Extracted from Annual Report 2016
For the year ended 31 December 2016, the global business environment continued to be affected by financial and geopolitical uncertainties. The Group remains focussed on Property Rental and Hospitality as well as Property Development, as it continues divestment of non-core businesses. During the year, the Group disposed of its technology and environmental engineering businesses, among others. Attributable profit from these discontinued operations was $113.2 million, including approximately $123 million in divestment gains. We believe this two-pronged approach of growing the core businesses and strategic divestments will help the Group ride through tough times, while building for the future.
With the above divestments, the Group's continuing operations comprise Property Rental and Hospitality, Property Development, Engineering and Distribution, as well as Manufacturing. Revenue decreased 44% to $479.7 million mainly due to lower revenue from the property development business, following the completion of Eight Riversuites. As a result, gross profit decreased 12% to $193.7 million and attributable profit decreased 62% to $27.4 million.
Based on the above financial results, the Board is pleased to propose a first and final dividend of 5 cents per ordinary stock unit, a special dividend of 7 cents per ordinary stock unit and a preference dividend of 7.5 cents per preference share. These dividends will be paid on 25 May 2017, if approved by members at the forthcoming Annual General Meeting (AGM).
The year was marked by a number of strategic divestment activities. In February, the Group announced the proposed disposal of Multi-Fineline Electronix, Inc. ("MFLEX"), to which shareholders gave approval on at an Extraordinary General Meeting (EGM) held on 8 June 2016. On 27 July 2016, the divestment was completed and MFLEX ceased to be a subsidiary of the Group. The Group also divested its interests in UES Holdings Pte. Ltd., UE Envirotech Pte. Ltd., UE Asia Pacific (Beijing) Co., Ltd., Hengyang City UE Songmu Water Co., Ltd. and Suzhou Speedling Co., Ltd. Proceeds from the above divestments were primarily used to repay external borrowings and as general working capital.
On 16 May 2016, the Group established a $1 billion multicurrency debt issuance programme, which will provide financial flexibility to further grow its core businesses, as it embarks on development projects as well as makes strategic investments and acquisitions. On 1 June 2016, the Group issued $150 million 3.68% per annum fixed rate notes due 2021 under this programme. The Group's outstanding $250 million 4.20% per annum fixed rate notes due January 2017 was redeemed upon its maturity. Net debt to equity ratio improved from 0.49 times to 0.30 times.
The Group strives for excellence in all aspects of its operations. During the year, the Group won accolades on various fronts, including 21 awards at the Excellent Service Award (EXSA) for quality service at Park Avenue Changi, Park Avenue Clemenceau and Park Avenue Rochester. Supported by SPRING Singapore and managed by seven industry leading bodies, EXSA also seeks to inspire service staff to scale new heights, identify service role models and encourage service champions. The 21 awards comprise three Star Awards (the highest recognition), six Gold Awards, 11 Silver Awards and an Outstanding Star Award, which is an additional special award conferred to selected exemplary Star Award winners.
On the workplace safety & health (WSH) front, UE ServiceCorp Singapore won a WSH Performance (Silver) Award at the annual WSH Awards organised by WSH Council and supported by Ministry of Manpower for its good WSH performance through the implementation of sound WSH management systems.
The economic outlook remains challenging amidst the global geopolitical uncertainties and economic slowdown in China. While the Group's property business in China continues to face difficult operating conditions due to the patchy recovery in China's property market so far, we expect the recovery to pick up and help cushion the slowdown elsewhere for our property-related businesses. Nevertheless, core rental income from the Group's portfolio of investment properties is expected to remain relatively stable and the Group's net asset value continues to grow steadily.
On 26 September 2016, the Group's controlling shareholders Oversea-Chinese Banking Corporation Limited ("OCBC Bank") and Great Eastern Holdings Limited ("GEH") announced that they were reviewing their strategic options for their combined stakes in UEL and WBL Corporation Limited ("WBL"). On 10 February 2017, OCBC Bank and GEH further announced that they had received and were evaluating non-binding expressions of interests, and there is no certainty that any transaction will materialise or that any agreement will be entered into.
During the AGM held on 29 April 2016, Mr Chew Leng Seng did not seek re-appointment as a Director and ceased to be an Independent and Non-Executive Director. Mr Chew had been a Director since October 2006 and we thank him for his contributions and counsel over the years. We also wish him all the best in his future endeavours.
We would also like to welcome Mr George Lee to the Board who was appointed as Non-Independent and Non-Executive Director on 1 July 2016. Mr Lee has a wealth of experience in the banking and finance industry and we are confident he will contribute significantly to the Group.
Lastly, we would like to thank the management and staff for their dedication, as well as business partners, investors and all other stakeholders for their continued support of the Group.