Lower operating losses from property development and a surge in earnings from the engineering and distribution business delivered positive numbers for United Engineers in the first quarter.
It racked up net profit of $9 million in the three months to March 31, 3 per cent higher than a restated $8.72 million in the same period last year.
Revenue was $105.25 million, down 1 per cent from a restated $106.11 million last year after retrospective adjustments arising from the new SFRS financial reporting framework.
Turnover from property rental and hospitality fell 5 per cent from a year earlier to $31.3 million. Operating profit before interest for the division also fell 5 per cent to $16.4 million on lower revenue and profit contribution from UE BizHub West.
UE BizHub West had initially been flagged for possible redevelopment, but UE said last month that it may be better to carry on operations for now.
Property development revenue dipped 2 per cent to $12.7 million, with operating losses narrowing 81 per cent to $500,000 on the back of higher contributions from the sale of property units from completed phases of Chengdu Orchard Villa.
AT A GLANCE
REVENUE $105.2 million (-1%)
NET PROFIT $9 million (+3%)
Engineering and distribution revenue rose 7 per cent to $29.9 million on higher contribution from UE's systems integration business, O'Connor's.
Operating profit for the division tripled to $2.7 million, due mainly to project completion with higher profit margins from O'Connor's.
Turnover for the manufacturing business fell 11 per cent to $19 million, while operating profit fell 78 per cent to $200,000 in the first quarter from $900,000 last year.
UE explained that certain existing precision engineering manufacturing programmes had reached their end of life, whereas new programmes had yet to reach mass production volumes.
Earnings per share was 1.4 cents, unchanged from the same period a year earlier, while net asset value per share was $3.11 as of March 31, up from $3.09 as of Dec 31.
UE said in a statement: "The group intends to embark on asset enhancement initiatives for its investment properties in Singapore and may make selective acquisitions if and when such opportunities arise."
Last month, UE told shareholders that it aims to spruce up UE BizHub CITY, formerly UE Square, to raise the efficiency of its net lettable area.
UE said of its China projects: "In China, the property cooling measures have brought about a relative slowdown in activity in certain cities, but the demand for good-quality housing remains and the property market may continue to see sustainable growth in the longer term."
UE shares closed unchanged at $2.67 yesterday before results were announced after market close.