OUE's full-year profit down 7.7% to $144.4m

Blame higher expenses and fair value losses.

Integrated property developer OUE Limited reported a lower net profit for the past year despite doubling its revenue to $884.2m.

For 2016, OUE reflected a 7.7% lower net profit to $144.4m, mainly due to net fair value losses on investment properties and higher finance expenses, partially offset by the reversal of impairment losses on OUE Twin Peaks and gains on the marked-to-market investments.

The revenue was boosted by strong contributions from both the Property Investment and Property Development divisions. Revenue from the Property Investment division rose 36.9% to $264.7m from $193.4m in the previous financial year, mainly due to the full year consolidation of revenue from One Raffles Place following the acquisition of additional interest in OUB Centre Limited in October 2015.

For the Property Development division, the continued sales and marketing efforts at OUE Twin Peaks drove sales up in FY2016, resulting in revenue contribution of $197.0m from $23.6m last year. However, the revenue from the Hospitality Division was 201.7m in 2016, a slight decrease of 1.3% from $204.4m in 2016.

Looking ahead OUE remains focused on active lease management and ongoing asset enhancement activities to increase the recurring income base from its property portfolio.

OUE noted that the enhancement work at OUE Downtown is nearing completion and in 2Q17, a new mixed-use development comprising office space, a retail podium and luxurious serviced residences will be unveiled. Despite the ongoing enhancement works, the office space at OUE Downtown continues to enjoy a committed office occupancy rate of 86.9%.

“In view of the subdued global and local economic conditions, we are satisfied with the Group’s performance in FY2016. We continue to enjoy recurring income growth from our well-diversified portfolio of prime assets. During the year, we continued to maintain our focus on improving our recurring income as we explored strategic investment opportunities. As always, we remain committed to enhancing shareholder value,” said Dr Stephen Riady, Executive Chairman of OUE.