We would like to thank our former Chairman Mr Norman Ip for his strong leadership at the Board providing vision, stewardship and oversight of our operations since the listing of UE E&C Ltd. (“UEEC”) and its group of companies (the “Group”) on the Mainboard of Singapore Exchange Securities Trading Limited in February 2011 to 30 August 2012. Going forward, we will build on the foundation established under Mr Ip’s stewardship to achieve better business performance in order to maximise shareholder value.
The Group’s revenue decreased slightly to $387.5 million for the year ended 31 December 2012 compared with $388.6 million in the previous year.
Gross profit also decreased, by 8% from $88.9 million in the previous year to $81.9 million in 2012 due to higher revenue and cost savings in 2011.
Share of results of associates and joint ventures decreased 80% from $15.5 million in the previous year to $3.1 million in 2012 mainly due to the
timing in recognising development profit from Park Central @ AMK when it obtained temporary occupation permit in 2011. This resulted in a decrease
in profit before tax by 22% from $75.4 million in the previous year to $59.0 million in 2012.
The Group’s Directors are proposing a first and final dividend of 5 cents per ordinary share. The proposed first and final dividend, if approved by
members at the forthcoming Annual General Meeting (AGM), will be paid on 21 May 2013.
Fulfilling post-listing strategy through business expansion
The financial year ended 31 December 2012 marks the Group’s first full-year performance since its listing, and we are pleased to inform shareholders
that we have been successful in executing the plans committed during our listing. The year saw the Group expand its business through joint ventures
and an acquisition – one of the key strategies outlined in our post-listing plans – that bring about greater economies of scale, access to new markets
and achieve better business performance.
Through joint ventures, the Group incorporated Quality Engineering Pte. Ltd. (“Quality Engineering”) in January and UE E&C Sanjia (M) Sdn. Bhd.
(“UE E&C Sanjia”) in November. Quality Engineering is a local general building contractor for structural and wet-trade works; and UE E&C Sanjia
is a provider of property development cum construction and project management services in Malaysia. These joint ventures will broaden the Group’s
construction capabilities, as well as expand our business in Singapore and Malaysia.
In November, the Group also acquired a 90% stake in APG Geo-Systems Sdn Bhd, an established specialists geo-technical foundation engineering company
with more than 20 years of business track record. We believe this acquisition will strengthen the Group’s range of construction services, as well as
deepen our presence in Malaysia.
Strengthening foothold in property development
The Group’s strategy in property development is to take minority stakes in joint ventures for both private and public residential projects,
and at the same time, be appointed as the main contractor for the development projects it participates in. This strategy has allowed us to
diversify our earnings, as well as establish a pipeline of projects for our construction business.
In September, the Group was awarded a 23,785.4 sqm residential land parcel, at Prince Charles Crescent through a joint venture with Wingstar
Investment Pte Ltd and Metro Australia Holdings Pte Ltd, that will be developed into a private condominium. Greatearth Construction Pte Ltd
(“Greatearth”), the Group’s principal construction subsidiary, has been appointed as the main contractor. In January 2013, the Group formed
a joint venture company with Sing Holdings Limited to complete the acquisition of a residential land parcel at Punggol Field Walk/Punggol East.
It has a gross floor area of 42,921 sqm and will be developed into an executive condominium (EC) with six blocks of 16-storey towers.
Greatearth will be appointed as the main contractor.
The Group’s residential property projects sold well during the year. In May, the Group launched 416-unit
Watercolours, an EC in Pasir Ris,
and chalked up sales of over 75% of total number of units by December. It also managed to sell all the remaining units in
an EC in Sengkang that was launched in January 2011.
Moving towards large-scale, complex projects for M&E contracts
While the Group made steady progress in all its ongoing M&E engineering projects, it also secured a number of new contracts during the year.
As an established player in the industry, the Group is focusing on large-scale projects that are notable landmarks with a higher level of complexity.
One such project clinched during the year was the installation of air-conditioning and mechanical ventilation systems in the academic buildings
of Singapore University of Technology and Design for $43.3 million by United Engineers (Singapore) Private Limited (“UES”), the Group’s principal
M&E engineering subsidiary. The Group also won M&E engineering contracts for the proposed
National Continuing Education and Training East Campus,
Fusionopolis Phase 2A (Towers A & B) and the Watertown mixed-use development in Punggol.
With these, the Group’s order books stood at approximately $650 million as at 31 December 2012.
Consistently improving workplace safety and health
Ensuring good workplace safety and health (WSH) performance remains a critical success factor for our business. Our continuous efforts to improve
WSH had won us several industry accolades. During the year, Greatearth Corporation Pte Ltd and UES each received a SHARP (Safety and Health
Award Recognition for Projects) award for UE BizHub EAST, and UES and UE Power & Resources Pte. Ltd. (“UE Power & Resources”) each received a
WSH Performance Award (Silver). These awards are given out by the WSH Council in recognition of exemplary WSH performance and management systems
by companies, worksites and projects. In addition, Greatearth Corporation Pte Ltd also won a Silver Award for
UE BizHub EAST from the United
Kingdom-based Royal Society for the Prevention of Accidents.
A strong construction demand ahead; overseas expansion on track
The Singapore construction demand is projected at between $26 billion and $32 billion for 2013, according to the Building and Construction Authority.
While this augurs well for our construction and M&E engineering businesses, we also expect challenges from rising costs and labour crunch
which will likely exert an upward pressure on project prices. Nonetheless, the Group will capitalise on the strong construction demand to
look for suitable business opportunities. To overcome rising labour costs and labour crunch, the Group has stepped up efforts to enhance
productivity by deploying technology and machinery where appropriate, as well as invest in human capital training, among others.
We will also continue to expand into the region, especially in countries that are rapidly urbanising and opening up.
Currently, we have business presence in Brunei, Malaysia, Vietnam, China and the Philippines. Building on the regionalisation momentum
established during the year, we will continue to strengthen our capabilities in existing countries and increase our presence in more countries.
We would like to acknowledge the invaluable contributions from Mr Pok Soy Yoong, who will not be seeking re-election at the forthcoming
AGM. Mr Pok will also step down as Chairman of the Audit & Risk Committee and member of the Nominating Committee.
We take this opportunity to thank all our customers, business associates, sub-contractors, suppliers, bankers and shareholders for
their continued support of the Group.
Last but not least, we thank the Board of Directors as well as the management team and staff for their commitment and efforts.
Chua Hock Tong
Chief Executive Officer
Dr Tan Eng Liang