UIC’s net profit plummets 71% to $214m in 2011

As sales of its trading properties didn’t do so well last year.

In a financial statement, United Industrial Corporation reported total revenue of $805.5 million, which was lower by $388.8 million (33%) due mainly to lower sales of trading properties and lower rental income, partially offset by higher revenue from information technology and hotel operations.

Progressive sales recognition of trading properties at $287.4 million declined by $413.1 million (59%) following completion of the One Amber and Grand Duchess projects in April 2010 and Park Natura project in May 2011. Although office occupancy rates have improved, gross rental income at $287.5 million was lower by $9.8 million (3%) as new leasing rates of office properties were lower than those of expired leases.

Revenue from Pan Pacific Singapore hotel increased by $11.5 million (11%) to $121.3 million with higher room and occupancy rates, and higher F&B revenue. The Westin Tianjin hotel contributed $19.8 million, an increase of $5.2 million (36%) in its first full year of operations since its opening in February 2010.

Share of operating results of associated companies decreased by $8.5 million (22%) to $29.8 million due mainly to absence of $14.2 million contribution from The Regency @ Tiong Bahru, fully sold and completed in March 2010, partially offset by higher contributions from Mandarin Oriental and Marina Mandarin. The Group also shared a fair value gain on Novena Square of $11.4 million (2010: $6.4 million).

Based on valuation by professional valuers as at 31 December 2011 on the investment properties held by subsidiary companies, a fair value gain of $21.4 million (2010: $691.0 million) was credited to the income statement.

In 2011, non-controlling interests included $32.6 million (2010: $116.3 million) share of fair value gain on investment properties.

In summary, net profit from operations decreased by $77.5 million (28%) to $200.2 million. After adding the fair value gain on investment properties, net of deferred income tax and non-controlling interests, of $13.9 million (2010: $466.0 million), the group's overall net profit was $214.2 million (2010: $743.8 million).