, Singapore

OUE hit with $16.3m net loss in 2Q

Due to a $20.5m fair value loss.

OUE suffered a tough quarter as it withstood a one-two punch from its mercurial mutual funds and a weakening tourism market.

Analysts from Maybank Kim Eng said lackluster tourism drove OUE's hospitality earnings to fall by 5.4%.

Higher revenue from investment offered little consolation. Although revenue from investment properties rose on back of better occupancy at US Bank Tower, its property development segment contributed just $3.3m compared to $10.9m in the same 2Q14 due to sales recognition from OUE Twin Peaks.

“We note that its non-core holdings of SGD479m in mutual funds, which were increased from SGD374m in end-Mar, have led to volatile earnings and possibly a riskier stock profile. Given the muted earnings outlook and lack of stock catalysts, we doubt the stock will re-rate from its current cheap valuation,” said Maybank Kim Eng.
 

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