UOL’s profit jumps 32% to $728m in 2011

As revenue for the group’s hotel operations surged on the back of strong tourist arrivals last year.

UOL Group announced a 32% increase in profit before fair value and other gains/losses to $727.8 million for the full year ended 31 December 2011, boosted by strong growth across all businesses.

Attributable profit before fair value and other gains/losses rose 22 per cent to $535.1 million. Pre-tax profit was up 2% to $904.4 million but net attributable profit was down 12% to $664.2 million due to higher taxes and minority interests.

At the operating level, the three key business segments comprising property development, property investment and hotel operations, reported double-digit growths or more in their contributions.

Operating profit from property development surged 151% to $404.8 million. Likewise, investment property and hotel operations saw increases of 14% and 16% in operating profit to $112.6 million and $59.5 million respectively.

Group revenue surged 45% to a record $1.96 billion. The increase came mainly from higher recognition of revenue from the sale of projects launched in the past three years, the inclusion of revenue from PARKROYAL Serviced Suites in Kuala Lumpur, which commenced operations in the fourth quarter of 2010, and from the PARKROYAL Melbourne Airport hotel, which was acquired in April 2011.

The results for 2010 were restated to be comparable to the current year’s results due to the adoption of INT FRS 115, which took effect on 1 January 2011

Excluding the effects of INT FRS 115, revenue for FY 2011 rose 21% to $1.56 billion while net attributable profit declined 25% to $558.1 million from $745.8 million in 2010.

The share of profit from associated companies excluding fair value gains decreased to $165.9 million from $247.8 million due to reduced contribution from Nassim Park Residences after the project obtained Temporary Occupation Permit in 1Q 2011.

The property development business continued to be the main driver of growth, with revenue up 67% to $1.39 billion, while hotel operations and property investments grew 11% to $360 million and eight percent to $160.3 million respectively.

In 2011, revenue for the Group’s hotel operations was boosted by the strong Singapore tourist arrivals and the contribution from the newly-acquired PARKROYAL Melbourne Airport hotel in Australia.

Revenue from property investments were held up by higher average rents for the Group’s shopping malls although average rentals for the Group’s office properties were generally softer. Contributions from the newlyopened PARKROYAL Serviced Suites Kuala Lumpur also lifted revenue from property investments.

During the year, the Group’s subsidiary, Pan Pacific Hotels Group secured a 30-year lease for $127.2 million for its 8,088 sq m office building at Upper Pickering Road. The adjacent flagship hotel PARKROYAL on Pickering with 363 rooms is expected to open by the end of 2012.

Revenue from management services was up seven percent to $19.9 million. Dividend income increased 19% to $26.2 million.

Shareholders’ funds increased nine percent to $5.05 billion as at end December 2011 while net tangible asset per share stood at $6.54 compared with $5.91 in 2010. The Group’s gearing remains unchanged at 0.37.

Directors have recommended a first and final dividend of 10 cents per share (one-tier) and special dividend of five cents per share (one-tier).