SINGAPORE (Feb 17): Integrated property developer OUE reported a 7.7% fall in FY16 earnings to $144.4 million from $156.4 million a year ago despite a doubling of revenue to $884.2 million.
This was mainly due to net fair value losses on investment properties and higher finance expenses but partially offset by the reversal of impairment losses on OUE Twin Peaks and gains on the marked-to-market investments.
Group revenue in FY16 was boosted by strong contributions from both the Property Investment and Property Development divisions.
Revenue from the Property Investment division rose 36.9% to $264.7 million, mainly due to the full-year consolidation of revenue from One Raffles Place following the acquisition of additional interest in OUB Centre in October 2015.
For the Property Development division, the continued sales and marketing efforts at OUE Twin Peaks drove sales up in FY16, resulting in revenue contribution of $197.0 million from $23.6 million in FY15.
The group's revenue for FY16 also includes contribution from the divestment of Crowne Plaza Changi Airport Extension to OUE Hospitality Real Estate Investment Trust on Aug 1 2016, for a consideration of $205 million. The net gain on the divestment of CPEX was $68.7 million.
Revenue from the Hospitality Division was $201.7 million in FY16, a slight decrease of 1.3% from $204.4 million in FY15.
The newly operational OUE Skyspace at US Bank Tower in Los Angeles also contributed positively to the group's revenue in FY16.
On the back of higher revenue, earnings before interest and tax (EBIT) increased by 6.5% to $274.6 million in FY16.
Looking ahead, OUE says it will remain focused on active lease management and ongoing asset enhancement activities to increase the recurring income base from its property portfolio.
Dr Stephen Riady, Executive Chairman of OUE, said, "In view of the subdued global and local economic conditions, we are satisfied with the Group's performance in FY2016. We continue to enjoy recurring income growth from our well-diversified portfolio of prime assets. During the year, we continued to maintain our focus on improving our recurring income as we explored strategic investment opportunities. As always, we remain committed to enhancing shareholder value."
OUE has proposed final cash dividend of 2 cents per share, bringing the total cash dividend for FY16 to 5 cents per share.
Shares of OUE closed at $1.95 on Friday.