Revenue jumps 61% to $268m; subsidiary Hotel Plaza's Q3 net down 4% to $13.5m
BUCKING the trend of falling profits at many Singapore-listed property developers, UOL Group yesterday reported that its third-quarter net profit rose 14 per cent to $73.5 million, from $64.5 million a year ago.
Slowdown effect: Hotel Plaza expects revenue for its hotels in Singapore and the region to decline in futureGroup revenue for the third quarter ended Sept 30 jumped 61 per cent to $267.9 million - up from $166.7 million for the corresponding three months of 2007.
The increase was largely from the progressive recognition of revenues from the sale of homes, including those in Panorama and Breeze by the East which were launched earlier this year.
Revenue from property investments also improved due to higher average rental rates for the company's investment properties and contribution from the Pan Pacific Serviced Suites, which opened in April 2008. Since its opening, the five-star serviced suites had improved its occupancy to almost 85 per cent.
Earnings per share for Q3 2008 rose to 9.24 cents, from 8.11 cents a year ago.
For the first nine months of 2008, UOL's net profit fell 39 per cent to $261.4 million - from $426.8 million in 2007 - mainly due to lower fair-value gain on investment properties and absence of gain on sale of an investment property. Revenue for the first three quarters rose 24 per cent to $638.9 million, from $514.1 million for the same period in 2007.
UOL sounded a warning as it looked ahead. The tightening of credit and the weak share market will affect buying sentiment in the Singapore residential property market, UOL said.
Demand for office space will also be affected as companies scale down their activities and rental rates are expected to soften, the company added.
Separately, UOL's listed subsidiary Hotel Plaza said that its net profit decreased marginally by 4 per cent to $13.5 million, from Q3 2007's $14.1 million, as the company was hit by higher operating expenses, among other things.
Hotel Plaza's Q3 revenue rose slightly by 2 per cent to $77.7 million from $76.3 million for the year-ago period. The increase was due largely to better performance from the company's Singapore hotels but was offset by the weaker performance of hotels in Malaysia and China.
Earnings per share fell to 2.25 cents, from 3.52 cents a year ago.
For the nine months ended Sept 30, Hotel Plaza's net profit rose 10 per cent to $44.3 million, from $40.2 million a year ago. Revenue rose 11 per cent to $234.3 million, from $211.7 million in 2007.
Hotel Plaza expects revenue for its hotels in Singapore and the region to decline in future. 'The slowing global economy will likely lead to a decline in business and leisure travel which will in turn affect the hotel industry in Singapore and the Asia-Pacific region,' the company said.
UOL gained two cents to close at $1.92 yesterday. Hotel Plaza gained one cent to close at $1.30.
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