OUE’s net profit crashes 85% to $156.4m in FY15

On back of its hospitality arm’s deconsolidation.

OUE posted an 85% YoY nosedive in attributable earnings to $156.4m in FY15, following the deconsolidation of the company’s hospitality arm.

According to the company, the absence of non-recurring gain following the deconsolidation of OUE H-Trust weighed heavily on the company’s results.

Further, revenue declined from the company’s hospitality as well as property development divisions during the year. The former dipped 3% to $204.4m on back of lower RevPAR achieved by the group’s hotel properties, while the latter saw fewer sales from its sole residential development OUE Twin Peaks.

On the flip side, the group’s property investments division showed a $35.6m growth to $193.4m. This is thanks to the consolidation of revenue from One Raffles Place, following the acquisition of additional interests in OUB Centre Limited in October 2015, and the increased occupancy by US Bank Tower.

All this contributed to an overall revenue for the year inching up 3.6% YoY to $31.5m.

Meanwhile, earnings before interest and tax surged 39.3% YoY to $257.8m thanks to negative goodwill recognition from acquisition of Gemdale’s shares. This was partially offset, though, by increased operating costs including marketing expenses relating to re-launching OUE Twin Peaks as well as rental expense incurred under the sale and leaseback arrangements with OUE H-Trust.