OUE posts 2Q18 net profit fell nearly 25 percent on absence of property development revenue

Singapore one dollar bill

OUE reported on Friday that its second quarter net profit fell 24.6 percent on-year to S$5.3 million on higher finance expenses and as revenue declined on the absence of property development income and on lower healthcare segment revenue.

That caused revenue in the quarter to fall 19.6 percent on-year to S$150.7 million, OUE said in a filing to SGX after the market close on Friday.

“There was no contribution from the development property division in the current quarter as there was no completion of sale of units. The revenue relating to the units sold under deferred payment schemes are deferred until completion of the sale of the unit although non-refundable deposits were collected,” it said.

In the healthcare segment, revenue fell 15.3 percent on-year to S$9.5 million, it said. The contribution from OUE Lippo Healthcare fell mainly due to lower revenue from operations in China, it said. The contribution from the nursing facilities in Japan remained stable, but reported revenue declined due to the weakening of the Japanese yen in the second quarter, OUE added.

The investment property division’s revenue increased 4.2 percent on-year to S$69.8 million, on the full quarter contribution from Downtown Gallery, which opened in May 2017, OUE said.

In the hospitality division, revenue rose 11.1 percent on-year in the quarter on the full-quarter contribution from Oakwood Premier OUE Singapore, which opened in June 2017, it said.

OUE said it also received dividend income of S$12.6 million from Gemdale Properties and Investment Corp., in which it has a 14.8 percent interest, as of 30 June 2018.

Finance expenses rose 13.2 percent on-year to S$37.35 million, it said.

OUE proposed an interim tax-exempt dividend of 1 Singapore cent a share, unchanged from the year-earlier period.

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