OUE LIMITED
LJ3.SI
Swung to 2Q loss due to fair value loss
- 2Q15 revenues decreased 4.5% YoY to S$95.6m mainly due to lower contributions from the hospitality segment and OUE Twin Peaks, partially offset by firmer rental income from investment properties.
- While EBIT for the quarter was mostly flat at S$33.3m (up 1.4% YOY), we saw 2Q15 PATMI swing to a S$16.3m loss, versus a S$4.4m profit in 2Q14, due to a S$20.5m mark-to-market loss on the group’s investment in a mutual fund.
- Accounting for onetime items, we judge the quarter’s numbers to be mostly in line with expectations.
- While the outlook for the Singapore property market remains clouded, we highlight that OUE’s shares are trading at a significant 57% discount to its book value and that the group continues to enjoy a healthy balance sheet with S$299.7m in cash and 45% net gearing.
- An interim dividend of 4.0 S-cents was proposed.
- Maintain BUY with an unchanged fair value estimate of S$2.69 (20% discount to RNAV).
Eli Lee | http://www.ocbcresearch.com/ OCBC Investment Research 2015-08-17
2.69
Same
2.69
