SINGAPORE (Nov 14): United Engineers reported 16% lower 3Q18 earnings of $7.7 million, down from $9.1 million a year ago on lower revenue.
Revenue fell 31% y-o-y to $81.5 million from $118.2 million in 3Q17, mainly due to lower revenue from the property development segment as well as in the absence of revenue contribution from the group’s liquefied petroleum gas (LPG) business after it was divested towards the end of 2017.
While distribution costs fell 32% to $5.3 million due to the absence of expenses from the divested LPG business, group finance costs grew 40% to $5.8 million over the quarter due to higher interest rates and the lower capitalisation of borrowing costs in China.
Other expenses, too, grew 36% to $1.9 million from $1.4 million previously due to higher foreign exchange (forex) losses in the quarter under review.
As at end-Sept, the group’s cash and cash equivalents stood at $275.8 million, down from $359.3 million a year ago due to acquisitions, stamp duty, dividend payments and ongoing operations.
Going forward, the group highlights a possible impact of global trade tensions on manufacturing services in China, as well as the potential for residential cooling measures and revised URA guidelines to affect overall demand of the residential property market.
It however remains positive on a continued recovery in Singapore’s office rental market, and believes demand for good quality housing in China, and the property market, may continue to see sustainable growth in the longer term.
Shares in United Engineers closed 3 cents lower at $2.54 on Wednesday.