UOL reported on Friday that its second quarter net profit rose 21 percent on-year to S$132.67 million as revenue was boosted by higher fair value gains on investment properties and the consolidation of UIC.
Group revenue in the second quarter increased 59 percent on-year to S$236.4 million, on an additional S$295.5 million in revenue from UIC Group and the associated and joint venture companies of UOL Group and UIC Group following their consolidation beginning on 1 September 2017, UOL said in a filing to SGX after the market close on Friday.
Revenue from property development rose 27 percent on-year in the quarter to S$280.6 million, revenue from property investments was up 134 percent on-year at S$131.8 million, and revenue from hotel ownership and operations was 55 percent higher on-year at S$155.3 million, it said.
Excluding the consolidation, revenue from property development would have fallen 31 percent on-year, or by S$69.0 million, in the second quarter on lower progressive revenue recognition from Principal Garden as the project nears completion at the end of the year and the absence of a contribution from Riverbank@Fernvale after it was fully sold in August 2017, UOL said.
That was partly offset by revenue from the Amber 45 project, which launched in May, it said.
Excluding the consolidation, hotel operations revenue was flat on-year in the quarter, with the loss of revenue from closing the Pan Pacific Orchard for redevelopment mostly offset by new revenue from the Pan Pacific Melbourne, which was acquired at the end of July in 2017, UOL said. Property investment revenue, excluding the consolidation, fell 4 percent on-year on lower revenue from OneKM mall, it said.
Dividend income grew 75 percent on-year in the second quarter to S$27.7 million with higher ordinary and special dividends received from United Overseas Bank in the second quarter, UOL said.
The company was cautious on its outlook for Singapore, pointing to the government imposing cooling measures on the property market recently.
“The recent cooling measures will moderate both the sales take-up and prices for the rest of the year. Residential launches with strong locational and product attributes that are realistically priced will continue to attract buyers, especially first-time home buyers,” Liam Wee Sin, UOL deputy group CEO, said in the statement.
“We have been diversifying into income-producing assets geographically in recent years. Our latest acquisition of 180 apartments in Jakarta and clinching of a hotel management contract will help bolster our presence in Indonesia and build up our future recurring income,” Liam said.