UOL’s 1H2022 net profit increased by 306% due to property development and hospitality

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Last Updated on August 14, 2022 by Bitfinsider

On August 11, UOL Group announced net earnings of $371 million for the six-month period ending June 30. This was an increase of 306% year over year, driven by a recovery in hotel operations, improved business overall, and fair value and other gains of $190 million. The group’s pre-tax profit before fair value and other gains/losses increased 47% year over year to $315.5 million as revenue increased by 36% to $1.53 billion.

With more units delivered for The Sky Residences in London and Park Eleven in Shanghai, revenue from real estate development increased by 45% to $999.9 million. This increase was driven by higher progressive revenue recognition from Singapore’s Clavon, Avenue South Residence, and The Watergardens at Canberra.

Over 98% of the units in the 372-unit AMO Residence on Ang Mo Kio Avenue 1 were sold on the first day of sales on July 23, 2022, according to UOL, which reported robust sales. It was Ang Mo Kio’s first significant launch in eight years. UOL Group, Singapore Land Group, and Kheng Leong Co. together to develop AMO Residence in a 60:20:20 joint partnership.

Revenue from UOL’s hotel business increased by 64% to $206.3 million in the first half of 2022. This was primarily because of the Parkroyal Collection Marina Bay in Singapore, which fully reopened in May 2021 after a significant renovation, and the Pan Pacific in London, which opened in September 2021. According to UOL in its release, other hotels also benefited from the reopening of borders and a resumption of economic and social activities in their respective countries.

Due to an increase in dividends from United Overseas Bank in FY2022 compared to the prior year, investment income increased by 48% to $26 million.

Due to lower contributions from Singapore Land Tower in Raffles Place, which is undergoing an asset upgrade exercise, property investments saw a minor 1% decline in revenue to $247.9 million in the first half of 2022. Better performance from serviced suites partially compensated this.

Odeon Towers’ extension work began in the first quarter of 2022, and the Clifford Centre and Faber House’s redevelopment work is anticipated to start in 2023.

Costs increased, particularly financing costs, which increased 68% year over year to $46.6 million. The issuance of fixed rate notes at 2.33%, the repayment of fixed rate loans, the environment of rising interest rates, and a new loan taken for the purchase of the Watten Estate site in April 2022 all contributed to the increase.

In comparison to 1H2021, the weighted average interest rate on Group external borrowings was 1.74% in 1H2022.

With the resumption of marketing efforts and the opening of Pan Pacific London in September 2021, as well as higher selling costs for The Watergardens at Canberra, Avenue South Residence and V on Shenton in Singapore, and The Sky Residences in London, the group’s marketing and distribution costs increased 23% to $64.4 million in 1H2022.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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