Property player OUE has reported FY2020 losses of $343.4 million, versus earnings of $255.2 million in the preceding year as it took fair value losses of some $435.4 million, including those recognised upon the sale of the US Bank Tower last September.
OUE, which runs a sizeable hospitality business too, recognised additional impairment losses on plant and equipment. However, lower financing costs helped offset some of the hit.
During the year, the company extended some $19.9 million worth of relief to its tenants as it takes a “long-term view” of its relationship with them amid the pandemic.
It expects the office operating environment to remain resilient, while retail recovery is expected to be slow.
The company plans to pay a final dividend of one cent per share, versus total of five cents paid for FY2019.
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With the divestment of the US Bank Tower last September for US$430 million, OUE is able to reduce its gearing from 57.8% as at Dec 31 2019 t0 51.8% as at Dec 31 2020.
“The disposal has also provided a timely opportunity for the group to unlock capital at a time when the longer-term outlook for the US property market is uncertain,” says OUE.
OUE is also going ahead with the refurbishment and rebranding of its Mandarin Orchard Singapore into Hilton Singapore Orchard, so as to create more “income generating spaces”.
The rebranded hotel, slated for launch next year, will allow OUE to tap on Hilton’s strong branding and global sales and distribution network for higher-yielding leisure and corporate travellers.
“As the prolonged pandemic is still impacting businesses and economies worldwide, the group will continue to exercise prudence in non-essential capital and operating expenditure across the properties,” says OUE.
OUE shares closed Feb 24 at $1.10, down 1.79%.
