UOL's full-year net profit down 26% to $305.6m

Blame the fair value losses.

Property firm UOL Group reported a full-year net profit of $305.6m, down 26% from the previous year's $413.1m.

According to the group, it recorded a net fair value and other losses of $37.2 m in 2016, compared to the $41m gain in the previous year.

Meanwhile, UOL's group revenue rose 13% to $1.4b with higher contributions from all segments except dividend income which fell 29% to $30.2m with the absence of the UOB special dividend.

It cited its property development as the top revenue generator, ticking up 27% to $733.9m with the recognition from Riverbank@Fernvale, Botanique at Bartley and Principal Garden. During the year, the Group sold 484 residential units in Singapore although there were no new projects launched.

Meanwhile, hotel operations revenue notched up 2% to $429.6m from better performance of all Australian hotels. Revenue from property investments also reported an increase of 3% to $225m.

For the said year, expenses fell $252.6m. Finance expenses dropped 27% to $30.3m as a result of lower unrealised currency exchange losses on the Group’s borrowings in US dollars for investments in China. Marketing and distribution expenses declined six per cent to $63.4m, administrative expenses fell four per cent to $77.7m, while other operating expenses slipped one per cent to $81.3m.

The Group incurred an impairment charge of $26.7m for the hotel under development in Bishopsgate, London, due mainly to increases in development cost estimates in 2016 compared with 2015. The impairment was partly offset by the write-back of an impairment charge of $2.7m for Pan Pacific Tianjin.

Deputy Group Chief Executive Officer Liam Wee Sin said the UOL has continued to build its recurring income with new acquisitions overseas.

"This has cushioned the decline in contributions from property development in Singapore where the market remains challenging, especially with the cooling measures unlikely to be lifted for some time," he said.

He added, “Nevertheless, we believe there’s still demand for projects with good locational and product attributes as seen from the strong interest for The Clement Canopy. With strong take-up in all our projects, we are looking to replenish our landbank in niche locations.”