Overseas Union Enterprise reports 2010 net profit of $777.2mn

The robust performance was achieved on the back of a 58.8% rise in OUE's FY2010 revenue.

According to OUE, this year's net profit reversed the net loss of $93.4 million in the previous financial year.

FY2010 revenue amounted to $215.6 million, driven largely by improved contributions from its Hospitality and Retail divisions. Leasing income from DBS Towers also lifted the Group's income with contributions starting from the fourth quarter of FY2010.

With the improving global economy spurring strong tourist arrivals and receipts in Asia, the Hospitality division − which has a portfolio of prime hotels in Singapore, China and Malaysia − achieved a 32.1 % growth in revenue reaching S$172.3 million, from S$130.5 million a year ago.

Property Investment division (comprising Mandarin Gallery and DBS Towers), closed the year strongly with a healthy revenue contribution of S$38.5 million.

The Group’s profit before tax grew to S$904.6 million in FY2010 as compared to a loss of S$98 million in FY2009, helped by the fair value gain and other gains of $771.7 million.

Earnings per share for FY2010 reached S$0.79, compared to a net loss per share of S$0.09 in FY2009. With the addition of DBS Towers to the Group’s portfolio of properties, total assets of the Group grew 70.3%, from S$2.8 billion (as at 31 December 2009) to S$4.7 billion (as at 31 December 2010). This translates to a net asset value per share of S$2.86 (as at 31 December 2010). Taking into account the valuation surplus of S$1,016 million on the Mandarin Orchard Singapore hotel which was not incorporated into the accounts, the net asset value per share would be S$3.89.

Despite higher finance expenses, due mainly to borrowing for the funding of the acquisition of DBS Towers, the Group ended the latest fiscal year with a healthy balance sheet and a net cash position of S$226.4 million, compared to S$198.0 million in FY2009.

Commenting on the Group’s results, Dr Stephen Riady, OUE’s Executive Chairman said, “The ideal momentum of the current business environment spurred our operating performance to greater heights. Apart from the strong growth from our hospitality and retail divisions, contributions from DBS Towers also had positive impact on our earnings. OUE’s continued growth is testament to the robustness of the Group’s strategy of leveraging our expertise to enhance the value of our assets and unlock more opportunities by enhancing our portfolio.”

Looking Ahead

OUE Bayfront, including the iconic Aerial Tower and refurbished Change Alley Linkbridge, the Group’s latest premium redevelopment project at 50 Collyer Quay obtained Temporary Occupational Permit (“TOP”) in January 2011. The 18-storey Grade A premium office tower has, to date, achieved close to 60% of pre-committed leases. Leasing income from this asset is expected to contribute positively to the Group’s revenue in the upcoming financial year.

On the upcoming year, Dr Riady said, “The Group maintains a healthy and well-diversified portfolio of prime commercial, residential, retail and hospitality assets in Singapore. Riding on rosy economic forecasts for 2011 coupled with OUE’s expertise in identifying high-yielding investments to build a strong recurring income base, the Group is strongly poised to capture further growth.”

To reward shareholders for their support of OUE, the Board of Directors is proposing a final dividend of S$0.02 per share, subject to shareholders’ approval at the upcoming Annual General Meeting. Together with an interim dividend of S$0.02 per share paid on 15 September 2010, the total distribution translates to S$0.04 per share, or 50% of adjusted earnings in FY2010.