Business Times - 25 Apr 2009
UIC rides on tax boost, higher rental income
By OH BOON PING
UNITED Industrial Corp (UIC) and its subsidiary Singapore Land yesterday reported strong earnings growth thanks to healthy rental income numbers and an income tax write-back for the first quarter ended March 31, 2009.
UIC's net profit more than doubled year on year to $73.5 million from $32.1 million while revenue rose 30 per cent to $195.85 million. UIC earnings per share were 5.3 cents - up from 2.3 cents a year ago.
For SingLand, its Q1 net profit more than doubled to $73.15 million from $33.66 million, despite revenue rising only 4 per cent to $86.17 million.
The period saw the benefit of a write-back of deferred income tax arising from a one percentage point reduction in corporate tax rate. This resulted in SingLand's tax expense for Q1 showing a tax credit of $17.8 million, against an $8 million tax expense for Q1 2008. In UIC's case Q1 showed a tax credit of $16.7 million against Q1 2008's $10 million tax expense.
UIC attributed its revenue growth to higher sales from trading properties and higher rental income, which was partially offset by lower revenue from Pan Pacific Singapore hotel.
Sales of properties held for sales stood at $80.6 million - a $43 million rise from previously, due mainly to progressive sales recognition, on a percentage of completion basis, of the One Amber, Park Natura, Northwood and Grand Duchess projects.
Gross rental income rose by 22 per cent to $76.9 million attributable to higher rental rates.
In contrast, revenue from Pan Pacific Singapore hotel dropped 28 per cent to $21.3 million with lower room rates and occupancy and lower food & beverage revenue.
Arising from the reduction in corporate tax rate from 18 per cent to 17 per cent, UIC recognised a group one-time write-back of deferred income tax of $30.6 million, provided in prior year mainly on the cumulative fair value gain of investment properties. Excluding this write-back, income tax expense increased by $3.9 million to $13.9 million in line with higher operating profits.