UOL Group Limited has posted earnings of $91.3 million for the 1HFY2021 ended June, reversing from the losses of $82.1 million reported in the 1HFY2020.
The reversal is attributable to higher revenue of $1.19 billion, which is up 31% y-o-y.
The higher revenue came from an 81% y-o-y surge in revenue from the group’s property development segment on higher progressive recognition of revenue from Avenue South Residence, The Tre Ver and Clavon.
Revenue from property investments for the first six months of 2021 also grew 5% y-o-y mainly due to lower rental rebates extended to the group’s tenants.
On the flip side, revenue from hotel operations fell 8% y-o-y in the 1HFY2021 mainly from its Singapore hotels that were impacted by the Covid-19 pandemic.
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UOL’s hotels in China, however, contributed higher revenue for the period due to the recovering tourism industry in the country.
Technology operations fell 9% y-o-y due to lower sales of information technology on the back of a delay in fulfilling orders.
Investment income fell 41% y-o-y due to lower final dividends and an absence of special dividends paid by UOB in the 1HFY2021.
Gross profit increased 11% y-o-y to $381.4 million, while gross profit margin for the 1HFY2021 stood 6 percentage points lower y-o-y at 32% due to lower sales from property development projects and reduced margins on hotel operations.
Group pre-tax profit improved by 9% y-o-y to $214.3 million on higher income from property development and property investments as well as lower financial expenses.
As at June 30, cash and cash equivalents stood at $1.17 billion.
No interim dividend was declared, as per the group’s policy of not distributing interim dividends.
UOB Group CEO Liam Wee Sin says he remains “concerned” about the rising cost of construction due to a shortage in manpower and supply chain disruptions despite the healthy demand in Singapore’s private residential market.
“These challenges amplify the urgency to work towards strengthening the industry resilience,” he adds.
“The impact of the pandemic has also prompted rethinking on the usage, design and space requirements of the various real estate asset classes. There is a need for more flexible planning approach to adapt and respond to changes such as hybrid working, accelerated online shopping, and the increased focus on health and well-being and climate change.”
Looking ahead, the group expects office rents to continue to increase in the near-term albeit headwinds in the medium-term as firms review their workspace requirements post-Covid-19.
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Retail rents are expected to remain “under pressure” although the market is poised to benefit from improved economic activity.
The hospitality sector looks to remain negatively impacted in the short term due to the absence of international visitors, says the group.
Shares in UOL closed 3 cents lower or 0.4% down at $7.23 on Aug 12.
