OUE Limited - OCBC Investment 2021-03-03: PATMI Swung Into Red

OUE LIMITED (SGX:LJ3)

OUE Limited - PATMI Swung Into Red

OUE (SGX:LJ3)’s FY20 results missed our expectations. FY20 revenue fell 43.0% y-o-y to S$530.5m, pulled down by lower contributions from all divisions.
OUE recorded net fair value losses of S$435.4m, mainly on the disposal of US Bank Tower and impairment losses on property, plant and equipment and intangible assets.
All-in, OUE's PATMI turned from a gain of S$255.2m in FY19 to a loss of S$343.4m in FY20.
A final dividend of S$0.01 per share was declared, taking OUE's full-year dividend for FY20 to S$0.01 as compared to S$0.06 per share in FY19.

Revenue from Investment Properties division dropped 7.9% y-o-y to S$264.8m in FY20, largely attributable to the disposal of US Bank Tower and S$19.9m of rental reliefs extended to eligible retail tenants.
Hospitality segment was severely impacted by COVID-19 and the absence of contribution from the Oakwood Premier OUE Singapore, with its revenue declining 64.6% y-o-y to S$85.5m.
For Development Properties division, FY20 revenue fell 59.9% y-o-y to S$140.2m due to lower sales completion from OUE Twin Peaks units.
Separately, Healthcare division’s revenue declined 5.0% to S$29.4m due to lower management fees earned by First REIT Management Limited while Consumer division’s revenue was down 50.8% y-o-y to S$10.3m due to impact from COVID-19.

As at 31 Dec 2020, OUE's gearing decreased from 57.8% in the same period last year to 51.8%.
The phased AEI to transform and rebrand Mandarin Orchard Singapore into Hilton Singapore Orchard will commence (delayed by government’s isolation business) and is expected to open in 2022.
After adjustments, our fair value estimate for OUE remains at S$1.22.
See OUE Share Price; OUE Target Price; OUE Analyst Reports; OUE Dividend History; OUE Announcements; OUE Latest News.
HOLD.

Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2021-03-03

SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.220 SAME 1.220