OUE Limited has reported earnings of $35.6 million in the 1HFY2025 ended June 30, reversing from the loss of $96.1 million in the corresponding period the year before.
The reversal in earnings was mainly due to a provisional negative goodwill of $94.9 million recognised for the acquisition of additional equity interests in Gemdale Properties and Investment Corporation Limited (GPI) in the 1HFY2025. Higher adjusted ebit, a net change in fair value of investment properties and higher finance income also led to the higher bottomline, which was partly offset by an increase in foreign exchange losses and tax expenses.
However, revenue for the period fell by 6.9% y-o-y to $292.8 million due to a softer performance across the board.
Under real estate, revenue for investment properties and fund management fell by 8.5% y-o-y to $95.1 million mainly due to the absence of contribution from Lippo Plaza Shanghai, which was divested on Dec 27, 2024. This was partly offset by the group’s commercial portfolio in Singapore.
Also within real estate, revenue from the group’s hospitality segment fell by 9.8% y-o-y to $99.2 million due to the high base effects last year, which saw a surge in concert-driven tourism and the beginning of the China-Singapore visa-free arrangement. The decline was also due to the softer demand for travel and spending amid macroeconomic headwinds and heightened geopolitical tensions.
Finally, revenue for development properties, a segment under the group’s real estate business, plunged by 90.5% y-o-y to $142,000 mainly due to the absence of sales completion of units sold in Twin Peaks.
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Healthcare revenue dipped by 1.3% y-o-y to $75.3 million due to lower contribution from First REIT and the absence of contribution from the closure of a pharmaceutical distribution business in China last year. The lower contribution from the REIT was due to the depreciation of the Indonesian rupiah (IDR) and Japanese yen (JPY) against the SGD. The decline was mitigated by the stronger performance from the respiratory specialist clinics in Singapore and the hospital in Wuxi, China.
Others, which includes revenue from the group’s food and beverage (F&B) operation, inched up by 0.9% y-o-y to $23.0 million thanks to the full period of contribution from dining concepts launched last year. This was offset by softer consumer demand amid macroeconomic uncertainties and market saturation.
In 1HFY2025, share of results of equity-accounted investees recorded a loss of $46.0 million, narrowing from last year’s loss of $92.5 million. The lower losses was primarily attributable to the share of lower losses from GPI and supported by ongoing government interventions aimed at stabilising the property market in China.
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According to the group, the share of losses from GPI is largely non-cash in nature and there is no material impact on the group’s operational cash flows and corporate funding requirements.
For the period, the group has declared an interim dividend of 1 cent per share, unchanged y-o-y. The dividend will be paid on Sept 25.
“Amid heightened trade tensions and policy uncertainty, the global and domestic economic environment is expected to remain challenging,” says the group in its Aug 14 results announcement.
“Despite the challenging backdrop, the group’s portfolio, comprising prime and strategically located commercial properties with a diversified tenant base, hospitality and retail assets, as well as the complementary healthcare segment, is expected to provide stable performance in 2025,” it adds.
Shares in OUE closed flat at $1.12 on Aug 14.
