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UOL FY15 profit dragged down by absence of one-time gain, lower fair-value gains

UOL Group on Friday reported a 43 per cent decline in net profit for the full year ended Dec 31, 2015, to S$391.4 million, dragged down by lower fair-value gains for its investment properties and an absence of a huge one-off divestment gain.

But its ongoing core business performed well despite tepid market conditions in its key Singapore market.

Excluding the one-time gain of S$220.1 million from the sale of Jalan Conlay land in Malaysia in 2014, UOL's revenue would have risen 12 per cent to S$1.28 billion in 2015. Factoring in the high-base effect from the sale of the Malaysian site, group revenue slipped 6 per cent to S$1.28 billion in fiscal 2015.

Revenue from property development leapt 27 per cent to S$557.5 million, mainly from sales in Singapore projects Katong Regency, Seventy Saint Patrick's, Riverbank@Fernvale and Botanique at Bartley.

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In all, UOL sold about 850 residential units in Singapore with sales value of more than S$900 million in 2015 based on bookings.

The group's hotel business, the second largest revenue generator after property development, slipped 4 per cent to S$419.4 million. Hotel operations were affected by refurbishment works as well as weak market conditions at Pan Pacific Perth and PARKROYAL Yangon.

The weakness in the Malaysian ringgit and the Australian dollar also affected the reported revenue from the group's hotels in Malaysia and Australia.

Revenue from property investments rose 11 per cent to S$219.4 million from OneKM mall which opened in the last quarter of 2014.

There was an impairment charge of S$3.2 million for Pan Pacific Tianjin and S$37 million for Bishopsgate in London arising from valuing the hotel component of the mixed-use development at Bishopsgate on an "as if complete" basis even though it is still under construction, which may take another three years. The impairment charges were partially offset by a write-back of S$11.8 million for PARKROYAL Melbourne Airport.

UOL deputy group CEO Liam Wee Sin said that the group expects conditions in Singapore's residential market to remain subdued in 2016, while office and retail rentals will continue to face pressure as new supply comes on-stream.

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