Its fair value gains on investment properties skyrocketed 182% and boosted earnings.
UOL Group’s profits jumped 48% YoY to $195.38m in Q2 from $131.89m in 2018, even as revenue crashed 20% YoY to $512.3m.
The profit increase was due mainly to the recognition of higher fair value gains on investment properties, which rose 182% to $181.9m. In contrast, its pre-tax profit excluding pre-value gains went down 7% YoY to $141.8m as property development and higher finance expenses generated lower profit.
Meanwhile, its group revenue in Q2 declined no thanks to the absence of contribution from Principal Garden, which obtained its temporary occupation permit (TOP) in December 2018; as well as lower progressive revenue recognition from The Clement Canopy and Botanique at Bartley, which were completed in March and April 2019 respectively. Revenue from property development fell 48% to $145.3m.
Revenue from property investments was 3% YoY up at $137.8m mainly on account of contribution from UIC Building and new contribution from 72 Christie Street in Sydney. Its management services and technology revenues also rose 3% to $45.2m, whilst an 18% increase in dividend income to $32.8m came from higher dividends received from UOB and Haw Par Corporation.
On the other hand, revenue from hotel ownership and operations dipped 3%to $151.3m, dragged down by lower occupancies and room rates at Marina Mandarin and 2 PARKROYAL Darling Harbour and ongoing refurbishment at PARKROYAL on Kitchener Road.
Gross profit margin improved from 41% in 2018 to 49% in Q2 as a result of lower revenue from property development, which has a higher cost ratio and higher dividend income.
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