OUE has reported a loss of $207.2 million for its 1HFY20 ended June 30, versus earnings of $61.9 million in the year-earlier period. 

The bottomline of the developer was hit by fair value loss of $310 million as a result of selling its office asset in Los Angeles, the US Bank Tower, for US$430 million, which was below its book value.

The property was put up for sale since early last year and the sale was finally announced last month.

Revenue in the same period was down by 28% y-o-y to $311.4 million.

OUE suffers from a general weakness across its various business divisions. 

For example, its hospitality division reported revenue of just $49.6 million, down from $110.7 million for 1HFY19, due to lower room occupancy, lower banquet sales as travel came to a standstill amid the Covid-19 outbreak.

“The group’s key priorities to mitigate the uncertain business and economic outlook include implementing cost management, cash conservation, and maintaining financial flexibility, such as by suspending nonessential capital and operating expenditure across the properties,” says OUE in its earnings commentary.

No dividend was declared for 1HFY20. In contrast, the company paid one cent per share for 1HFY2019.

As at June 30, OUE’s net asset value was $4.25 per share, down from $4.52 as at Dec 31 2019.

OUE shares closed at Aug 4 at $1.21, up 3.42% for the day but down by nearly a-fifth year to date.