OUE reports 3Q19 net profit surged by 59 times on one-off from OUE Commercial Trust merger

The OUE Bayfront building in Signapore’s central business district. Credit: Shenton WireThe OUE Bayfront building in Signapore’s central business district. Credit: Shenton Wire

OUE reported Thursday its third quarter net profit surged to S$124.1 million from S$2.1 million in the year-ago period on a one-off non-cash gain of S$90.9 million after the merger of OUE Commercial Trust and OUE Hospitality Trust.

Revenue for the quarter ended 30 September jumped 54.1 percent on-year to S$282.5 million on higher contributions from all business divisions, the property developer said in a filing to SGX.

After the merger of the two REITs, OUE de-recognized right-of-use liabilities, lease liabilities and other liabilities related to Mandarin Orchard Singapore and Crowne Plaza Changi Airport which had previously been recognized when OUE Hospitality Trust was an associate, the filing said.

The investment properties division posted a 6.95 percent increase to S$72.3 million, mainly on the inclusion of revenue from Mandarin Gallery, an investment property in the OUE Hospitality Trust portfolio after the merger with OUE Commercial Trust.

The development properties division posted revenue surged 207.11 percent on-year to S$133.9 million on the sale of the property development on 26A Nassim Road, partially offset by lower revenue from OUE Twin Peaks units sold under deferred payment plans. The 26A Nassim Road sale consideration of S$95 million was 10.1 percent above the average market value of the property, OUE said.

The hospitality division reported revenue increased 1.13 percent on-year to S$62.5 million, while the healthcare division’s revenue grew 3.1 percent on-year to S$5.0 million on a higher contribution from OUE Lippo Healthcare. The inclusion of Bowsprit Capital, acquired in October 2018, also boosted revenue, the filing said.

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