UOL makes first-half gain despite second-quarter loss

MAINBOARD-LISTED property group UOL plunged into the red in the second quarter after lower operating income and property value losses hit its bottom line.

UOL’s $20.1 million loss in the three months to the end of June is a sharp reversal from the $145 million profit it made in the same period a year ago, and partly reflects a $77 million ‘fair value’ loss on investment properties and a $3.8 million impairment loss on a hotel property.

UOL had to pay $6.1 million in income tax during the period, with a substantial part of the fair value and impairment losses having no positive impact on the size of the tax bill.

Hotel operations and dividends were lower and hit by higher interest expenses plus a lower share of profits from associated companies.

The group’s revenue for the period ended June 30 grew 2 per cent on the previous year to hit $213.7 million.

It was boosted by progressive recognition of revenue from the sale of development properties, that is, sales made at various stages of completion of the developments.

Despite the second-quarter setback, the group turned in a profit of $311.6 million for the first half of the year, 66 per cent up on the previous corresponding period.

And first-half revenue rose 11 per cent to $410.4 million, thanks to the successful launches of Duchess Residences, The Regency at Tiong Bahru and Breeze by the East.

Mr Gwee Lian Kheng, group chief executive of UOL, said: ‘We are pleased with our results for the first half of 2009. Operationally, this was a challenging period for the group as the global economic slowdown and H1N1 flu virus continued to take their toll on consumer sentiment, hurting travel and tourism.

‘We will continue to focus on cost management and operational efficiency, while we look for strategic acquisitions that will enhance our earnings capability into the future.’

Loss per ordinary share for the quarter was 2.53 cents, down from earnings per share of 18.21 cents for the same period last year. Net asset value per share as at June 30 stood at $4.93, up from $4.26 as at Dec 31 last year.

Source : Straits Times – 13 Aug 2009