UIC posts double-digit Q1 net profit growth
Singapore
MAINBOARD-LISTED United Industrial Corp (UIC), flush from consolidating its ownership of Marina Square, turned in double-digit first-quarter earnings growth on Tuesday.
Net profit for the three months to March 31 swelled by 35 per cent to S$81.1 million.
Revenue was up by 12 per cent at S$185.3 million, on growth in its various property and information technology business segments. Turnover from hotel operations, meanwhile, stayed flat.
UIC got a big boost from its share of associated companies' results, which almost quadrupled to S$28.7 million, and more than made up for a slump in joint venture contributions.
It noted that its share of associates' results jumped on contributions from the Park Eleven private home project in Shanghai, as completed units were handed over this year, while its share from joint ventures was nearly halved, following the completion of The Clement Canopy in March.
Banking tycoon Wee Cho Yaw, who has stakes in both UIC and its parent United Overseas Land (UOL), gained another feather in his cap earlier in April, when UIC bought out the other shareholders in the holding companies for the Marina Square complex on Singapore's bayfront.
The recent deal, which came with a price tag of S$675.3 million, has put UIC and UOL in joint control of Marina Square Shopping Mall and the Marina Mandarin and Pan Pacific hotels, as well as a partial interest in the Mandarin Oriental Singapore hotel.
"The financial impact arising from these transactions will be effected in second quarter of 2019," UIC added.
News of the buyout had prompted DBS to upgrade UOL's rating to "buy", with the house's analysts noting on April 16 that the move could even be a prelude to the privatisation of UIC.
Stock watcher Royston Foo also wrote on the Smartkarma investment portal that - compared with last year's privatisation of Wheelock Properties by its Hong Kong-listed parent - UIC should be looking at a fair value of S$4.07 to S$4.34 for each share.
UIC noted in its outlook statement that sentiment in the residential market is still soft and retail rents remain under pressure, but added that rising visitor numbers bode well for hotels, while office rents should be "firm".
Earnings per share stood at 5.7 Singapore cents, up from 4.2 cents in the year prior, while net asset value came in at S$4.81 a share, against S$4.74, as at Dec 31, 2018.
UIC shares closed up by S$0.01, or 0.32 per cent, at S$3.11, before the results.
