UOL Group releases latest financial results for Q1 2012

We posted our latest quarterly financial results last Friday. Earnings were down for the three months ended March 31, 2012 but mostly because of some accounting adjustments in the corresponding quarter in 2011 to meet the new FRS115 reporting requirements. Here are the press statement below.

Singapore, 11 May 2012 - UOL Group today announced a 63% decline in net attributable profit to $84 million for the first quarter ended 31 March 2012 (1Q 2012) from $230 million in the same period last year. The drop in earnings was due to lower revenue from property development and a 52% fall in share of profits from associated companies to $27.8 million following the completion of Nassim Park Residences in the first quarter of 2011.           

            Group revenue was 59% lower at $297.7 million and this was largely due to the 75% decline in revenue from property development to $153.2 million. The adoption of INT FRS 115 last year resulted in the recognition of $349 million in revenue in 1Q 2011 for units in Duchess Residences sold under the deferred payment scheme which were accounted using the completion of construction method. In addition to Duchess Residences, contributions from Breeze by the East were also absent in this year’s numbers, having received Temporary Occupation Permit (TOP) in 1Q last year while contributions were lower from Meadow@Peirce following the receipt of TOP in February 2012.

During the quarter under review, revenue from property investments rose 7% to $41.9 million while gross revenue from hotel ownership and operations was 22% higher at $96.8 million.

Separately, Pan Pacific Hotels Group Limited (PPHG), in which UOL Group owns 81.6 per cent, reported a 65% jump in net attributable profit to $17.3 million for 1Q 2012 from $10.5 million previously. Revenue was 23% higher at $96.6 million with the inclusion of revenue from PARKROYAL Melbourne Airport which was acquired in April 2011 and with higher contribution from the hotel in Myanmar.

UOL Group’s expenses edged up 2% to $47 million in the first three months of this year, the main reason being a 15% rise in administrative expenses from $14.1 million to $16.3 million. The increases came from higher payroll costs for new staff needed to support expanded operations, including PARKROYAL Melbourne Airport as well as higher maintenance expenses for a newly-acquired enterprise resource planning system.

   

Mr Gwee Lian Kheng, UOL’s Group Chief Executive, said: “Our first quarter results reflected a slowdown in new launches since last year and the completion of several projects. We are pleased that sales of recent property launches have picked up. All 244 units of our Katong Regency project were snapped up within a week of launch in April while Archipelago, launched earlier in December 2011, is now 66% sold.”

Mr Gwee said UOL expects demand for new homes in the mass market segment to be moderate, underpinned by high liquidity and low interest rates. The Group will replenish its landbank in Singapore, and selectively acquire overseas sites. He remained concerned about the global economic slowdown and the lack of resolution in the Eurozone crisis.

   

The Group’s commercial properties remained well received with occupancy of at least 95% in all its major office and retail buildings. But rents in commercial properties are expected to be affected marginally by the economic slowdown in Singapore and the region. Growth in visitor arrivals to Singapore is expected to moderate in 2012 with a projected increase of up to 10% compared to the 13.8% achieved in 2011.

           The Group is targeting to launch the sale of its apartment units at its mixed-development, The Esplanade, in Tianjin towards the end of the current quarter. In Singapore, it has obtained the Strata Titles Board order for the approval of the en-bloc sale of St Patrick’s Gardens estate. The Group is working towards launching the residential project in early 2013.

   

Meanwhile, rentals from The Furniture Mall at The Plaza, Beach Road will cease from May 2012 as the space makes way for the new development of the 180-unit Pan Pacific Serviced Suites Beach Road and a column-free ballroom and meeting rooms for the adjoining PARKROYAL on Beach Road. The 363-room PARKROYAL on Pickering and One Upper Pickering office building are progressing on schedule and the hotel will open towards the end of this year while Pan Pacific Serviced Suites Beach Road will open in the first quarter of 2013.

Shareholder funds increased to $5.4 billion as at 31 March 2012 from $5.3 billion as at end December 2011. In the same period, net tangible asset per ordinary share rose to $7.05 from $6.82. The Group’s gearing ratio decreased to 0.33 as at 31 March 2012 from 0.35 as at 31 December 2011.

