| The streets of Hong Kong have seen violence in recent months but the property scene delivered a big win for Uni-Asia in 9M19. Fair valuation gain from its third HK commercial office property project amounted to US$3.8 million.  Uni-Asia booked fair value gains on its 3rd HK commercial office property project 83, Tai Lin Pai Road. Handover of units sold is almost completed.Add that to realised gains of US$2.5 million from ship investments and a Japanese hotel investment, and you get a pretty good idea of what shaped Uni-Asia's bottomline in 9M19.Uni-Asia reported a 5-year high total of US$7.4 million net profit -- or US$6.7 million attributable to owners (+35% y-o-y) -- in 9M19. Both types of gains -- realised and fair valuation -- count as profit derived from its ordinary course of business, said Uni-Asia. They are thus included in the profit figure that Uni-Asia uses when it calculates its dividend payout. It targets to pay dividends of at least 35% and 40% of its profit for FY2019 and FY2020, respectively. Uni-Asia pays dividends twice a year. |
Here's a quick look at the segmental performance:
|
US$’m |
9M2019 |
y-o-y change |
|
|
Shipping |
Revenue |
31.2 |
7% |
|
Property & Hotels (& related financial services) |
Revenue |
71.6 |
26% |
|
Headquarters |
Revenue |
0.15 |
84% |
|
Group total |
Revenue |
102.9 |
20% |
The 9M19 profit would have been $2.0 million higher without the impact of IFRS 16, a new lease accounting rule.
IFRS 16 effectively "front-loads" lease expenses of the 15 hotels that Uni-Asia currently operates and which are leased from third party owners.
Executive chairman Michio Tanamoto. NextInsight file photo.The impact is keenly felt this year, which is Year 1, resulting in the hotel arm incurring a US$1.4 million after-tax loss.
It would have been a pretax profit of US$0.6 million without IFRS 16 application.
With the addition of five hotels under its management by end-2020, the IFRS impact will be higher next year, totalling a negative US$4 million by Uni-Asia's estimate, and then dropping sharply to just negative US$1 million in 2021.
 CFO Lim Kai Ching. NextInsight file photo.Other 9M19 highlights: • Uni-Asia's fourth, fifth and sixth investment property projects in HK are currently under construction. Pre-sale of the fourth project is expected to start in 1H2020. Uni-Asia's plan to invest in a 7th property project in HK has now been put on on hold as a result of the unrest in HK. • Uni-Asia will redeploy funds earmarked for that 7th project to the development of small residential projects in Japan. There, Uni-Asia started 7 new projects and disposed of 7 completed projects in 9M19. • Cash on the balance sheet rose from US$46.7 million (end-Dec 2018) to US$57.3 million as at end-Sept 2019. • Total borrowings dropped from US$180.7 milion (end-Dec 2018) to US$143.6 million. • Net Asset Value per share stood at US$1.63 (approximately S$2.21) compared to a recent stock price of 74 Singapore cents. |
For the 9M19 Powerpoint materials, click here.
Watch this 3-min video of our visit to Uni-Asia's hotels and residential projects -->
