SINGAPORE (Nov 9): UOL Group reported 3Q17 earnings increased sevenfold to $618.1 million compared to $87.1 million in 3Q16.

Revenue for the quarter increased 37% to $537.9 million from $393.4 million a year ago, mainly due to the consolidation of UIC Group and the associated and joint venture companies of UOL Group and UIC Group which contributed an additional $144.3 million in revenue.

Property development, which accounted for 54% of the group’s revenue, was up 41% at $291.5 million compared to $206.6 million a year ago.

The group’s revenue from property investments increased 44% to $82.7 million from $57.5 million last year.

Meanwhile, revenue from the group’s hotel ownership and operations rose 24% to $136.9 million.

Revenue from the group’s hotel and other management services increased 128% to $12.8 million from $5.60 million a year ago. However, excluding UIC’s consolidation, hotel operations revenue increased 5%, helped by the new contribution from Pan Pacific Melbourne during the quarter.

Similarly, cost of sales increased 40% to $369.7 million compared to $263.2 million last year.

Hence, gross profit for the period came in at $168.2 million, 29% higher than $130.2 million recorded in the previous year.

Gross profit margin dropped to 31% from 33% last year, due mainly to accelerated depreciation expenses of $15.3 million for Pan Pacific Orchard which is scheduled for redevelopment in 2Q18.

Finance income was up 36% to $2.79 million from $2.05 million a year ago.

Meanwhile, miscellaneous income came in at $5.6 million, 53% higher than $3.67 million recorded in 3Q16, due mainly to the recognition of a $1.5 million in compensation for the termination of the Pan Pacific Nirwana Bali management contract in Aug 2017.

Finance expenses increased 46% to $11.3 million compared to $7.78 million a year ago, due mainly to interest expenses of UIC Group as well as bank loans utilised for the acquisition of Pan Pacific Melbourne in July 2017.

As at Sept 30, the group’s cash and cash equivalents stood at $450.1 million.

On the outlook, the group’s hotels in Asia Pacific, particularly those in China and Myanmar, continue to face competitive pressures and oversupply of rooms.

The group says that prices of private residential properties saw its first q-o-q increase after almost four years of decline, reflecting a turnaround in the residential market. Office rents are expected to stabilise, while the retail sector is expected to remain under pressure.

This story, written by Samantha Chiew, first appeared on The Edge Singapore.