UOL Group’s FY20 net profit plunged 97 per cent to S$13.1 million, from S$478.8 million a year earlier.
This was due mainly to attributable fair-value losses on its investment properties and other losses totalling S$246.7 million, compared to gains of S$165.1 million previously.
The group suffered a decline in fair value on its commercial properties and serviced suites such as Pan Pacific London and Pan Pacific Melbourne, due to the impact of the pandemic.
Excluding fair-value and other gains/losses, UOL’s net profit would have declined 17 per cent to S$259.8 million, against S$313.7 million previously.
This came on the back of a 13 per cent fall in full-year revenue to S$1.98 billion, from S$2.28 billion in the previous year, with lower contributions from most segments except property development and technology operations.
The property development segment saw higher progressive recognition of revenue from Avenue South Residence and The Tre Ver, and revenue from sales of units at V on Shenton and Park Eleven in China; the technology operations segment chalked up more sales of information technology and related services.
Revenue from property investments fell S$48.4 million, or 9 per cent, to S$503.3 million in FY20 on lower revenue from serviced suites and rental rebates of S$20.8 million extended to tenants affected by Covid-19.
Hotel operations suffered the biggest revenue decline of 62 per cent to S$246.5 million, due mainly to the impact of Covid-19, with hotels in Singapore and Australia reporting the largest decrease.
The closure of Parkroyal Collection Marina Bay and Parkroyal Kuala Lumpur for major refurbishments, and the absence of revenue from Pan Pacific Suzhou, which was sold in December 2019, also affected hotel revenue.
Earnings per share shrank to 1.56 Singapore cents, from 56.79 cents a year earlier.
To be sure, UOL had incurred a net loss of S$82.1 million in its first half, but returned to the black after a more stable performance in the second half.
The group expects office demand to be subdued as firms remain cautious about their expansion plans.
Office rental reversions have been single-digit negative since the start of this year, but the downward pressure is likely to be mitigated by limited new supply, it said.
Its retail outlook also remains uncertain as safe-distancing measures will continue and retailers’ sentiments remain cautious. Shopper traffic in FY20 fell about 42 per cent from FY19’s levels.
UOL has entered into more than 40 rent-restructuring agreements since Covid-19 started, mostly to give struggling tenants more time to pay their rent.
On the residential front, its 448-unit development at its Canberra Drive site is targeted to launch for sale in the second quarter of 2021.
The group expects new private home sales to remain resilient but uneven, with stronger demand for smaller units and in the upgrader market.
The construction sector is also likely to see rising costs due to manpower shortage and safe-distancing measures on-site.
On the hospitality front, its Singapore hotels have enjoyed strong occupancy of 60 to 70 per cent from weekend staycationers, but weekday occupancies remain weak at 20 to 30 per cent.
Hotels hope to tap thus-far unused SingapoRediscovers vouchers to attract more visitors.
UOL’s directors have proposed a first and final dividend of 15 Singapore cents per share, compared to 17.5 cents in the previous year.
UOL shares fell S$0.13 or 1.73 per cent to S$7.39 on Friday.