Annual Report 2014
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ANNUAL REPORT 2014 STRONG FOUNDATIONS STRATEGIC GOALS STRONG FOUNDATIONS STRATEGIC GOALS We have a resilient track record of over 50 years, backed by strong foundations and well-mapped strategies. Our building blocks of success are achieved through our foresight and focus on growing the three core businesses of property development, property investments and hotel operations. CONTENTS Vision/Mission/Core Values Group Business 12 Sustainability 62 About Us 01 Corporate Information 13 Geographical Presence 66 Robust Drivers Highlights 14 Property Summary 2014 68 Rewarding Returns 02 Chairman's Statement 16 Simplified Group Distinctive Products Board of Directors 18 Financial Position 73 Dynamic Brands 04 Key Management Executives 22 Five-year Financial Summary 74 Underlying Resilience Awards & Accolades 24 Segmental Performance Analysis 76 Unifying Strengths 06 Operation Highlights 26 Value-added Statement 78 Financial Highlights 08 Corporate Governance Report 42 Business at a Glance 10 Stakeholders Communications 60 VISION A robust property group dedicated to creating value, shaping future. MISSION Driving Inspirations, Fulfilling Aspirations. CORE VALUES Passion drives us Innovation defines us Enterprise propels us Corporate Social Responsibility shapes us People, our leading asset ABOUT US UOL Group Limited (UOL) is one of Singapore’s leading public-listed property companies with an extensive portfolio of development and investment properties, hotels and serviced suites. With a track record of over 50 years, UOL strongly believes in delivering product excellence and quality service in all our business ventures. Our list of property development projects includes residential units, office towers and shopping malls, hotels and serviced suites. Our unwavering commitment to architectural and quality excellence is reflected in all our developments, winning us prestigious prizes such as the FIABCI Prix d’Excellence Award, Aga Khan Award for Architecture, Urban Land Cover: OneKM Institute Awards for Excellence and President’s This Page: Pan Pacific Serviced Suites Beach Road and The Plaza Design Award. UOL, through our hotel subsidiary Pan Pacific Hotels Group Limited (PPHG), owns two acclaimed brands namely “Pan Pacific” and PARKROYAL. PPHG now owns and/or manages over 30 hotels in Asia, Oceania and North America with over 9,800 rooms in its portfolio. Even as we venture into new markets, we stay true to our core values, building on Passion, Innovation, Enterprise, Corporate Social Responsibility and People. 1 2 ROBUST DRIVERS REWARDING RETURNS We have a robust business model to broaden our income drivers in response to market changes. We continue to explore investment opportunities, both in Singapore and overseas, for market diversification and sustainable growth to enhance shareholder value. Seventy Saint Patrick's (artist's impression) 3 4 DISTINCTIVE PRODUCTS DYNAMIC BRANDS We have built a reputation for creating distinctive and innovative products. Therefore, we are able to leverage our brand equity to extend our geographical footprint. PARKROYAL on Pickering 5 6 UNDERLYING RESILIENCE UNIFYING STRENGTHS We have a resilient business model that considers the environment and communities we operate in. With a combination of sound business practices and high standards of corporate governance, we aim to build a socially responsible company. Novena Square 7 FINANCIAL UOL GROUP HIGHLIGHTS LIMITED Revenue Profit Before Income Tax Net Attributable Profit $1.36b $837.0m $686.0m Rose 29% from FY2013’s $1.06b Decreased 12% from FY2013’s Decreased 13% from FY2013’s $952.0m $785.8m Dividend Per Share Earnings Per Share 15 cents 88 cents First and final of 15 cents (FY2013’s Decreased 14% from FY2013’s $1.02 dividend was 20 cents) Increase/ 2014 2013 (Decrease) Two-year Financial Highlights $’000 $’000 % For the financial year Revenue 1,360,719 1,058,608 29 Profit before income tax 836,966 951,951 (12) Profit after income tax and non-controlling interests 685,996 785,820 (13) Return on equity (%) 8.98 11.63 (23) At 31 December Share capital 1,151,512 1,050,897 10 Reserves 977,032 855,311 14 Retained earnings 5,514,185 4,853,490 14 Shareholders’ funds 7,642,729 6,759,698 13 Total assets 11,848,461 10,421,448 14 Per ordinary share Basic earnings before fair value and other gains (cents) 51.0 44.7 14 Basic earnings (cents) 88.0 102.0 (14) Gross dividend declared (cents) 15.0 20.0 (25) Dividend cover (times) 5.8 5.1 14 Net tangible asset backing ($) 9.68 8.73 11 8 ANNUAL REPORT 2014 Return On Equity Gearing Ratio Interest Cover Ratio 8.98% 0.34 15x Decreased 23% from FY2013’s 11.63% Increased 21% from FY2013’s 0.28 Improved from FY2013’s 12x Shareholders’ Funds Total Assets $7.64b $11.85b Increased 13% from FY2013’s $6.76b Increased 14% from FY2013’s $10.42b 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Quarterly Result $’000 % $’000 % $’000 % $’000 % $’000 % Revenue 2014 408,776 30 213,618 