OUE expects FY2020 loss partly due to sale of US Bank Tower

PROPERTY player OUE expects to post a loss after tax for FY2020 ended December, partly due to a fair-value loss from its sale of the US Bank Tower. This reverses the S$321.8 million profit that it posted in FY2019.

In a Wednesday bourse filing after the market close, OUE said that the FY2020 loss is mainly due to S$435.4 million in net fair-value losses on investment properties.

Of this, S$298.9 million was in relation to the disposal of the US Bank Tower - a Class A office property in Los Angeles, California - completed in September last year. The figure is derived from the difference between the sale price and the last-reported fair value of US$650 million as at end-2019.

Impairment losses on property, plant and equipment and intangible assets also contributed to the full-year loss. This is based on impairment assessments as of end-2020.

Another reason for the FY2020 loss is the impact of the Covid-19 outbreak, OUE said. This is due to the tenant-support measures that the firm has put in place, including rental reliefs, rent deferment, rental rebates and flexible payment schemes. The hospitality division also suffered weaker performance, it said.

OUE is now finalising its FY2020 results and will release them on Feb 24. Shares of OUE closed at S$1.13 on Wednesday, down 0.88 per cent, before the latest announcement.