UE’s Q1 profit falls 90% on fair-value losses

UE’s Q1 profit falls 90% on fair-value losses

 

By ARTHUR SIM

 

 

UNITED Engineers (UE) has reported Q1 2008 revenue of $133.6 million, up 9 per cent from the same period last year. But net profit was down 90 per cent to $1.22 million.

 

 

UE said operating profit was affected by fair-value losses from short-term investments and the carrying value of its interest in Anhui Hefei United Power Generation Company (AHUP).

 

It said ‘other income’ dropped 95 per cent to $588,000 due to fair-value gains from short-term investments recognised in Q1 2007, while ‘other expenses’ increased 459 per cent to $13.8 million due to fair-value losses of $2.9 million from short-term investments and $8 million (with $4.4 million attributable to the group, after minority interest) relating to the carrying value of AHUP.

 

AHUP has ceased contributing since Dec 1, 2007 due to proposed divestment approved by UE shareholders and pending finalisation.

 

In December, UE said it would sell its stake in United Power Corporation (S), which has a 49 per cent stake in AHUP, for US$85.6 million.

 

Gross profit for Q1 rose 20 per cent to $28.4 million and gross profit percentage was 21.3 per cent, up from 19.2 per cent in Q1 2007. This was attributed mainly to higher rental rates and partial recognition of income from the sale of the condominium project, The Rochester.

 

Earnings per ordinary share fell to 0.5 cents, from 5.4 cents in Q1 2007.

 

UE’s share price closed eight cents lower at $3.91 yesterday.

 

Source: Business Times