UIC reports 26% rise in net earnings to $398 million

SINGAPORE - Higher trading property sales and increased revenue from hotel operations boosted earnings at United Industrial Corporation (UIC).

Net profit rose 26 per cent to $398 million for the 12 months to Dec 31 while revenue gained 14 per cent to $693.2 million.

Sales of trading properties were up 53 per cent to $184.2 million.

Progressive sales recognition for UIC's V on Shenton, Alex Residences and Mon Jervois projects were partially offset by lower sales at The Trizon, which was fully sold in the first quarter of 2014.

Revenue from hotel operations rose 12 per cent to $147.3 million on the back of higher room and occupancy rates and increased food and beverage turnover at the Pan Pacific Singapore hotel.

Gross rental income from investment properties gained 2 per cent to $275.6 million.

But contribution from associated companies fell 38 per cent to $42.1 million due to a lower share of fair value gains on an investment property.

Revenue from joint ventures went up however, gaining 91 per cent to $37.2 million. This was for the Archipelago and Thomson Three projects, for which development profits were progressively recognised.

The group noted that office rents are likely to grow at a gradual pace, given the lack of new office space in the short term. However, property cooling measures will mean slower sales for the group, it added.

"Escalating operating costs amidst a tight labour market and increasing popularity of online shopping will restrain retail rental growth," UIC said.

"The hotel industry is expected to remain competitive against the backdrop of new hotel rooms supply and slower visitor growth."

Earnings per share was 28.7 cents at Dec 31, up from 22.9 cents, while net asset value was $4.09 at Dec 31, up from $3.61 a year earlier.

A first and final dividend of three cents a share was recommended.