SINGAPORE (Apr 27): UIC, the property group 49.8% owned by UOL, reported a 1% rise first quarter earnings to $60.2 million from $59.4 million on lower cost of sales and lower other losses.
Revenue fell 37% to $165.7 million from a restated $264.5 million a year ago mainly due to lower sales recognition from trading properties.
Revenue recognised from the sales of trading properties at $20.8 million was lower by 84% as the group's development projects were completed by October 2017 and substantially sold in 2017.
Revenue from the group's investment properties and hotel operations remained stable and revenue from information technology operations increased by 27% to $35.0 million.
Cost of sales fell 46% to $90 million while other losses narrowed 99% to $116,000.
Profit before share of results of associated companies and joint ventures recorded was $63.0 million, which was lower than last year by 9%.
This was in line with lower contribution from property trading. The impact was however, offset by the absence of the one-off ABSD payment of $14.8 million on Mon Jervois in Feb 2017.
Share of joint ventures' results increased by $6.6 million to nearly $10 million mainly due to the contribution from The Clement Canopy residential project which was launched for sale in February 2017.
Looking ahead, UIC says 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.
But despite positive economic outlook, the retail rental will continue to face pressure and competition from new and upgraded malls and online shopping.
Price of residential property has edged up due to rising demand in light of positive market sentiments.
The group will strive to build up residential land bank in a competitive market.
The hotel sector will remain steady despite new hotels vying for market share and rising costs of operation.
Shares in UIC closed 5 cents higher at $3.27 on Friday.