OUE LIMITED
LJ3.SI
OUE Limited: Focused on execution
- FY15 results broadly in line
- Focused on AEI and lease management
- Final cash dividend of 1.0 S-cents
FY15 PATMI down due to absence of divestment gains
- OUE reported that its FY15 PATMI decreased 85.7% to S$156.4m mostly due to the absence of divestment profits from the sale of Mandarin Orchard Singapore and Mandarin Gallery to OUE Hospitality Trust in FY14; partially offset by an increase in the share of results of equity accounted investees, given a S$143.4m of negative goodwill recognized for the acquisition of shares in Gemdale Properties in FY15.
- In terms of the topline, FY15 revenues rose 3.6% to S$431.5m given higher contributions from the group’s property investment division (up S$35.6m to S$193.4m in FY15) while revenues from the hospitality division remained relatively stable (S$204.4m) and property development revenues (solely from the group’s sole residential development, Twin Peaks) dipped over FY15.
- Accounting for one-time gains and extra-ordinary items, we judge FY15 results to be broadly within expectations.
- A final dividend of 1.0 S-cent was proposed; including the interim dividend paid earlier in the year, this brings the total cash dividend for FY15 to 5.0 S-cents.
Increased stake in OUE C-REIT to 65%
- We understand that management remains focused on asset enhancement initiatives and active lease management at OUE Downtown and US Bank Tower.
- Asset enhancement works at OUE Downtown is expected to complete by end 2016 and the committed office occupancy rate is currently 91.0%.
- At the US Bank Tower, the commercial office space has an occupancy rate of about 74.7%.
- In addition, the 10-storey extension at Crowne Plaza Changi Airport recently passed its half-way mark and is on track to complete in Jun 2016.
- The group also recently increased its stake in OUE C-REIT to 65.0%, purchasing 203.1m shares for approximately S$0.817 per share (~14% discount to net tangible asset value per units as at end Dec 2015), which will allow OUE to participate in the trust’s regular and growing distributable income.
- We update our valuation model for higher discount rates and softer ASPs, and our fair value estimate dips from S$2.69 to S$2.32.
- Maintain BUY.
Eli Lee
OCBC Securities
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http://www.ocbcresearch.com/
2016-02-24
OCBC Securities
SGX Stock
Analyst Report
2.32
Down
2.69
