OUE's net profit skyrockets to $87.1m in Q1
But more than half of its revenue is at risk due to ongoing disruptions.
OUE Limited’s profit attributable to owners of the company (PATNCI) expanded to $87.1m in Q1 from only $1m last year on the back of foreign currency translation gains as well as higher marked-to-market fair value gains on investments, the property group revealed in an interim business update.
Its revenue also expanded 26.4% YoY to $186.2m during the quarter, compared to $147.3m a year earlier. The group’s development properties division as well as contribution from the Mandarin Gallery contributed to this rise, although it was offset by lower contributions from the hospitality division and its serviced apartment Oakwood Premier OUE Singapore, which was sold on Q4 2019.
Also read: OUE C-REIT's NPI up 42.5% to $62.08m in Q1
However, OUE’s operations had since been hit by the pandemic with more than half of its revenue at risk. In particular, its investment properties and hospitality divisions, which make up 41.7% and 16.8% of the group’s revenue, respectively, were named as the most affected by COVID-19 related disruptions.
OUE’s investment properties portfolio is already seeing disruptions in leasing activities and declines in shopper traffic, whilst expansions and relocations are put on-hold. Its Los Angeles and Shanghai offices are currently closed, whilst mall operating hours have been shortened.
The group’s hospitality division faces a sharp decline in accommodation demand as a result of travel restrictions and postponed or cancelled events. As a result, the division is bracing for a drop in overall occupancy, and its F&B and banquet business.