Hi Rusmin and Victor,
I would like to ask a question regarding UOL’s ROE.
To calculate UOL’s ROE for 2014-2016, I used Profit after income tax and non-controlling interests and divided it by Shareholders’ funds
However, when I did the same calculation for 2017, I derived a different ROE number from the annual report.
2014 ROE: 685,996 / 7,642,729 = 8.98 %
2015 ROE: 391,389 / 7,894,175 = 4.96 %
For 2014 and 2015, Page 10 https://www.uol.com.sg/wp-content/uploads/uol-reports/files/uol_annual_report_2015.pdf
2016 ROE: 287,040 / 8,127,154 = 3.53 %
2017 ROE: 891,009 / 9,445,120 = 9.43 % (The ROE is given in the annual report as 10.14%. I have no idea why. There must be something I did not consider)
For 2016 and 2017, Page 14 https://www.uol.com.sg/wp-content/uploads/uol-reports/files/UOL_Annual_Report_2017.pdf
Can you assist me please? Thank you.
Do not focus too much on what figure the management give you. You have to calculate your own ROE.
The earnings should be profit attributed to shareholders excluding non-controlling interest. Please see my calculation below:
Equity holders of the Company: $891m
Other gains/(losses): $524.6m (This are one off item that should be remove)
Fair value gains/(losses) on investment properties: $15.6 (This are one off item that should be remove)
Hence the real earning for UOL is $350.8m ($891m-$524.6m-$15.6m). The equity is $9445.1m, hence the ROE for 2017 is 3.7%.
Equity holders of the Company: $287m
Other gains/(losses): negative $23.3m (This are one off item that should be added back)
Fair value gains/(losses) on investment properties: negative $9.7m (This are one off item that should be added back)
Hence the real earning for UOL is $320m ($287m+$23.3m+$9.7m). The equity is $8127.2m, hence the ROE for 2016 is 3.9%.
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