United Engineers continued to face a choppy environment in the third quarter, with its property business again a drag on performance.
However, the engineering and property firm was able to report higher net profits in the period, thanks mostly to business divestments.
Earnings for the three months to Sept 30 jumped to $134.7 million, from $18.6 million a year earlier as United Engineers registered divestment gains of about $122 million, after completing the sales of UES Holdings and various environmental technology assets in China.
Quarterly revenue from ongoing operations was $101.7 million, down 43 per cent year on year.
The decline partly resulted from a 94 per cent drop in property development revenue to just $4.5 million, "mainly due to lower revenue recognition from the property sales at Eight Riversuites", United Engineers said in its results announcement yesterday.
AT A GLANCE
$101.7 million (-43%)
$134.7 million (+625%)
NET ASSET VALUE PER SHARE:
$3.06 (vs $2.97 as at Dec 31, 2015)
Manufacturing revenue also fell, down 5 per cent to $20.3 million, and the flattish engineering and distribution revenue of $35.5 million - almost unchanged from $34.9 million a year ago - was hardly a boost.
Earnings per share was 21.1 cents in the third quarter, up from 2.9 cents a year ago. Net asset value was $3.06 a share as at Sept 30, up from $2.97 at the end of last year.
The third-quarter weakness reflected the persistent headwinds faced by United Engineers. Revenue for the nine months to Sept 30 was $358.2 million, down 49 per cent from a year earlier.
Nine-month property development revenue slumped 85 per cent to $55.8 million, while engineering revenue in the same period dropped 8 per cent to $99.6 million.
United Engineers expects a choppy outlook as the property markets in Singapore and China remain bumpy. "The global economic slowdown and the weaker economic outlook in Singapore, coupled with the sustained impact of the property cooling measures, will continue to weigh on the sentiment of the property markets in Singapore," the mainboard-listed firm cautioned.
It added that its China property division will also face challenging conditions, as property market recovery there is still patchy.
United Engineers shares closed two cents, or 0.75 per cent, lower at $2.64 yesterday, ahead of the results announcement.