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UIC reports 1% improvement in Q1 net profit to S$60.24m

UNITED Industrial Corporation (UIC) reported net profit of S$60.24 million for the first quarter ended March 31, which represented a 1 per cent improvement from a year ago.

This was despite a 37 per cent drop in revenue to S$165.65 million due to lower sales recognition from trading properties.

Cushioning the decline were lower selling and distribution costs, which fell 43 per cent to S$4.93 million, as well as the group's share of results of associated companies and joint ventures.

Profit before share of results of associated companies and joint ventures was S$63 million, which was lower than last year's by S$6 million or 9 per cent, in line with lower contribution from property trading.

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UIC said the impact was however offset by the absence of the one-off payment of S$14.8 million on Mon Jervois in February 2017 for additional buyer's stamp duty.

Its share of results of joint ventures surged 197 per cent to S$9.99 million, mainly due to the contribution from The Clement Canopy residential project, which was launched for sale in February 2017; share of results of associated companies grew 15 per cent to S$7.77 million.

UIC's property portfolio comprises some of Singapore's well-known commercial and retail landmarks; overseas, it owns some hotels, office and mixed-use projects in the Chinese cities of Shanghai, Beijing and Tianjin, as well as in London, UK.

It had jointly acquired a residential collective sale site at Potong Pasir in October 2016 with UOL Group, which is expected to be launched for sale this year.

With the prices of residential properties inching up, UIC said it "will strive to build up residential land bank in a competitive market".

The group noted that the strong take-up rate of office space in 2017 is expected to sustain with improving business confidence. "However, existing offices will need to upgrade to meet changing working requirements in order to avoid rate erosion.

"Despite positive economic outlook, retail rental will continue to face pressure and competition from new and upgraded malls and online shopping," it added.

As for the hotel sector, UIC said it expects the sector to remain steady despite new hotels vying for market share and rising costs of operation.