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United Engineers Q2 net profit falls 25% on higher finance costs

UNITED Engineers (UE) saw net profit shrink 25 per cent to S$8.3 million for the second quarter ended June 30, down from S$11.01 million in the year-ago period, the property development and engineering group announced on Wednesday.

This was mainly due to higher finance costs, as well as the absence of a write-back of excess provision of S$1 million related to a completed overseas development.

Revenue fell 8 per cent year-on-year to S$88.14 million. Of UE's four business segments, property rental and hospitality was the only one to see revenue rise year-on-year in the second quarter, up 5 per cent to S$32.9 million.

Property development revenue was down 32 per cent to S$6.7 million, engineering and distribution revenue was down 12 per cent to S$19.7 million, and manufacturing revenue was down 20 per cent to S$14.8 million.

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Earnings per share for the quarter were 1.3 Singapore cents, compared with 1.7 Singapore cents in the year-ago period. No dividend was recommended, the same as a year ago.

With the latest results, net profit for the first-half was S$16.06 million, down 20 per cent from S$20.01 million in the year-ago period.

"The group expects the weaker economic outlook in Singapore and the sustained impact of the July 2018 property cooling measures to continue to weigh on the overall sentiment of the private residential property market in Singapore," said UE.

But it "will continue to seek investment and partnership opportunities and will make selective property acquisitions as and when such opportunities arise", it added.

UE executive chairman Zhong Sheng Jian said: "Amid global trade tensions and geopolitical uncertainties, the group is in a good position to take advantage of investment and partnership opportunities. We will be launching our Dairy Farm residential development project within the next few months and we will continue to grow our property portfolio and land bank systematically."

UE shares closed up two Singapore cents or 0.77 per cent at S$2.62 on Wednesday before the results announcement.