SINGAPORE (Nov 12): UOL Group reported earnings of $80.0 million for 3Q19 ended September, some 7% lower than earnings of $85.7 million recorded in the previous year.
This brings the group’s 9M19 earnings to $347.8 million, a 19% increase from $293.0 million in 9M18.
Revenue for the quarter slid 10% to $476.6 million from $526.9 million in the same quarter last year. This was primarily attributable to lower progressive recognition of revenue from development projects such as Principal Garden, The Clement Canopy and Botanique.
Revenue contributions from hotel operations also recorded a 3% dip to $166.3 million on the back of lower occupancies and room rates at Marina Mandarin and PARKROYAL Darling Harbour, as well as ongoing refurbishments at PARKROYAL on Kitchener Road.
The decrease was offset partially by higher progressive recognition of revenue from development projects, Amber45 and The Tre Ver and higher sales from UOL’s technologies segment.
Gross profit for the quarter fell 4% to $236.5 million, as cost of sales dropped 15% to $240.1 million,
Group expenses for the quarter inched up 2% to $115.8 million, led by an 11% increase in marketing and distribution expenses due mainly to launch expenses for Avenue South Residence, and ongoing sales of Amber45, The Tre Ver, Mon Jervois and V on Shenton.
Finance expenses also increased 14% to $29.0 million on higher interest expenses on borrowings for the Avenue South Residence development and for the acquisition of shares in Marina Centre Holdings and Aquamarina Hotel.
UOL’s gearing ratio also increased to 0.30 from 0.28 as a result of borrowings for the acquisition of shares in Marina Centre Holdings and Aquamarina Hotel.
As at end September, cash and cash equivalents stood at $529.1 million.
Earnings per share for the quarter came in at 9.5 cents, down from 10.18 cents a year ago.
In its outlook statement, UOL noted that the Singapore residential market has shown signs of improvement with strong underlying demand. The group added that limited supply and tightening vacancy should support local office rents, although cautious sentiments from the weakening economic outlook could limit rental growth.
UOL added that limited supply and tightening vacancy should support office rents in Singapore, although cautious sentiments from the weakening economic outlook could limit rental growth. Retail rents remain under pressure amidst weak retail sales and tepid economic growth.
Shares in UOL Group closed 3 cents higher, or up 0.38%, at $7.91 on Tuesday prior to the release of results.
