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UOL reports 43% profit drop, no condo launches in 2016

Singapore-listed UOL Group, a major player in the local property market, reported a 43 percent slump in net profit to $391.4 million for the 2015 financial year.

In a statement released on Friday (26 Feb), the group blamed the profit fall on lower fair value gains for its investment properties, as well as the absence of a large one-time profit made from the sale of a land site in Malaysia in 2014.

UOL also incurred losses of $22 million, mainly from impairment charges for a hotel in Tianjin and a mixed-use development in London.

Despite the depressed market conditions in Singapore, group revenue was up 12 percent to $1.28 billion. Specifically, revenue from property development, the group’s largest revenue generator, rose 27 percent to $557.5 million, mainly from local residential projects.

About 850 housing units in Singapore were sold last year by UOL, with a sales value of more than $900 million. In 2015, it launched two condominiums – Botanique at Bartley and Principal Garden in Prince Charles Crescent, which have sold over 70 percent and 21 percent of their units at an average price of $1,286 psf and $1,601 psf respectively. No new launches are being planned for 2016.

Under its pipeline for residential projects is a 99-year leasehold site in Clementi Avenue 1 which could yield over 500 condo units. As this is expected to be the tallest Prefabricated Pre-finished Volumetric Construction (PPVC) building in the world, UOL is adopting a conservative approach and plans to launch it next year.

Meanwhile, revenue from property investments grew 11 percent to $219.4 million for the fiscal year.

“(The) Singapore residential market remained challenging in 2015 amid an economic slowdown and the dampening effects of the government’s cooling measures. Despite this, our property development and investment business performed credibly,” said UOL Deputy Group CEO Liam Wee Sin.

“We expect market conditions to remain subdued in 2016 and will continue to build recurrent income from rentals of offices and shopping malls, and from our hospitality business,” he added.

The group’s directors have proposed a first and final dividend of 15 cents per share.

Picture Source: Artist’s impression of Botanique at Bartley. Source: UOL Group
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