PROPERTY developer OUE : LJ3 0% reported a 54.6 per cent decrease in net profit to S$40.2 million for the half year ended Jun 30, 2023, from S$88.7 million in the corresponding period a year ago.

The decline in net profit came despite a 53.3 per cent rise in revenue to S$304.5 million, from S$198.7 million a year ago.

In a bourse filing on Monday (Aug 7), the group said that the year-on-year decline in net profit was mainly due to a lower share of results of equity-accounted investees, higher finance expenses, lower net change in fair value of investments designated at fair value through profit or loss as well as lower net change in fair value of investment properties.

Still, the group saw higher revenue contribution across all its business segments.

Its real estate segment saw revenue grow 46 per cent to S$205 million as all three divisions under the segment grew.

Revenue from the investment properties division rose 12.7 per cent to S$101.3 million, while revenue from the development properties division surged to S$8 million from S$0.2 million as the group completed the sale of three units at OUE Twin Peaks.

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The group added that its core central business district grade A office vacancy rates in Singapore stood at 4 per cent as office rents rose.

“The demand-supply dynamics will likely keep rents and occupancies stable for the rest of the year,” it said.

However, the group cautioned that the real estate sector in China is expected to remain sluggish despite policy support from the government.

The return of tourism and the meetings, incentives, conventions and exhibitions sector also led revenue from the hospitality division to rise by almost two-fold to S$95.8 million.

The group added that the launch of the Orchard Wing at Hilton Singapore Orchard this year drove the revenue increase, and that it expects the tourism sector to recover to pre-pandemic levels in 2024.

Meanwhile, revenue from the OUE’s healthcare segment grew 79.1 per cent to S$79.8 million as it was the first full period contribution from First Real Estate Investment Trust (Reit), which was accounted for as a subsidiary since Mar 1, 2022, as well as the medical partnership with three medical specialist groups in Singapore, which began in Jun 30, 2022.

The group has declared an interim dividend of S$0.01 per share, which is unchanged from what it declared for the same period a year earlier. It is payable on Sep 28, after books close on Sep 15.

OUE shares closed flat at S$1.06 on Monday.