OUE profits surged sevenfold to $107.6m in 3Q

Profits nearly doubled in the first nine months to $141.6m.

Property developer OUE reported attributable profit of S$107.6 million for the third quarter ended 30 September 2016, up from S$15.0 million in the previous corresponding quarter.

This was achieved on the back of an increase in revenue by more than four times to S$419.1 million, from S$99.0 million in 3Q 2015.

According to the management, the robust performance for 3Q 2016 was underpinned mainly by contribution from the Property Development and Property Investments divisions.

For the Property Development division, the continued sales and marketing efforts of units at OUE Twin Peaks drove sales up in 3Q 2016, resulting in revenue contribution of S$89.2 million.

The revenue for 3Q 2016 also includes contribution from the divestment of Crowne Plaza Changi Airport Extension (CPEX) to OUE Hospitality Real Estate Investment Trust (OUE H-REIT”) on 1 August 2016, for a consideration of S$205.0 million.

The net gain on divestment of CPEX was approximately S$66.7 million after taking into account development and related costs of CPEX.

For the Property Investments division, contribution rose 50.1% to S$65.6 million, from S$43.7 million in 3Q 2015, mainly due to the consolidation of revenue from One Raffles Place following the acquisition of additional interests in OUB Centre Limited in October 2015, which was previously equity-accounted.

Revenue for the Hospitality division remained in line at S$52.4 million in 3Q 2016.

The newly operational OUE Skyspace at US Bank Tower in Los Angeles also contributed positively to the Group's revenue in 3Q 2016.

Officially opened in June 2016, OUE Skyspace is the observation deck at US Bank Tower that offers visitors exhilarating, 360-degree views of Los Angeles from nearly 1,000 feet above
ground.

Correspondingly, earnings before interest and tax rose to S$118.4 million for 3Q 2016.

In addition to its strong operating performance, the Group also benefitted from other gains of almost S$29.0 million, largely from the reversal of impairment losses of S$15.1 million from the units sold at OUE Twin Peaks, resulting in an increase in the Group's attributable profit to S$ 107.6 million for 3Q 2016.