Mainboard-listed integrated property developer Overseas Union Enterprise Ltd. (OUE) has posted a 29.9 percent increase in profit-before-tax in the first quarter, on the back of a 42.2 percent increase in revenue to S$68.2 million. This was mainly attributed to a continued growth in its Hospitality and Property Investment divisions.
Strong tourist arrivals in Asia contributed to strong growth in the company’s hospitality division, contributing to an 11.5 percent rise in revenue to S$45.2 million in the first quarter.
Revenue per available room (RevPAR) for Mandarin Orchard Singapore in the first quarter climbed 17.4 percent, while rental income jumped over 300 percent to S$22.5 million from the S$7.3 million recorded in Q1 last year. This was attributed to contributions from leases at DBS Building Towers One and Two, which the company acquired in September 2010.
“Our strategy of expanding our asset portfolio and enhancing the value of our assets has certainly proven to be the correct one,” said Dr. Stephen Riady, Executive Chairman of OUE.
“Hospitality and commercial sectors continued to be our growth drivers in this quarter. Riding on the current trend, we believe that these two business segments will continue to drive OUE’s growth in this fiscal year.”
In April this year, OUE announced its acquisition of the Crowne Plaza Changi Airport for S$293.0 million. It is also seeking the opportunity to develop some 200 rooms on an adjacent land plot, with an estimated construction cost of S$37.0 million. When completed, OUE will have a total investment of around S$330.0 million, or approximately S$635,000 per key.
“We believe that the addition of the Crowne Plaza Changi Airport to our portfolio of prime assets will significantly enhance our competitive presence in Singapore’s hospitality landscape and give us greater profitability,” said Dr. Riady.
“By leveraging on our expertise in asset enhancement, this newly-acquired asset will help OUE to continue on its growth continuum, as we seek to maximise shareholder value. With the upward trends in the hospitality and commercial property sectors, the Group is well-poised to ride on this momentum to capture further growth.”
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