SINGAPORE (THE BUSINESS TIMES) - Property company UOL has sunk into the red with net losses of S$82.1 million for its first half ended June 30, 2020, compared to a net profit of S$267.7 million a year ago.
This was due mainly to fair value losses on its investment properties, including retail malls and serviced suites which were severely affected by Covid-19, it said.
Excluding fair value losses, the group's operations remained in the black, with group pre-tax profit totalling S$196.8 million, down 30 per cent from S$282.8 million in H1 FY19.
The group's investment properties were independently valued at a combined S$11.3 billion as at end-June 2020, representing a S$263.8 million or 2 per cent decline from the value as at end-December 2019.
The decline in value was observed across all the group's commercial properties and serviced suites, and reflected the impact of the Covid-19 pandemic on the performance of these properties, it said.The earnings decline also came on the back of a 28 per cent drop in revenue to S$908.2 million, with the biggest hit seen in its hotel ownership and operations segment, where revenue fell 57 per cent to S$136.8 million.
This was due to the group's hotels being affected by the lockdowns and travel restrictions imposed by governments around the world, with the Singapore and Australia hotels seeing the largest decline.
It was compounded by the closure of Parkroyal Collection Marina Bay and Parkroyal Kuala Lumpur for major refurbishments and the absence of revenue from Pan Pacific Suzhou which was sold last December.
Revenue from its property development segment was 29 per cent lower at S$379.7 million, as the revenue from Park Eleven in Shanghai for the first half of 2019 was significantly higher due to the large number of units handed over in Q1 2019.
The decline was offset partially by higher progressive revenue recognition from ongoing projects in Singapore, mainly Avenue South Residence at Silat Avenue and The Tre Ver at Potong Pasir.
Revenue from its property investments fell by 14 per cent to S$238.8 million, due mainly to rental rebates of $26.3 million extended to tenants affected by the Covid-19 pandemic.
Shares of UOL added half a Singapore cent or 0.8 per cent to S$6.64 on Thursday.