Uni-Asia reports 1Q19 net profit rose 10 percent on better investment returns, hotel income

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Uni-Asia reported Wednesday its first quarter net profit rose 10 percent on-year to US$3.66 million on better investment returns and higher hotel income.

Total income for the quarter ended 31 March increased 26 percent on-year to US$32.21 million, Uni-Asia said in a filing to SGX.

Hotel income jumped 45 percent on-year to US$18.61 million as the number of hotel rooms under operation rose to a total of 16 hotels with 2,667 rooms, compared with 11 hotels with 2,004 rooms in the year-ago period, Uni-Asia said.

Investment returns were US$1.57 million in the quarter, swinging from a year-ago loss of US$897,000, on realized gains from ship and property investments and a fair valuation gain on property investments, the filing said.

Interest income rose 11 percent on-year to US$223,000, while fee income increased 5 percent on-year to US$2.54 million, Uni-Asia said.

Fee income was higher on increases in asset management and administration fee and brokerage commission income increased, the filing said. In addition, subsidiary Uni-Asia Capital (Japan) earned US$400,000 in incentive fees during the quarter from managing property projects in Japan, the filing said.

However, charter income fell 11 percent on-year to US$9.10 million after the group disposed of one vessel in April 2018, Uni-Asia said.

“In addition, the overall dry bulk market was weak in the first quarter of 2019 due to several factors including the Brazilian dam disaster, and the weakness in grain trade and the lower steel production in Japan in January and February,” the filing said. “The weak dry bulk market in the first quarter of 2019 affected two older 28k dwt dry bulk carriers which were on spot charter.”

Other income declined 80 percent on-year to US$169,000 for the quarter, it said.

Total operating expenses rose 18 percent on-year to US$24.1 million in the quarter, mainly on higher employee benefits and hotel operating lease expenses and the number of hotel rooms increased, Uni-Asia said.

The company was upbeat on the outlook for the hotel operations, which are in Japan.

“Japan’s 10-day imperial succession Golden Week holiday, upcoming Rugby World Cup and Tokyo 2020 Olympics are some positive factors for Japan’s hospitality industry,” it said. “On the other hand, there are signs of oversupply of hotel rooms in areas such as Kyoto. The group is working to capitalize on Hotel Vista brand name and good service standards to optimize the returns from hotel operations.”

Uni-Asia also announced a one-for-two bonus issue of shares to reward shareholders and boost trading liquidity, with the total number of shares set to rise to 78.6 million form 52.4 million.

 

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