UIC group’s full-year profit down by 71%

Straits Times: Sat, Feb 18
   PROPERTY development and investment group United Industrial Corporation (UIC) yesterday reported a 71 per cent drop in net profit to $214.2 million.  Revenue for the year ended Dec 31 fell by 33 per cent to $805.5 million due to lower sales of tra…

PROPERTY development and investment group United Industrial Corporation (UIC) yesterday reported a 71 per cent drop in net profit to $214.2 million.

Revenue for the year ended Dec 31 fell by 33 per cent to $805.5 million due to lower sales of trading properties and lower rental income.

This was partially offset by higher revenue from its information technology and hotel operations.

Although office occupancy rates have improved, UIC’s gross rental income fell by 3 per cent to $287.5 million as new leasing rates were lower than those of expired leases.

Progressive sales recognition of its trading properties slumped by 59 per cent to $287.4 million following the completion of two projects – One Amber and Grand Duchess – in April 2010 and Park Natura in May last year.

The group also said its share of operating results of associated companies fell by 22 per cent to $29.8 million, mainly due to the absence of a $14.2 million contribution from The Regency@Tiong Bahru which was fully sold and completed in March 2010.

UIC also shared a fair value gain of $11.4 million on Novena Square.

Earnings per share also took a tumble, from a restated 54 cents to 15.5 cents, even as net asset value per share rose marginally from a restated $2.71 to $2.86 as of Dec 31.

Commenting on its business outlook, the group said the increase in the supply of office space, coupled with the global economic uncertainty and the expected slower growth in Singapore, will likely impact market rentals for office space.

It added that the imposition of additional buyer’s stamp duty last December had also affected purchase sentiment in the residential property market.

But the group was more positive on the retail rental market, adding that it is expected to remain resilient with strong demand from international retailers and in suburban malls that are supported by large catchment areas.

An unchanged first and final dividend of three cents a share was proposed, to be paid on May 25.

The full-year results were relatively rosier at UIC’s unit Singapore Land.

Net profit for the property development company fell 51 per cent to $330.7 million.

Revenue, however, increased by 17 per cent to $615.3 million.

The improved performance was attributed to higher sales of trading property.

Sales of The Trizon residential project surged by 51 per cent to $250.7 million, due to additional units sold and a higher percentage of completion.

Pan Pacific Singapore hotel also contributed to higher revenue, thanks to an increase in room and occupancy rates and higher food and beverage revenue.

Earnings per share fell from a restated 163.4 cents to 80.2 cents.

Net asset value per share climbed by 63 cents to $10.63.

The firm has recommended an unchanged final dividend of 20 cents a share, to be paid on May 22.

Source: The Straits Times © Singapore Press Holdings Ltd.

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