UIC posts 35% higher 1Q earnings of $81 mil on higher contribution from associated companies

UIC posts 35% higher 1Q earnings of $81 mil on higher contribution from associated companies

Samantha Chiew
23/04/19, 06:02 pm

SINGAPORE (Apr 23): United Industrial Corporation (UIC) declared earnings of $81.1 million for 1Q19, 35% higher than $60.2 million in 1Q18.

This came on the back of a 12% increase in revenue to $185.3 million from $165.7 million a year ago, mainly due to higher sales of trading properties with higher sales achieved for the group’s residential development projects; higher contribution from investment properties; and higher contribution from information technology operations. The group’s hotel operations remained stable.

As cost of sales also increased by 17% y-o-y to $105.5 million, gross profit for 1Q19 came in at $79.8 million, 5% higher than $75.7 million in the previous year.

Interest income surged 144% to $3.9 million from $1.6 million last year.

Share of results of associated companies saw a significant increase of 269% to $28.7 million, compared to $7.8 million a year ago, mainly due to the contribution from the Park Eleven (Shanghai) residential project arising from the handover of completed units in 2019.

As at end-March, the group’s cash and cash equivalents stood at $250.2 million.

To recap, the group on Apr 17 acquired a 24.27% stake in Marina Centre Holdings and 25% stake in Aquamarina Hotel. The financial impact from these transactions will be effected in 2Q19.

See: United Industrial Corp raises stake in Marina Centre to 77.34% with $675.3 million deal

On the outlook, the group expects office rentals to remain firm amid healthy demand and a reduction in new supply in the CBD, but retail rents are expected to face challenged from e-commerce, rising costs of business and new supply of retail space.

Meanwhile, the residential market is assumed to remain soft with the prevailing cooling measures and substantial new supply in the pipeline. Developers are also becoming more selective in replenishing land banks for residential developments.

The hotel sector is expected to do well in Singapore amid rising tourist arrivals.

Shares in UIC closed at $3.11 on Tuesday.

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