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OUE and Fragrance Group expect net losses for H1 2020
TWO property companies - OUE and Fragrance Group - have flagged guidance of losses made in the first six months of this year.
OUE said that, following a preliminary review of its unaudited financial results for the first half ended June 30, the group is expected to record a loss attributable to shareholders for the first half, reversing from a net profit of S$61.9 million recorded a year ago.
The loss for H1 2020 is due mainly to the fair-value loss booked on disposal of about S$310 million in relation to the sale of the US Bank Tower and Westlawn Garage in Los Angeles, California.
The loss expected to be recorded for H1 2020 is also due to the adverse impact of the Covid-19 outbreak on the group, taking into account the tenant-support measures that the group has put into place for eligible tenants, including rental reliefs, rent deferment, rental rebates and flexible-payment schemes, as well as weaker performance from the hospitality division.
OUE will provide further details on the group&rsquo s financial performance when it releases its results by Aug 14.
Fragrance Group said that, based on the preliminary review of its draft financial results, it is expected to report a net loss for the six-month financial period ended June 30.
It is due to release its financial results by Aug 15.
Then why still want to sell?
OUE sells Los Angeles tower at below market value as pandemic hits tenants
Sale price is about two-thirds of the property' s US$650 million fair value as at Dec 31, 2019
PROPERTY developer OUE Ltd on Friday announced that it will sell US Bank Tower - known for its cameos in Hollywood movies and a sky-high outdoor glass slide - for US$430 million.
The sale price is about two-thirds of the property' s US$650 million fair value as at Dec 31, 2019. The price was arrived at after taking into account, among other things, the property' s market value and the current US property market conditions amid the Covid-19 pandemic.
OUE' s wholly-owned subsidiary Beringia Centra has signed a sale-and-purchase agreement with USBT Property Owner LP. The mainboard-listed company did not provide further details about the buyer, although it said on June 16 that it was in talks with a possible institutional buyer for the sale.
US media outlets in mid-June reported that New York-based real estate investor Silverstein Properties - whose portfolio includes the World Trade Center in New York - was in advanced discussions to buy US Bank Tower and negotiating a price in the US$425-450 million range.
Real Estate Alert reported then that initial expectations had been for bids to come in at around US$700 million.
The disposal is expected to reduce the OUE group' s earnings per share (EPS) by about S$0.35 for this fiscal year. This impact to EPS is mainly non-cash and arises from the difference between the sale price and the property' s book value as at Dec 31, 2019.
US Bank Tower is a Class A office property located in downtown Los Angeles at the foot of Bunker Hill. Completed in 1989, it has 72 floors of office space and six levels of underground parking.
Beringia had acquired the property in 2013 for about US$367.5 million, and undertook a series of asset enhancement works, including the launch of an open-air observation deck called OUE Skyspace LA with a 360-degree view from Hollywood Hills to the Pacific Ocean, as well as an outdoor glass slide 305 metres above ground.
In connection with the building' s sale, OUE also plans to sell its leasehold interest in OUE Skyspace LA.
Beringia, as the landlord, and OUE Skyspace LLC, a wholly-owned subsidiary of OUE, are parties to a lease which grants OUE Skyspace LLC the right to operate the observation deck.
While Beringia is engaged in discussions with " several" prospective purchasers of the Skyspace operations, no definitive agreement has been entered into for its sale, said OUE. Any sale of OUE Skyspace LA or transfer of the liquor licence separate from the sale of US Bank Tower will not affect the building' s price.
OUE said it entered into the strategic sale of US Bank Tower after evaluating its inventory of assets.
Although the property is being divested below its valuation, it is still expected to benefit the company and its shareholders, as it will enable the group to streamline its asset ownership in a period when the longer-term outlook for the US property market may not be favourable, OUE said.
Tenants in US Bank Tower have reduced or temporarily shuttered their operations due to measures implemented by US state governments in response to the Covid-19 pandemic. As a result, rental income from the property has been affected.
By unlocking capital from this divestment, OUE will be able to recycle its capital to " more optimally" pursue higher-growth reinvestment opportunities, it added.
Moreover, in the absence of opportunistic acquisition targets, the sale will in the meantime help the group substantially increase its cash reserves, improve its net gearing by paring existing debts and remaining nimble in the uncertain economic climate.
The transaction is scheduled to complete around September 2020.
OUE started marketing US Bank Tower last January. The iconic building was " blown up" in the 1996 blockbuster Independence Day and has been seen in numerous other films.
OUE Commerical Real Estate Investment Trust (OUE C-Reit), which had a right of first refusal, said it turned down the offer to buy the building because it would not be accretive to its distribution unit given the proposed terms.
