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UOL Q3 net profit, excluding other gains, up 8% to S$90.9m

UOL Group posted higher net attributable profit excluding other gains, up 8 per cent to S$90.9 million for the third quarter ended Sept 30, 2017.

As a result of accounting for United Industrial Corporation (UIC) as a subsidiary following UOL's acquisition of 60 million UIC shares in August, UOL's Q3 FY2017 net attributable profit totalled S$618.1 million, up seven times, reflecting a gain on acquisition and consolidation of S$542.1 million, UOL said on Thursday.

"The gain on acquisition and consolidation arose from the application of the accounting standards on business combinations which require the acquirer when buying a business to allocate the purchase price into the fair value of the various assets and liabilities acquired from the transaction.

"As a result of this exercise, UOL recorded a fair value uplift of S$421.1 million to property, plant and equipment, which would result in higher depreciation in future; and a S$82.3 million fair value uplift to development properties which will lead to less development profit to be recognised for certain development projects in future," the group said.

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UOL has up to a year from August to finalise the purchase price allocation, it added.

Group revenue in the third quarter rose 37 per cent to S$537.9 million from S$393.4 million previously. UIC and the associated and joint-venture companies of UOL and UIC contributed S$144.3 million.

Net tangible asset per share rose to S$10.71 as at Sept 30, 2017 from S$10.07 as at Dec 31, 2016. Group gearing ratio inched up to 0.25 at the end of September 2017 compared to 0.24 on Dec 31, 2016 as higher borrowings of the consolidated group were largely offset by the increase in total equity.