United Engineers Q2 net profit jumps on revaluation gains

SINGAPORE - United Engineers (UE) has posted a net profit for continuing operations of S$45.3 million in the second quarter, up 303 per cent from a year earlier owing to revaluation gains from the group's investment property assets.

Revenue in the three months ended June 30 rose 9 per cent to S$121.9 million, led by a pick-up in China property sales.

Earnings per share for continuing operations was 7.1 Singapore cents, up from 1.8 Singapore cents a year ago.

Net asset value per share was S$3.02 as at June 30, from S$3.06 as at Dec 31 last year.

Group managing director Norman Ip said in an exchange filing on Friday (Aug 11): "In view of the global economic slowdown and geopolitical risks, the Group has been cautious in embarking on new development projects after the completion of Eight Riversuites in 2016.

"However, we saw a pick up in our China property sales in Chengdu during the quarter and this is in line with the group's current strategy to diversify its property operations across Singapore and China."

Last month, a Yanlord Perennial consortium bought a 33.5 per cent stake in UE at S$2.60 a share, triggering a mandatory conditional offer at the same price.

That price is far below the levels UE has traded at this year, which will make it difficult for Yanlord Perennial to cross the 50 per cent mark it needs to make its offer unconditional.

Besides, Yanlord Perennial has said it intends to keep UE listed.

Separately, Oxley Holdings has been buying up UE shares in the open market, at prices above S$2.60 a share.

As of Friday (Aug 11), Oxley held an 8.98 per cent stake in UE. Oxley deputy CEO Eric Low has a direct interest in 1.02 per cent of UE, bringing his total interest to 10 per cent.

Oxley has said it will not make a competing offer for UE. Rather, the purchases were made as part of its investments in income-generating assets.

UE's independent financial adviser is expected to advise shareholders on the Yanlord Perennial offer by next Tuesday (Aug 15).

The counter fell two cents or 0.74 per cent on Friday to close at S$2.69 before the earnings were announced after the market close.