OUE’s profits plunge 70% on back of lacklustre property sentiment

Revenues also dip 10.6%.

Mainboard-listed integrated property developer OUE Limited’s profits plunged 69.9% in Q2, as the developer raked in $4.4m compared to $14.6m in the same period last year.

The decrease was due mainly to lower contribution from Mandarin Gallery and Mandarin Orchard Singapore held via the Group’s equity interest in OUE Hospitality Trust, offset partially by lower finance expenses.

A recorded revenue of S$100.2 million for 2Q14, represented a 10.6% decline as compared to the corresponding period in the preceding financial year..

According to OUE, the lower revenue was attributed to the lacklustre Singapore residential property market sentiment and the absence of contribution from the China hotels which were divested in September 2013.

However, positive contributions from U.S. Bank Tower and Lippo Plaza which were acquired in June 2013 and January 2014 respectively. On the whole, the Group’s earnings before interest and tax decreased 15.8% quarter-on-quarter to S$32.8 million.

Here’s more from OUE:
At post-tax level, the Group’s net attributable profit was S$4.4 million in 2Q 2014The Group registered a healthy balance sheet as at 30 June 2014 with net asset value per share increasing 27.0% from S$3.18 as at 31 December 2013 to S$4.04. The Group ended the quarter with a cash balance of S$449.3 million after paying down debt of S$385.0 million and is well-positioned to capitalise on new growth opportunities.

The Directors have proposed an interim tax-exempt dividend of 1 Singapore cent per share.

During the quarter under review, the Group’s Hospitality division registered revenue of S$49.3 million. Excluding the contribution from the two disposed China hotels, hospitality revenue increased 1.0% year-on-year.

Revenue generated from the Group’s Property Investment Division increased to S$37.3 million due to the inclusion of revenue from Lippo Plaza and the U.S. Bank Tower.

In addition, the Group recognised revenue of S$10.9 million from the sale of residential units for Twin Peaks in 2Q 2014.