OUE

OUE: FY11 results slightly below Deutsche’s estimates, but special dividend a positive surprise.
Reported net profit was $335.7m, -57% yoy.
However, core net profit was $93m, +20% yoy, adjusting for revaluation and one-off gains.
The co. declared an 8cts special div, bringing total div to 11cts, implying 4.4% yield.
Net gearing rose from 55.5% to 57.9% after share buybacks (~7% of total shares repurchased at >$150m).

Revenue grew 54% yoy to $332.4m, driven by the hospitality and invmt property divisions.
All hotels, incl the recently acq Crowne Plaza Changi enjoyed improved performance which supported a 25% yoy increase in hospitality revenue (65% of FY11 revenue).
Invmt property income surged 178% due to full contribution from DBS Building and OUE Bayfront. Nevertheless, office leasing activity has slowed, and occupancy of OUE Bayfront rose marginally from 80.7% to 82.3%, while DBS Building was unchg at 91%.
For residential, sales at Twin Peaks have come to a standstill, with only one unit sold in 4Q11 (50 out of 462 units sold to date), below mgt’s initial target.
Deutsche keeps at Sell with TP $1.96.
Analyst briefing to be held later today.