Meanwhile, Pan Pacific Orchard took a $6.6 million accelerated depreciation charge following the decision to cease operations in the second quarter of 2018 for redevelopment.
Revenue for the quarter increased by 89% to $661.0 million, compared to $350.7 million last year.
See: UOL posts 8% decline in 1Q earnings to $73.8 mil
During the quarter, the group’s revenue from property development rose 72% to $314.9 million. But excluding the UIC consolidation, development revenue would have been 7% lower y-o-y.
The group’s revenue was underpinned by higher sales and recognition of ongoing projects, including The Clement Canopy, Mon Jervois and V on Shenton. It had also recently previewed its 139-unit Amber 45 project at about $2,200psf, amid strong buying interest, and is planning to launch the 729-unit The Tre Ver in 3Q18.
In a Friday report, analyst Lock Mun Yee says, “This should bolster earnings in the coming quarters.”
Meanwhile, on a comparable basis, rental income would have dipped 4% y-o-y in 1Q due to negative office rental reversion and lower contribution from OneKM mall.
However, as with other office landlord peers, the negative spread narrowed significantly due to recovery of the office leasing market. OneKM is expected to undergo an asset enhancement initiative (AEI) to improve operating performance.
Hence, the analyst reckons that the recurrent rental income should remain relatively stable.
In addition, the group’s hotel operations saw a 9% y-o-y improvement due largely to maiden contribution from Pan Pacific Melbourne as well as higher RevPAR from its Singapore, Australia, Vietnam and Malaysia hotels.
Going forward, management expects the hospitality sector in Asia Pacific to benefit from improving global economic outlook, except in China and Myanmar where trading conditions remain challenging.
As at 12.05pm, shares in UOL are trading 12 cents lower at $8.60 or 0.75 times FY18 book with a dividend yield of 2.01%.
