UIC posts 13.1% fall in Q3 net profit

Singapore

MAINBOARD-LISTED developer United Industrial Corp (UIC) said on Friday that it could take a year to figure out how to increase income from the consolidated Marina Mandarin hotel and shopping complex, even as third-quarter earnings slipped.

Net profit for the three months to Sept 30 fell by 13.1 per cent year on year to S$52.9 million, while revenue grew by 28 per cent to S$194.4 million. UIC and parent UOL Group consolidated their interest in the Marina Mandarin hotel complex in a S$675.3 million buyout in April, which improved hotel operations revenue.

Meanwhile, property investments turnover rose on higher UIC Building rents, and nearly doubled in property trading on the higher revenue recognised from the Mon Jervois and V on Shenton residential projects.

The group's earnings per share dipped to 3.7 Singapore cents, from 4.2 Singapore cents before.

UIC noted that selling and distribution costs and administrative expenses have increased on the consolidation of Marina Mandarin expenses, while finance costs swelled on the back of interest for the borrowings for the Marina Mandarin deal.

Besides the higher spending, net profit also slipped on lower contributions from a residential joint-venture project, The Clement Canopy, where units were fully sold in April.

UIC and UOL now hold the Marina Mandarin hotel, Marina Square Shopping Mall and the Pan Pacific Singapore hotel, plus a half-stake in the Mandarin Oriental Singapore hotel.

But UIC said in its results that it will take "a year to leverage on the recently acquired additional stake in Marina Centre and to find ways and means to expand the income base".

Still, UIC - which made a joint S$491.3 million bid with UOL for a site in Clementi in July and launched Avenue South Residence for sale in September - has also cited "well-located residential projects with affordable prices" as an expected driver for its private home business.

The operating environment in Singapore is expected to be "reasonably stable" for the rest of this financial year, but "the situation will become less predictable" next year, it added, pointing to global uncertainty.

Nine-month net profit more than doubled from S$232.3 million to S$543.3 million, and revenue grew by 19.7 per cent to S$598.4 million.

No dividend was recommended for the quarter, unchanged from the year before. The counter closed flat at S$2.85, before the results came out.