cent sold with the latest median price at around $979 psf.

And in Malaysia, Panorama, a freehold 223-unit luxury condominium in Kuala Lumpur, is more than 90 per cent sold at an average price of about RM980 (S$414.8) psf.

Both UOL and Hotel Plaza are also cautiously optimistic that the demand for hotel rooms will remain fairly strong in Singapore and the Asia-Pacific region, even with the weaker economic outlook.

UOL gained five cents to close at $3.26 yesterday. Hotel Plaza lost three cents to close at a 52-week low of $1.49.