SINGAPORE (Feb 27): United Engineers reported FY16 earnings from discontinued operations of $113.2 million, which included $123 million in divestment gains mainly from disposal of its technology and environmental engineering businesses.
With the exit of these businesses, the group’s continuing operations comprise Property Rental & Hospitality, Property Development, Engineering & Distribution, as well as Manufacturing.
Revenue from continuing operations decreased 44% to $479.7 million mainly due to lower revenue from the property development business following the completion of Eight Riversuites.
Property rental & hospitality revenue decreased 3% to $135.2 million. Excluding one-off items, operating profit before interest increased 4% to $69.0 million.
Revenue in property development segment decreased 82% to $70.8 million, leading to an operating loss before interest of $23.2 million.
Engineering & distribution revenue decreased 11% to $136.9 million mainly due to lower contribution from O’Connor’s, the group’s systems integration business, but operating profit before interest increased 63% to $9.1 million.
In the Manufacturing segment, revenue decreased 7% to $89.5 million while operating profit before interest was $6.7 million.
As a result, gross profit decreased 12% to $193.7 million while earnings on continuing operations decreased 62% to $27.4 million.
United Engineers says global economic and geopolitical uncertainties, as well as the weaker economic outlook in Singapore will continue to affect sentiments in the local property market.
In addition, the group’s property business in China continues to face challenging operating conditions due to the slower economic growth and patchy recovery in the property market. Rental income from the group’s portfolio of investment properties is expected to remain stable.
Shares of United Engineers closed 2 cents lower at $2.91.