Residential units in Katong Regency was sold out within one week of launch.

Katong Regency chalks up brisk sales

We are pretty happy with the result of our launch of our development at Katong Regency at Tanjong Katong Road.

At the preview alone, we sold close to half of the 244 condominium units.
By the end of the first day of sale, we chalked up sales of over 70 per cent of the residential
units, thanks to a solid well designed freehold product and an excellent location.

In an interview with Channel News Asia, Mr Kam Tin Seah, Senior General Manager (Investment & Strategic Development) at UOL, said: "We initially planned to maybe have more than one phase at launch. But because of the good take-up at the soft launch, we have made the decision to launch the whole project.

"It is a very well associated kind of Tanjong Katong address. So you would expect the core demand to still come from this immediate neighbourhood."

Located at the junction of Tanjong Katong Road, the site used to house the former Lion City Hotel and Hollywood Theatre.

Lee Sze Teck, Senior Research Manager of DWG, told CNA said: "There is a certain growth being ramped into the area by the government, so people might buy into the growth story in the area. Also this is a freehold project, and it is a mixed development with retail shops and residential units."

The overall project is designed by SAA Architects, consecutive winner of BCI Asia Top 10 Architects from 2009 and 2012 with the interior spaces in Katong Regency conceptualised by Ministry of Design, two-time recipient of the prestigious President’s Design Awards.

The apartments will sit on top of the ONE KM retail mall which will have a total net lettable area of 210,000 square feet, with over 150 tenants.  ONE KM is conceived as the destination for lifestyle and knowledge, integrating edutainment, gastronomy, lifestyle experiences for the affluent family and “tweens,” the age group between 8 and 14 years.

           There will be a good selection of niche enrichment schools offering classes in dance, music, speech, drama, language, cookery, creative thinking, and brain development. They will be complemented by stores offering IT/electronic gadgets, gifts and novelties, fashion accessories, and education-related products.

The food and beverage outlets fronting the side of Tanjong Katong Road will open till 2 am on Fridays and Saturdays. The anchor tenant, Cold Storage will operate a 20,000 square feet full-fledged supermarket in the basement complete with a third-generation store design.  Located on the third floor will be uniquely designed 12,000 square feet food court complemented by about 5,000 square feet outdoor space for alfresco dining. 

           In the past few years, UOL has been successful in developing several award-winning residential projects including Nassim Park Residences which was named by the South East Asia Property Awards 2011 not just the Best Condominium Development in Singapore but also the Best Condominium Development in South East Asia.  Another luxurious condominium project Duchess Residences won the prestigious FIABCI Singapore Property Awards 2011 in the Residential (Low-rise) category.

UOL Group reports 32% surge in 2011 operating profit; revenue near $2 billion

We delivered an impressive set of financial results for 2011.
UOL Group last Friday announced a 32% increase in profit before
fair value and other gains/losses to $727.8 million for the full year
ended 31 December 2011, boosted by strong growth across all businesses.

Attributable profit before fair value and other gains/losses rose 22 per cent to $535.1 million. Pre-tax profit was up 2% to $904.4 million but net attributable profit was down 12% to $664.2 million due to higher taxes and minority interests.

At the operating level, the three key business segments comprising property development, property investment and hotel operations, reported double-digit growths or more in their contributions. Operating profit from property development surged 151% to $404.8 million. Likewise, investment property and hotel operations saw increases of 14% and 16% in operating profit to $112.6 million and $59.5 million respectively.

Group revenue surged 45% to a record $1.96 billion. The increase came mainly from higher recognition of revenue from the sale of projects launched in the past three years, the inclusion of revenue from PARKROYAL Serviced Suites in Kuala Lumpur, which commenced operations in the fourth quarter of 2010, and from the PARKROYAL Melbourne Airport hotel, which was acquired in April 2011.


The results for 2010 were restated to be comparable to the current year’s results due to the adoption of INT FRS 115, which took effect on 1 January 2011.
Excluding the effects of INT FRS 115, revenue for FY 2011 rose 21% to $1.56 billion
while net attributable profit declined 25% to $558.1 million from $745.8 million in
2010. The share of profit from associated companies excluding fair value gains
decreased to $165.9 million from $247.8 million due to reduced contribution from
Nassim Park Residences after the project obtained Temporary Occupation Permit
(TOP) in 1Q 2011.

