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UOL Group's Q1 profit dips 8%
UOL Group, which is slated to launch its boutique freehold project, Amber45, this weekend, said its net profit for the first quarter ended March 31 fell 8 per cent to S$73.82 million.
Its net profit would have been higher if not for the S$7.6 million amortisation and depreciation of fair value uplifts in the first quarter under a purchase price allocation exercise when United Industrial Corporation (UIC) was accounted as a UOL subsidiary from Sept 1, 2017, it added.
Group revenue surged 89 per cent to S$661 million on higher contributions from its three core business segments - property development, property investments, as well as hotel operations.
The consolidation of UIC group and the associated and joint-venture companies of UOL Group and UIC Group added S$316.2 million to UOL's top line during the first three months of the financial year.
Excluding the effects of the UIC consolidation, revenue from property development fell 7 per cent or S$12.1 million with the completion of Riverbank@Fernvale in March 2017, while hotel ownership and operations improved 9 per cent or S$9 million due mainly to maiden contribution from Pan Pacific Melbourne which was acquired last July. Also, property investments fell 4 per cent or S$2.3 million as a result of lower contribution from OneKM mall.
As of Friday, UOL's interest in UIC has crept up to 49.85 per cent, after it acquired 60,300 shares on Friday in the open market at around S$3.25 apiece.
UOL said group expenses rose 67 per cent to S$104 million following the UIC consolidation and higher borrowings for the construction of One Bishopsgate Plaza in London and the acquisition of Pan Pacific Melbourne.
Its marketing and distribution expenses increased 34 per cent to S$21.4 million, while administrative expenses rose 55 per cent to S$30.1 million; finance expenses and other operating expenses jumped 52 per cent and 114 per cent to S$12.2 million and S$40.2 million, respectively.
UOL noted that prices of private residential properties in Singapore are trending upwards, and that office rents could continue its upward momentum on steady demand and decreasing supply. Retail rents, however, could remain under pressure from e-commerce.
"The hospitality sector in Asia-Pacific is set to benefit from the improving global economic outlook except in China and Myanmar, where trading conditions remain challenging," it said.
Meanwhile, the performance of its two commercial properties in Midtown London is expected to remain steady although economic and political uncertainties could weigh on the London property market.
In Singapore, the 139 units at Amber45, a freehold project in East Coast that sits on a site acquired by private treaty from a single owner, have guide prices starting from S$1.45 million for a two-bedroom unit of 614 sq ft, S$2.5 million for a three-bedroom unit of 1,130 sq ft and S$3 million for a four-bedroom unit of 1,346 sq ft.
UOL's 729-unit waterfront development on the former Raintree Gardens site, a 50-50 joint venture with UIC, is expected to be launched in the second half of this year.