UOL Group - OCBC Investment 2024-03-01: A Special Treat

• UOL Group (SGX:U14)’s FY23 revenue came in at S$2,681.7m, which was a decline of 16% y-o-y. However, PATMI jumped 44% y-o-y to S$707.7m due to a one-off disposal gain of S$442.3m from the divestment of PARKROYAL on Kitchener Road.
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Special dividend of S$0.05

• Management declared a first and final dividend of S$0.15, similar to FY22. However, a positive surprise came from its special dividend of S$0.05 which was higher than our expectations and FY22’s S$0.03 special dividend per share. As such, the total dividend of S$0.20 translates to a dividend yield of 3.4% based on UOL's share price of S$5.89 on 29 Feb 2024.
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Hotel operations the bright spot

• The main driver for UOL’s FY23 results was its hotel operations, which contributed 28% of its revenue after an increase in sales by 38% y-o-y. Operating profit for this segment reversed from a loss of S$12.1m in FY22 to a profit of S$60.5m. This was aided by the recovery in its revenue per available room (RevPAR) by 23%, 13% and 47% in Singapore, Oceania and Others, respectively.
• Operating profit from its property investments segment was flat y-o-y at S$332.1m, while that for its property development segment slipped 44% y-o-y to S$190.0m. UOL sold 312 residential units in Singapore aggregating S$1.1b in FY23, which paled in comparison to the 703 units sold in FY22 which were valued at S$1.55b. This was attributed to the weak transaction volumes in the Singapore residential property market given the spike in borrowing costs and continued increase in selling prices.

Land bank added

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-03-01 SGinvestors.io

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