UOL Q1 profit down 8%; group launching Amber45 this weekend at S$2,200 psf

Sat, May 12, 2018

Lynette Khoo


UOL Group, which is launching its freehold residential project Amber45 this weekend at an average price of above S$2,200 per square foot (psf), said its net profit for the first quarter ended March 31 fell 8 per cent to S$73.82 million.

Its net profit would have been higher if not for the S$7.6 million amortisation and depreciation of fair value uplifts in the first quarter in respect of the consolidation of United Industrial Corporation (UIC) as a subsidiary from Sept 1, 2017, it added.

Pan Pacific Orchard also took a S$6.6 million accelerated depreciation charge following the decision to cease operations in the second quarter of 2018 for redevelopment.

Group revenue surged 89 per cent to S$661 million on higher contributions from its three core business segments - property development, property investments, and hotel operations.

The consolidation of UIC group and the associated and joint-venture companies of UOL Group and UIC Group added S$316.2 million to UOL's top line during the first three months of the financial year.

Excluding the effects of the UIC consolidation, revenue from property development fell 7 per cent or S$12.1 million with the completion of Riverbank@Fernvale in March 2017, while hotel ownership and operations improved 9 per cent or S$9 million due mainly to maiden contribution from Pan Pacific Melbourne which was acquired last July. Also, property investments fell 4 per cent or S$2.3 million as a result of lower contribution from OneKM mall.

As of Friday, UOL's interest in UIC has crept up to 49.85 per cent, after acquiring 60,300 shares on Friday in the open market at around S$3.25 apiece.

UOL said group expenses rose 67 per cent to S$104 million following the UIC consolidation and higher borrowings for the construction of One Bishopsgate Plaza in London and the acquisition of Pan Pacific Melbourne.

Its marketing and distribution expenses increased 34 per cent to S$21.4 million, while administrative expenses rose 55 per cent to S$30.1 million.

Expenses and other operating expenses jumped 52 per cent and 114 per cent to S$12.2 million and S$40.2 million respectively.

UOL noted that prices of private residential properties in Singapore are trending up, and that office rents could continue their upward momentum on steady demand and decreasing supply. Retail rents, however, could remain under pressure from e-commerce.

The 139 units at Amber45, a freehold project in East Coast that sits on a site acquired by private treaty from a single owner, have guide prices starting from S$1.45 million for a two-bedroom unit of 614 sq ft; S$2.5 million for a three-bedroom unit of 1,130 sq ft; and S$3 million for a four-bedroom unit of 1,346 sq ft.

UOL's 729-unit waterfront development on the former Raintree Gardens site, The Tre Ver, a 50-50 joint venture with UIC, is expected to be launched in the second half of this year.

Meanwhile, UOL has completed the en bloc purchase of Nanak Mansions in Meyer Road and is targeting to launch the project next year.

In China, UOL is looking to launch the second phase of Park Eleven, a mixed development in Shanghai, in the second half of this year. Its UK project One Bishopsgate Plaza, which has 160 residential units and 237 hotel rooms, is also slated for launch in the same period.

Shares of UOL closed 1.4 per cent higher on Friday at S$8.72.