UIC Q3 net profit rises 9% to S$65.3m

20151031-bt-uic-q3-net-profit-$6.53m-pic Group expects CBD office demand to remain 'subdued and steady'

UNITED Industrial Corporation (UIC) has posted a net profit of S$65.28 million for the third quarter ended Sept 30, 2015, up 9 per cent from the same quarter last year.

Revenue increased 6 per cent to S$189.35 million on the back of a 25 per cent expansion in trading property sales. This was due to higher sales and progressive sales recognition on a percentage of completion basis for the group's residential properties - including V on Shenton, Alex Residences near Redhill MRT Station, and Mon Jervois.

UIC said revenue from hotel operations fell 4 per cent to S$37.2 million. The group has stakes in The Pan Pacific, Marina Mandarin and Mandarin Oriental (all in Marina Square in Singapore) as well as the Tianjin Sheraton and Tianjin Westin in China.

UIC said gross rental income from investment properties declined 2 per cent to S$67.3 million. The group owns Singapore Land Tower and Clifford Centre in the Raffles Place area; The Gateway on Beach Road; Stamford Court; and two neighbouring buildings in Tampines Finance Park (Abacus Plaza and Tampines Plaza). The group also has a stake in SGX Centre on Shenton Way.

On its former UIC Building site on Shenton Way, the group is developing a residential and office project. The two components are named V on Shenton and 5 Shenton Way respectively.

Earnings per share rose to 4.6 cents in Q3 FY2015 from 4.3 cents in Q3 FY2014. Net asset value per share stood at S$4.19 as at Sept 30, 2015, up from S$4.09 as at Dec 31, 2014. The counter ended 3 cents lower on Friday at S$3.08.

For the first nine months of this year, despite a 16 per cent increase in revenue to S$573.70 million, UIC's net profit fell 33 per cent to S$184.96 million. This was because of lower fair value gains on investment properties.

"CBD office demand is expected to remain subdued and steady," UIC said.

On the residential sector, the group said that despite the property cooling measures continuing to create an overhang, there are "some signs of recovery in certain segments of the market".

The group also highlighted challenges in the retail trade: slower growth in tourist arrivals; new supply of retail space and vacancies in existing malls; and the rising popularity of online retailing. And on the hotels front, competition from new hotels is affecting revenue growth, it said.

Source: Business Times, 31 Oct 2015