OUE in talks with potential buyer for US Bank Tower
TUE, JUN 16, 2020 - 10:42 PMMAINBOARD-LISTED property group OUE is in talks for a potential sale of US Bank Tower in Los Angeles, the board disclosed in a bourse filing late on Tuesday.
OUE is now in &ldquo non-binding exploratory discussions&rdquo with a possible institutional buyer, said the update. Marketing of the property (primarily in the United States) started in January 2019.
But the board told shareholders that, while negotiations are now underway, there is no assurance that these talks will lead to a definitive or binding agreement.
&ldquo The company will make an appropriate announcement in the event of entry into any definitive agreement in relation to the proposed sale,&rdquo the board said.
OUE noted in a business update in mid-May that global public-health policies taken to contain the deadly novel coronavirus had had a negative near-term financial impact.
The effects of the coronavirus pandemic have included a shutdown of most of the tenants&rsquo offices in US Bank Tower, which OUE bought for US$367.5 million in 2013.
OUE shares closed up by S$0.03, or 2.61 per cent, at S$1.18 on Tuesday, before the news.
OEL enters into joint venture to manufacture and market ultrasound machine that decreases cost of care for patients with tumours
Joint ventures and alliances
Felicia Tan 9/06/2020, 2:59pm
SINGAPORE (June 9): OEL (Holdings), the provider of various engineering, trading, and contracting solutions, has entered into a joint venture agreement (JVA) with Shanghai Suntec to manufacture and market High-Intensity Focused Ultrasound (HIFU) machines on Tuesday.
Both companies will jointly manufacture and distribute the machines, as well as provide installation, medical, and equipment after-sales services under its joint venture company in Singapore (JV Company).
The JV Company will manufacture the HIFU machine, while the medical team at Shanghai Longjian Hospital Management (Shanghai Longjian) will oversee the machines&rsquo medical services such as medical training, remote surgery guidance, and purchase material.
The JV Company, which is 80% owned by OEL&rsquo s wholly-owned subsidiary, AJJ Health Care Management (AJJ), and 20% by Shanghai Suntec, will be registered with an initial issued and paid up capital of $100 comprising of 100 ordinary shares.
HIFU is a procedure in which high-energy sound waves are aimed directly at an area of abnormal cells or tissue in the body. The waves create heat that kills the cells. It is said to be able to improve the quality of life and decrease the cost of care for patients with tumours, such as cancer patients.
Its technology uses 3D image precision to treat large areas of medical conditions within a shorter period of time, with less discomfort. It is said to kill tumours with little to no pain, and no side effects on vital organ functions, amongst other benefits.
HIFU is currently being studied in the treatment of prostate cancer and other types of cancer and diseases. Shanghai Longjian&rsquo s medical team is also currently using HIFU technology for cancer treatments in China.
As at 2.55pm, OEL shares are changing hands flat at 2.5 cents.
Both companies will jointly manufacture and distribute the machines, as well as provide installation, medical, and equipment after-sales services under its joint venture company in Singapore (JV Company).
The JV Company will manufacture the HIFU machine, while the medical team at Shanghai Longjian Hospital Management (Shanghai Longjian) will oversee the machines&rsquo medical services such as medical training, remote surgery guidance, and purchase material.
The JV Company, which is 80% owned by OEL&rsquo s wholly-owned subsidiary, AJJ Health Care Management (AJJ), and 20% by Shanghai Suntec, will be registered with an initial issued and paid up capital of $100 comprising of 100 ordinary shares.
HIFU is a procedure in which high-energy sound waves are aimed directly at an area of abnormal cells or tissue in the body. The waves create heat that kills the cells. It is said to be able to improve the quality of life and decrease the cost of care for patients with tumours, such as cancer patients.
HIFU is currently being studied in the treatment of prostate cancer and other types of cancer and diseases. Shanghai Longjian&rsquo s medical team is also currently using HIFU technology for cancer treatments in China.
As at 2.55pm, OEL shares are changing hands flat at 2.5 cents.
OUE Q1 net profit jumps to S$87.1m
FRI, MAY 15, 2020 - 7:51 PMMAINBOARD-LISTED property group OUE&rsquo s first-quarter earnings swelled with help from currency gains on the greenback and higher mark-to-market fair-value gains on certain investments, it said in an interim business update on Friday.
Since then, though, its investment and hospitality divisions have taken a hit from the novel coronavirus pandemic, going by the presentation slides put up on the Singapore Exchange website.
Net profit jumped to S$87.1 million for the three months to March 31, from S$1.0 million in the year before, while revenue increased by 26.4 per cent to S$186.2 million.
