United Industrial Corporation (UIC) lifted net profit in the first quarter despite a sharp fall in revenue, it reported yesterday.
Earnings came in at $60.24 million for the three months to March 31, up 1 per cent from a year earlier.
Revenue went the other way, falling 37 per cent to $165.65 million due to lower sales recognition from trading properties.
The decline was offset a little by a 43 per cent reduction in selling and distribution costs to $4.93 million, as well as an improvement in the group's share of results of associated companies and joint ventures.
Profit before share of results of associated companies and joint ventures was $63 million, which was lower than last year's by $6 million or 9 per cent, in line with reduced contribution from property trading.
UIC said the impact was offset by the absence of the one-off $14.8 million in additional buyer's stamp duty. It paid this for high-end condominium Mon Jervois in February last year when it could not finish selling the project within five years from the land purchase.
The group's share of results of joint ventures surged 197 per cent to $9.99 million, mainly due to the contribution from The Clement Canopy residential project, which was launched for sale in February last year. The share of results of associated companies grew 15 per cent to $7.77 million.
AT A GLANCE
REVENUE: $165.7 million (-37 per cent)
NET PROFIT: $60.2 million (+1 per cent)
Earnings per share was unchanged at 4.2 cents while net asset value per share was $4.60 compared with $4.56 as at Dec 31.
UIC's portfolio in Singapore comprises commercial, retail and hotel properties as well as unsold units in high-end condominium projects. It also owns property in the Chinese cities of Shanghai, Beijing and Tianjin, as well as in London.
It acquired a residential collective sale site at Potong Pasir in October 2016 with UOL Group. A project expected to have 729 residential units is likely to be launched this year.
With private residential prices in Singapore inching up, UIC said it "will strive to build up residential land bank in a competitive market".
UIC has been partnering with UOL Group, which owns 49.8 per cent of UIC, in government land sale tenders, the most recent being the 99-year leasehold site at Silat Avenue. The consortium comprising UOL, UIC and Kheng Leong Company, which is the family firm of United Overseas Bank chairman emeritus Wee Cho Yaw, tabled the lone bid of $1.04 billion or $1,138 per sq ft per plot ratio for the huge site on Thursday.
In the office sector, UIC noted that the strong take-up rate last year is expected to be sustained with improving business confidence.
"However, existing offices will need to upgrade to meet changing working requirements in order to avoid rate erosion.
"Despite positive economic outlook, retail rental will continue to face pressure and competition from new and upgraded malls and online shopping," it added.
UIC said it expects the hotel sector to remain steady despite new hotels vying for market share and rising costs of operation.
UIC shares closed up 1.55 per cent to $3.27 yesterday.