CDL, UOL Report First-Half Profit Drops as Investment Gains Dry Up

City Developments Ltd and UOL Group posted first-half revenue declines as an absence of huge funding features hit the underside line on the Singapore-listed builders.

At CDL, web revenue after tax and non-controlling curiosity plunged to S$66.5 million ($49 million) within the first six months of 2023 from S$1.1 billion within the year-earlier interval. The steep drop mirrored the absence of divestments akin to the $930 million sale of the Millennium Hilton Seoul and its adjoining land web site within the first half of 2022.

The property big managed by Singaporean tycoon Kwek Leng Beng additionally pointed to the results of final 12 months’s one-off acquire on the deconsolidation of CDL Hospitality Trusts from the group, together with greater financing prices and impairment losses for its UK funding properties.

“Despite the persistent macroeconomic headwinds and inherent market unpredictability, the group will stay agile, resilient and adaptable in navigating these headwinds,” Kwek mentioned Thursday in a launch. “Building on the continued recovery of the hospitality sector, our recent acquisitions of the Sofitel Central Brisbane and Nine Tree Premier Hotel Myeongdong II in Seoul at attractive valuations strengthen the group’s presence in key gateway cities.”

EC Completion Boosts Revenue

CDL recorded an 84 % year-on-year rise in income to S$2.7 billion for the primary half of 2023, yielding a pre-tax revenue of S$179.5 million. Excluding divestment features and impairment losses, the group would have seen a 48 % leap in pre-tax revenue on a like-for-like foundation.

Property growth continued to be CDL’s greatest top-line contributor as income soared 183 % within the phase. The surge was underpinned by the completion of the totally bought Piermont Grand govt condominium, as an accounting quirk permits for recognition of income and revenue of their entirety from newly accomplished ECs.

In Singapore, CDL and its three way partnership companions bought 508 residential models with a complete gross sales worth of S$1.1 billion, led by the sturdy launch of the 638-unit Tembusu Grand in April. To date, 367 properties have been bought on the Katong venture being developed alongside Hongkong Land subsidiary MCL Land.

Revenue within the lodge operations phase rose 12.4 %, together with 51 % development in income per obtainable room in Singapore and 88.3 % RevPAR development in Asia. The efficiency of Asia, Europe and US lodge properties exceeded pre-COVID ranges, CDL mentioned.

CEO Sherman Kwek credited final 12 months’s divestments for offering “significant cash” to make strategic bets just like the group’s $468 million acquisition of St Katharine Docks, a mixed-use complicated in central London, from fund administration titan Blackstone.

“These acquisitions are aligned with the group’s goals to advance our global presence in tandem with our land replenishment strategy in Singapore,” Kwek mentioned. “In addition, we remain focused on extracting value from our current assets while pursuing our fund management ambitions.”

Shuffling Hotels

UOL Group reported a 64 % year-on-year drop in first-half web attributable revenue to S$135 million ($100 million), as fair-value features on funding properties fell to S$3.5 million from S$190 million in the identical interval final 12 months.

The builder managed by the Wee household behind United Overseas Bank mentioned income fell 11 % to S$1.37 billion. Property growth income slid 32 % on decrease contributions from Avenue South Residence and The Tre Ver in Singapore and Park Eleven in Shanghai, whereas lodge income leapt 66 % as tourism continued to get better.

Expenses additionally elevated after the opening of two Kuala Lumpur motels in 2022 and the Pan Pacific Orchard lodge in Singapore throughout June of this 12 months.

“We have been proactively engaged in asset management and asset enhancement initiatives of our existing commercial portfolio while looking for acquisition opportunities,” UOL CEO Liam Wee Sin mentioned in a launch, citing the deliberate $389 million disposal of the Parkroyal on Kitchener Road as a case of unlocking worth from the group’s portfolio.

Singapore’s red-hot housing market confirmed indicators of slowing within the second quarter after the federal government hiked taxes in April in an effort to limit property gross sales. The April-June interval noticed dwelling gross sales fall 30 % in contrast with the primary three months of the 12 months, marking the primary decline in additional than three years, in response to the Urban Redevelopment Authority.