Developer United Industrial Corporation (UIC) posted lower full-year earnings due to a sharp drop in fair value gains on investment properties. Net profit fell 35 per cent to $260.6 million for the 12 months to Dec 31.
However, revenue climbed 16 per cent to $807.2 million on the back of higher turnover from the sales of trading properties, which were up 58 per cent to $291 million.
Progressive revenue recognition on the percentage of completion basis for residential projects also contributed to the higher turnover, said UIC in a Singapore Exchange filing yesterday.
Gross rental income from investment properties dipped 2 per cent to $271.1 million.
Contribution from associated companies dropped 25 per cent to $31.6 million, due mainly to lower fair value gain on Novena Square, an investment property.
The share of results of joint ventures decreased by 22 per cent due to lower progressive revenue recognised for the Archipelago residential project, which was completed last September.
AT A GLANCE
NET PROFIT: $260.6 million (-35%)
REVENUE: $807.2 million (+16%)
DIVIDEND: Three cents a share (unchanged)
The decrease was partially offset by higher progressive sales revenue for the substantially sold Thomson Three residential project.
Overall, net profit from operations increased by 6 per cent to $236.3 million. But the fair value gain on investment properties plunged 86 per cent to $24.3 million, resulting in a much lower net profit for the year.
Earnings per share was 18.6 cents, down from 28.7 cents a year earlier, while net asset value was $4.24 as at Dec 31, up from $4.09 as at Dec 31, 2014.
A first and final dividend of three cents a share was recommended.
Shareholders can choose to receive dividends in the form of scrip in lieu of cash.
UIC said in its results filing that the outlook for its various business segments will be challenging in the next 12 months.
"With the uncertain global economic outlook and the increase in office supply rolling out in 2016, office leasing demand is expected to remain weak," it said.
"Demand in the residential property market will continue to be soft with the Government indicating that the cooling measures are unlikely to be eased in the short term."
The Singapore retail market will continue to face challenges from online sellers and poor consumer sentiment, while the hotel industry is expected to remain competitive with increased supply of city hotels, it added. UIC shares closed two cents higher at $2.96 ahead of its earnings announcement.