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UOL posts 59% jump in Q2 profit
UOL Group Limited enjoyed a 59 per cent jump in net profit for the second quarter ended June 30 to S$109.4 million on the back of higher progressive recognition of revenue from condominium project Principal Garden, higher share of profit from associated companies and fair value gains on investment properties.
Group revenue rose 10 per cent to S$399.1 million, mainly buoyed by property development that made up 55 per cent of group revenue. The revenue from property development grew 19 per cent to S$221.2 million.
Besides Principal Garden, other projects which contributed to group revenue included Botanique at Bartley and Riverbank@Fernvale, UOL said.
Revenue from investment properties inched 2 per cent higher to S$56.4 million and included rental from 110 High Holborn in midtown London, which UOL acquired in June 2016. The group's hospitality business, including management services, was mostly flat with revenue at S$105.6 million, compared to S$106.2 million a year ago.
Attributable fair value gains and other gains totalled S$9.2 million during the second quarter, compared to S$21.5 million of losses in the year-ago period, thanks to an increase in valuation of Novena Square and United Square.
UOL deputy group CEO Liam Wee Sin noted that the hospitality and investment businesses "have performed creditably despite challenging conditions".
But on the residential front, the group is concerned of a possible "disconnect" between the recent land tender prices and achievable end-sale prices.
"Transaction volume in the residential sector has risen steadily but a sustainable recovery in end-sale prices will depend on the dynamics of economy, supply-demand and the rental market," Mr Liam said.