OUE posts S$30.1m H1 net profit, reversing year-ago loss even as revenue is halved

PROPERTY developer OUE recorded a S$30.1 million net profit for the six months ended June, reversing the year-ago loss of S$207.2 million. The improvement has been attributed to the absence of the fair-value loss recognised on the US Bank Tower last year.

The company proposed an interim dividend of 1 Singapore cent per share, to be paid on Sept 23. The sweetener comes even as OUE's revenue fell by 49.5 per cent to S$152 million, with lower contributions across most divisions.

Following the divestment of the US Bank Tower and the partial divestment of OUE Bayfront, OUE Tower and OUE Link, revenue from the investment properties division decreased to S$105.2 million in H1, down from $139.1 million a year ago.

Meanwhile, revenue for the hospitality division fell by S$18 million to S$25.8 million, due to continued travel restrictions and other pandemic movement curbs in Singapore.

The development properties division recorded only S$0.2 million in revenue, due to the absence of completion of OUE Twin Peaks units sold under deferred payment schemes in H1. Instead, rental income was derived from unsold units, which continue to be marketed.

There were some bright spots. H1 revenue from the healthcare segment held steady at S$14.7 million. The consumer division posted S$6.1 million in revenue, up from S$5 million a year ago, as F&B business picked up during the relaxation of dine-in restrictions.

OUE's latest financial results come as the company has made a number of strategic moves, besides the property divestments. In March, it had acquired 6 per cent of OUE Lippo Healthcare. In July, OUE's joint venture unit, Auric Digital Retail, acquired about 32 per cent of Indonesia-listed Matahari Department Store, becoming its single-largest shareholder.

Looking ahead, OUE is set to rebrand the Mandarin Orchard Singapore to Hilton Singapore Orchard, and is currently executing the phased asset enhancement works. The launch is anticipated in early-2022.

OUE's total borrowings stand at S$2.6 billion as of end-June, down from S$3.5 billion in December last year. The company said: "The group has sufficient liquidity to meet its near-term debt obligations and operational needs. It will also continue to exercise prudence in managing its non-essential capital and operating expenditure as the prolonged pandemic is still impacting businesses and economies worldwide."

Shares of OUE closed at S$1.30 on Tuesday, up 2.4 per cent.