The rise in turnover was on the back of contributions from the Mandarin Gallery mall, after the merger between real estate investment trusts OUE Commercial Reit and OUE Hospitality Trust, as well as higher sales completion at the OUE Twin Peaks project.
These gains more than made up for the weaker showing in hospitality, as well as the lack of revenue from the serviced apartment business, which was sold off at the end of last year.
Net asset value was S$4.67 a share as at end-March, against S$4.52 as at Dec 31, 2019.
Still, the measures to contain the coronavirus rolled out in OUE&rsquo s operating markets of Singapore, the United States and China &ldquo have negative near-term financial impact&rdquo , OUE told investors.
&ldquo The group is focusing on cost management, cash conservation and maintaining financial flexibility in (the) current environment,&rdquo the group reported, stressing that it has suspended &ldquo non-essential capital and operating expenditure&rdquo across its various business units.
Singapore investment property assets face a longer leasing lead time and disruption in activities such as viewings and handovers, as well as a decline in shopper traffic.
Most of the tenants&rsquo offices in the US Bank Tower in Los Angeles are closed amid a shutdown of non-essential workplaces. Lippo Plaza in Shanghai has faced extended office hours and shorter retail hours, although there has been a gradual return to normal operations there since end-March.
Meanwhile, the Mandarin Orchard and Crowne Plaza Changi Airport hotels are expected to clock a year-on-year drop in overall occupancy and food and beverage and banquet business - even though OUE noted in its presentation that it still cannot determine the full extent of the pandemic&rsquo s toll on hospitality revenue will be.
The counter added S$0.01, or 0.9 per cent, to S$1.12, on a cum-dividend basis on Friday, before the interim business update was released.
https://www.businesstimes.com.sg/companies-markets/oue-q1-net-profit-jumps-to-s871m
OUE, OUE C-Reit offer relief, rebates to tenants
THU, APR 02, 2020 - 5:50 AMSingapore
PROPERTY group OUE has joined a string of landlords in Singapore offering rental reliefs to tenants amid poor business brought on by the novel coronavirus outbreak.
OUE and the manager of OUE Commercial Real Estate Investment Trust (OUE C-Reit) on Wednesday said retail...
https://www.businesstimes.com.sg/companies-markets/oue-oue-c-reit-offer-relief-rebates-to-tenants
I won' t be telling here else kena hammered. Paisei.
noslen ( Date: 19-Mar-2020 13:10) Posted:
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Next prediction? Let's see whether can get at 80cts....
TA_Expert ( Date: 19-Mar-2020 11:38) Posted:
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My prediction came through. Oh man........
noslen ( Date: 19-Mar-2020 10:29) Posted:
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Now that it's below $1, i scare.... better wait for the run up then chase... like no safety net now that they stop buyback.
TA_Expert ( Date: 16-Mar-2020 22:35) Posted:
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I' ll answer your question when the virus in Europe & US has peaked & shares are at their rock bottom before resuming their climb. wyeo.
But will they able to continue fill those properties?
ytthong1951 ( Date: 18-Mar-2020 16:36) Posted:
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So close.... maybe will queue below $1 tomorrow.
I too want to vomit blood, but I take consolation in these ppties: Orchard Mandarin, Crowne Plaza Airport ...., Oue Bayfront, Oue Downtown less Oakwood,1 Raffles Place, Shanghai Plaza, 23 units
condo. Leonie Hill, US Bank Tower, Lands in Jakarta, KL, Chengdu etc. The nav of 4.52 is made of solid ppties & land, unlike ships or aeroplanes or businesses that depreciate quickly in a melt-down.
wyeo.
condo. Leonie Hill, US Bank Tower, Lands in Jakarta, KL, Chengdu etc. The nav of 4.52 is made of solid ppties & land, unlike ships or aeroplanes or businesses that depreciate quickly in a melt-down.
wyeo.
Jia latz...this makes me vomit blood....
Want to ' fight' again. No lah, I' ve no time now because the stocks are falling. Next time when I' m free we ' ll meet to spar again. wyeo
You very naughty...... 
noslen ( Date: 16-Mar-2020 22:32) Posted:
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Hahaha... stir shit must quote u hahaha.... Bought too fast at 1.23 last week then got out at 1.21 today. Small losses and may go in if reach $1 but right now have other fishes to catch.
TA_Expert ( Date: 16-Mar-2020 18:19) Posted:
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Bro, why quote me? I don' t want to be shot by the die hard fan lei.
Anyway, are you buying? Lelong sale, bettter than great Singapore sale.
Anyway, are you buying? Lelong sale, bettter than great Singapore sale.
noslen ( Date: 16-Mar-2020 16:55) Posted:
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