UOL (U14) H1 2023 earnings summary

Executive summary

• 1H2023 revenue fell 11% YoY to $1,366.0m; PATMI declined 64% to $135.0m, while hotel operations benefited from tourism recovery.

• Net profit fell 60% to $230.3m; profit attributable to equity holders was $135.0m, while attributable profit excluding fair value and other gains/losses was $131.7m, down 27%.

Financial highlights

• Profit before fair value and other gains/losses and tax fell 27% to $228.8m; profit before tax declined 57% to $273.1m.

• Net fair value gains on investment properties were $44.6m; attributable fair-value gains were $3.5m, versus $190m in 1H2022.

• Gross profit was $503.2m, down 1% YoY; gross margin rose to 37% from 33%.

• Finance expenses rose 101% to $93.9m; finance income increased 177% to $10.0m.

• EPS was 15.99 cents versus 43.94 cents basic and 43.93 cents diluted in 1H2022; operating cash flow was $570.5m versus $164.4m used.

Outlook and guidance

• Singapore residential activity is expected to remain subdued over the next 12 months due to cooling measures, macro headwinds and higher new-home supply; well-located projects may still attract buyers.

• Office rent growth is expected to slow amid cautious leasing, while tight medium-term supply supports the sector; low retail supply and higher footfall support retail rents.

• Hospitality is expected to continue growing with recovery in leisure and corporate travel.

• Watten House is targeted to launch in 4Q2023; Meyer Park in 1H2024 with 220 residential units; Tampines Avenue 11 in 2H2024 with 1,190 units.

• Planned hotel openings include PARKROYAL Serviced Suites Jakarta in Dec 2023 and Pan Pacific Jakarta in 1H2024; managed pipeline projects extend through 2026.