The property development business continued to be the main driver of growth,
with revenue up 67% to $1.39 billion, while hotel operations and property
investments grew 11% to $360 million and eight percent to $160.3 million
respectively.


Mr Gwee Lian Kheng, Group Chief Executive, said: “We are delighted that all
our business segments performed well, recording strong growth in operating
profitability. We continue to reap the fruits of our past efforts even as we position
ourselves for future growth.”

He said that UOL is cautious about prospects for 2012 in view of the expected
economic slowdown in Singapore and the region amidst the global economic
uncertainties. The imposition of government cooling measures for the residential
property market in Singapore, tighter immigration rules and the rising supply of
executive condominiums would affect the demand for private residential properties
 in the mass market.

“Our healthy capital position and diversified portfolio will help us ride out the
subdued market. Adopting a cautious approach, we will seek out opportunities to
selectively replenish our landbank in Singapore and overseas.”

During the year under review, the Group sold another 164 residential units
valued at $311 million. It obtained TOPs for four residential projects. Three of them
are in Singapore - Duchess Residences, which won the inaugural FIABCI Singapore
Property Awards 2011, Nassim Park Residences, which won the inaugural South
East Asia Property Awards for Best Condo Development in Singapore and South
East Asia, and Breeze by the East. In Malaysia, the 233-unit Panorama condominium in Kuala Lumpur also received TOP.

During the year, UOL made two acquisitions and entered into a conditional agreement for a third. The first, at the start of the year, was the 13,740 sq m site at the former Lion City Hotel and the Hollywood Theatre near the Paya Lebar MRT Interchange. In March, the Group with partner Singapore Land clinched a 46,632 sq m plot at Bedok Reservoir Road near the Bedok North Downtown Line MRT station. Archipelago, a new condominium to be built on this plot was launched in December, with 160 units sold as at 24 February 2012. Also in December, UOL entered into a conditional agreement for the enbloc acquisition of a 12,780 sq m freehold site at St Patrick’s Garden.

In 2011, revenue for the Group’s hotel operations was boosted by the strong Singapore tourist arrivals and the contribution from the newly-acquired PARKROYAL Melbourne Airport hotel in Australia. Revenue from property investments were held up by higher average rents for the Group’s shopping malls although average rentals for the Group’s office properties were generally softer. Contributions from the newly-opened PARKROYAL Serviced Suites Kuala Lumpur also lifted revenue from property investments.

During the year, the Group’s subsidiary, Pan Pacific Hotels Group secured a 30-year lease for $127.2 million for its 8,088 sq m office building at Upper Pickering Road. The adjacent flagship hotel PARKROYAL on Pickering with 363 rooms is expected to open by the end of 2012.
Revenue from management services was up seven percent to $19.9 million. Dividend income increased 19% to $26.2 million.

Shareholders’ funds increased nine percent to $5.05 billion as at end December 2011 while net tangible asset per share stood at $6.54 compared with $5.91 in 2010. The Group’s gearing remains unchanged at 0.37.

Directors have recommended a first and final dividend of 10 cents per share (one-tier) and special dividend of five cents per share (one-tier).


Well done, colleagues!

Archipelago best selling condo in December 2011

Local media reports today carried the URA's latest industry statistics and noted
our new project Archipelago was the best selling development last December, outperforming several
other projects.

BT reported:" December's top-selling project was Archipelago near Bedok Reservoir (103 units at a median price of $1,118 psf), followed by The Nautical in the Sembawang area (84 units sold at $882 psf median price), said CBRE.'' Straits Times report also noted Archipelago was the top selling project, edging out
The Nautical.

Great turnout at Archipelago launch

The Straits Times reported on January 10 that the showflats for property
launches in Singapore are still receiving good turnout from potential buyers. The local daily carried a photo of our showflat at the recently launched Archipelago where prospective buyers in large numbers were turning up despite the heavy downpout on Sunday afternoon. Well done, colleagues, we look forward to more sales!