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UIC net profit jumps 47% in Q2 on fair value gains

PROPERTY group United Industrial Corp (UIC) has posted a net profit of S$108.5 million in the second quarter, up 47 per cent from the same period last year, lifted by fair value gains.

In the three months that ended June 30, UIC booked a S$49.8 million million fair value gain on investment properties (net of non-controlling interests), reversing from a fair value loss of S$3 million in the same period last year.

Removing these effects, UIC’s net profit from operations was S$58.6 million, down 24 per cent from the same period last year.

Second-quarter revenue slumped 50 per cent to S$182.5 million on lower sales recognition from trading properties held for sale.

Since UIC's development projects were completed and substantially sold in 2017, revenue recognised from the sales of trading properties slipped 83 per cent to S$40.4 million. 

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Revenue from property investments rented out held steady at S$71.1 million. Revenue from hotel operations was flat at $35.8 million. Revenue from sale of computer hardware and software rose 39 per cent to S$32 million.

UIC's share of operating profits from associated companies and joint ventures surged 72 per cent to S$14.9 million, driven by higher contribution from the joint venture residential project, The Clement Canopy.

Earnings per share (EPS) excluding fair value gains and losses was 4.1 Singapore cents, down from a restated 5.4 Singapore cents in the second quarter last year. After accounting for fair value gains and losses, EPS was 7.6 Singapore cents, up from a restated 5.2 Singapore cents in the same period last year.

Net asset value per share was S$4.65 as at June 30, up from S$4.56 as at Dec 31 last year. 

UIC shares fell 0.32 per cent to S$3.15 on Friday before results were announced after close of trading.

UIC said in its filing that office rents are expected to improve amidst positive business sentiments, although pressure on retail rents will continue as retailers remain cautious.

The residential market is expected to be subdued in the near term in light of enhanced cooling measures, while the hotel sector will remain steady as the increase in tourist arrivals is taken up by new supply, UIC added.

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