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UOL Q3 net profit slips 7% to S$80m on lower property development earnings

UOL Group's net profit slipped 7 per cent to S$80 million for the third quarter ended Sept 30 from S$85.7 million in Q3 FY2018, due mainly to lower profit from property development, it said on Tuesday.

Group revenue fell 10 per cent to S$476.6 million with lower progressive recognition of revenue from three development projects – Principal Garden, The Clement Canopy and Botanique at Bartley, which obtained Temporary Occupation Permit in December 2018, March and April 2019 respectively. The revenue decline was partly offset by higher progressive recognition of revenue from Amber45 and The Tre Ver, as well as higher sales from the group's management services and technologies segment.

Revenue from property development fell 34 per cent to S$109.3 million.

Revenue from property investments inched up 1 per cent to S$137.4 million while that for hotel ownership and operations eased 3 per cent to S$166.3 million due mainly to lower occupancies and room rates at Marina Mandarin in Singapore and PARKROYAL Darling Harbour in Sydney, as well as ongoing refurbishment works at PARKROYAL on Kitchener Road in Singapore.

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Revenue from management services and technologies climbed 22 per cent to S$41.2 million while dividend income expanded by 10 per cent to S$22.4 million due to higher dividends received from United Overseas Bank.

For the nine months ended Sept 30, net profit rose 19 per cent to S$347.8 million. During the same period, revenue fell 5 per cent to S$1.73 billion.

UOL noted that the "Singapore residential market has shown signs of improvement with strong underlying demand". Avenue South Residence was the top-selling project in Singapore for September, and options have been granted for more than 400 units since its launch in August 2019. Avenue South Residence has 1,074 units.

Previously launched projects, Amber45 and The Tre Ver, have also been well-received with options granted for 80 per cent and 86 per cent of total units respectively.

UOL added that limited supply and tightening vacancy should support office rents in Singapore, although cautious sentiment from the weakening economic outlook could limit rental growth. Retail rents remain under pressure amid weak retail sales and tepid economicgrowth.

Ongoing uncertainties in the United Kingdom over Brexit will continue to weigh on London's residential property market. However, leasing activities remain resilient in Midtown where the group owns two properties.

Earnings per share slipped to 9.50 Singapore cents in Q3 FY2019 from 10.18 cents in Q3 FY2018. Net asset value per share climbed to S$11.69 as at Sept 30, from S$11.42 as at Dec 31, 2018.

UOL shares closed three Singapore cents higher at S$7.91 on Tuesday before the results announcement.