OUE records $207.16m loss in H1
Weaker operating performance and the sale of US Bank Tower dragged it down.
OUE has sunk into a $207.16m loss in H1 from a $61.89m profit in H1 2019, an SGX filing revealed. Revenue likewise crashed 28% YoY to $311.4m from $432.6m over the same period.
In contrast, earnings before interest and tax (EBIT) jumped 21% YoY to $125.1m in H1 from $103.4m, thanks to higher contribution from equity accounted investees. The loss attributable to shareholders was mainly due to the sale of its subsidiary’s US Bank Tower, coupled with the weaker operating performance of the group’s business divisions.
Revenue from all divisions fell, except for the investment properties division, where it inched up 1.9% YoY to $141.6m. The increase was mainly due to the inclusion of contribution from Mandarin Gallery, following the merger of OUE Hospitality Trust and OUE Commercial Real Estate Investment Trust in September 2019, but was partially offset by rental rebates granted to tenants.
The group’s hospitality division saw a sharp drop in revenue to $49.6m in H1, driven by an overall decline in room occupancy and banquet sales arising from travel restrictions and various containment measures amidst the COVID-19 pandemic.
The development property division recorded revenue of $98.5m from $158.3m over the same period, pertaining to the completion of the sale of certain OUE Twin Peaks units sold under deferred payment schemes.
OUE’s healthcare division likewise recorded a marginal 1.7% dip in revenue to $14.9m in H1, no thanks to lower management fees earned by First REIT. Lastly, its consumer division recorded lower revenue of $5.1m in the same period from $9.3m in H1 2019, due to a slide in revenue from OUE Skyspace LA. It arose from its mandatory closure since mid-March.
Overall, OUE stated that they have sufficient liquidity to meet its near-term debt obligations and operational needs. In June, the group secured a $100m committed facility. The firm did not declare an interim dividend for H1.