16 433,542 32 304,783 22 1,360,719 100 2013 247,784 23 304,313 29 261,846 25 244,665 23 1,058,608 100 Profit before income tax 2014 191,106 23 242,699 29 124,306 15 278,855 33 836,966 100 2013 92,601 10 516,679 54 113,074 12 229,597 24 951,951 100 Net profit 2014 154,980 20 231,066 31 108,533 14 265,696 35 760,275 100 2013 77,672 9 501,038 57 98,823 11 203,931 23 881,464 100 Profit after income tax and non-controlling interests 2014 120,825 18 211,722 31 102,567 15 250,882 36 685,996 100 2013 71,688 9 431,395 55 93,514 12 189,223 24 785,820 100 Basic earnings per ordinary share (in cents) 2014 15.7 18 27.4 31 13.2 15 31.7 36 88.0 100 2013 9.3 9 56.0 55 12.1 12 24.5 24 102.0 100 9 BUSINESS AT UOL GROUP A GLANCE LIMITED Revenue by Business Segment The Group’s key revenue drivers are property development, property investments and hotel operations. 50% Property Development 15% Property Investments 32% Hotel Operations 1% Management Services 2% Investments Profit From Operations by Business Segment 37% Property Development 34% Property Investments 18% Hotel Operations 4% Management Services 7% Investments Revenue Pre-tax Profit (Before Fair Value and Other Gains) $1.36b $515.2m Increase mainly from property +29% Increase mainly due to higher profits from +21% development revenue all segments, lower finance expenses and (y-o-y) higher share of profits from associated (y-o-y) and joint venture companies Net Attributable Profit Return On Equity $686.0m 8.98% Decrease mostly due to -13% -23% lower fair value gains (y-o-y) (y-o-y) 10 ANNUAL REPORT 2014 Property Development Property Investments Hotel Operations Revenue (+65%) Revenue (+10%) Revenue (+4%) 2014 $675.9m 2014 $198.2m 2014 $437.6m 2013 $410.0m 2013 $180.2m 2013 $420.4m Profit from Operations (+10%) Profit from Operations (+9%) Profit from Operations (+10%) 2014 $146.5m 2014 $137.3m 2014 $72.6m 2013 $133.2m 2013 $126.4m 2013 $66.3m UOL is committed to design and UOL’s owned and managed investment Through PPHG, UOL owns “Pan quality excellence as reflected in its properties include commercial offices, Pacific” and PARKROYAL brands. award-winning residential homes. retail malls and serviced suites. PPHG owns and/or manages over 30 hotels, resorts and serviced suites Key Facts Key Facts in Asia, Oceania and North America. • Sale of 493 residential units • Five commercial offices – Novena Key Facts with a total value of more than Square, United Square, Odeon $581 million Towers, Faber House and One • Pan Pacific’s portfolio comprises Upper Pickering, with a total net • Launched two projects 21 hotels and serviced lettable area of 98,970 sqm – Riverbank@Fernvale and suites, including those under development Seventy Saint Patrick’s • Two themed shopping malls – Velocity@Novena Square and • Acquired land parcel on Upper • PARKROYAL’s portfolio United Square, with a total net Paya Lebar Road for a sum of comprises 16 hotels, resorts and lettable area of 35,505 sqm $392.3 million serviced suites, including those under development • Opened third themed mall, • Completed sale of the freehold OneKM, with a total net lettable land at Jalan Conlay for a • PARKROYAL Nay Pyi Taw and area of 19,429 sqm consideration of RM568 million Pan Pacific Tianjin were officially opened ($220 million) • Four serviced suites properties – Pan Pacific Serviced Suites • Clinched Prince Charles Crescent • PPHG signed a management Orchard, Pan Pacific Serviced site through a 70:30 joint venture agreement with Gagasan Suites Beach Road, PARKROYAL for a sum of $463.1 million Langkawi Sdn. Bhd to open Serviced Suites, Singapore and PARKROYAL Langkawi Resort, • Acquired the site on Bishopsgate PARKROYAL Serviced Suites which features 253 rooms and in London, United Kingdom for a Kuala Lumpur totalling 683 units nine villas sum of £97 million ($201 million) • Largest single stakeholder, • PPHG opened new Global Sales owning 43.9% stake of listed Office in Beijing, complementing company United Industrial its existing one in Shanghai Corporation Limited (UIC) • Holds 25.0% stake in • Holds 22.7% stake in Marina Aquamarina Hotel Private Limited Centre Holdings Pte Ltd which which owns Marina Mandarin has interests in Marina Square Shopping Mall, Mandarin Oriental, Marina Mandarin and Pan Pacific Singapore 11 GROUP UOL As at 2 March 2015 GROUP BUSINESS LIMITED UOL GROUP LIMITED Property Property Hotel Management Investments Development Investments Operations Services Residential Commercial Hotel Developments Properties/ Investments Serviced Suites Wholly-owned Wholly-owned Wholly-owned Project Investment in projects properties hotels Management Securities Joint venture Joint venture Joint venture Facilities projects properties hotels Management United Industrial Aquamarina Hotel and Corporation Hotel Private Other Limited3 Limited2 Management (43.9%) (25.0%) Marina Centre Holdings Pte Ltd1 (22.7%) Notes: 1 Marina Centre Holdings Pte Ltd has interests in Marina Square Shopping Mall, Pan Pacific Singapore, Mandarin Oriental and Marina Mandarin.