UOL Group posted a 74% fall in first quarter net profit to $87.9 million from $331.8 million in Q109.

This was largely due to the $277.7 million arising from negative goodwill on acquisition of interests in an associated company in Q1 last year, and the absence of such gains in the quarter ended March 31, 2010.

But pre-tax profit rose 55% to $109.5 million, on the back of a 27% rise in revenue to $249.2 million, reflecting better performance from its three core businesses – property development, property investments and hotel operations.

For the quarter under review, revenue from property development posted a 48% increase to $130.4 million from $88 million as UOL continued to see higher progressive revenue recognition from the sale of its projects. The two new projects launched in 2009 i.e. Double Bay Residences and Meadows @ Peirce are now fully sold.

Property investments rose 4% to $36.6 million compared with $35.2 million in 1Q09, held up by high occupancy rates and stable rental income despite the challenges weighing on the office market. Hotel operations improved markedly in tandem with the recovery of the tourism sector.

Revenue from hotel operations increased 12% to $77.7 million as revenue per available room improved across most of the group’s hotels. Management services also saw a 19% jump in revenue to $4.6 million compared with $3.9 million in the previous corresponding period.

Share of profits of associated companies rose 79% to $43.3 million mainly due to the full quarter’s share of profit from UIC and the higher profit recognition from the sale of units in Nassim Park Residences and One Amber.

UOL’s gearing ratio declined to 40.7% from 43.1% previously due to reduction in net bank borrowings from the proceeds from sales of the Group’s development properties.