United Engineers profit up on divestments

United Engineers (UEL) has posted a full-year net profit of $140.6 million, up 38 per cent from a year ago, due largely to divestment gains from the disposal of its technology and environmental engineering businesses.

The sales of tech company Multi-Fineline Electronix and environmental engineering firm UES Holdings helped UEL record $123 million in divestment gains in the 12 months ended Dec 31 last year, and brought attributable profit from discontinued operations to $113.2 million.

With the exit of these businesses, UEL's continuing operations comprise property rental, hospitality, property development, engineering and distribution, as well as manufacturing.

Revenue in the 12 months was $479.7 million, down 44 per cent from the same period a year earlier, due mainly to lower takings from property development after the completion of Eight Riversuites.

As a result of the divestments, net profit from continuing operations fell 62 per cent from a year ago to $27.4 million.

  • AT A GLANCE

  • REVENUE: $479.7 million (-44%)

    NET PROFIT: $140.6 million (+38%)

    DIVIDEND PER SHARE: 12 cents (+50%)

Earnings per share from continuing operations was 4.3 cents, down from 11.2 cents a year earlier, while net asset value per share as Dec 31 last year was $3.06, up from $2.97.

UEL did not provide earnings on a quarterly basis.

UEL has declared a payout of 12 cents per share for common stock holders, comprising a five cents per share final dividend and a special dividend of seven cents per share.

A 7.5 cents dividend per preference share has also been proposed, unchanged from a year ago.

UEL said in a statement that the weaker economic outlook will continue to weigh on sentiment in Singapore's real estate market, while its China property division will continue to face challenging operating conditions against a patchy property market recovery.

It also noted that the accounting treatment on revenue recognition for certain projects using the "completion-of-construction method" will result in volatility in turnover and profit recognition.

"Rental income from the group's portfolio of investment properties will help reduce this volatility but the group is likely to face downward pressure on rental income in Singapore, given the growing supply of office, industrial and retail space amid softening demand," UEL said.

The counter closed two cents or 0.68 per cent down at $2.91 before earnings were posted.

A version of this article appeared in the print edition of The Straits Times on February 28, 2017, with the headline 'United Engineers profit up on divestments'. Print Edition | Subscribe