Metro Holdings profit up 388.7% to S$14.9M

Mainboard-listed property group posted higher dividends income and lower forex expenses.

Metro Holdings Limited eported a 3.7% increase in revenue to S$44.2 million for the three months ended 30 June 2012 (“1QFY2013”), from S$42.6 million in the previous corresponding quarter (“1QFY2012”), mainly due to higher turnover from the Group’s Retail Division, according to its official earnings release for the quarter.

"Profit before tax also increased from S$6.4 million in 1QFY2012 to S$18.1 million in 1QFY2013, attributable to higher dividend income from long-term available-for-sale investments and changes in the fair value – reflecting recovery in the market values – of the Group’s short-term quoted equity investments in property REITs, as well as lower general and administrative expenses on lower foreign exchange losses. Consequently, net profit was up 388.7% from S$3.1 million in 1QFY2012 to S$14.9 million in 1QFY2013," it added.

For the next quarters, Metro Holdings expects rental income from the Group’s investment properties to decline following the disposal of Metro City Beijing.

"However, minimal impact is expected on operating income as this joint venture development incurred a marginal operating loss prior to disposal. The Group will continue to be subject to significant currency translation adjustments on foreign operations due to forex volatilities, since the bulk of its investment properties are in China and denominated in the RMB," said Metro Holdings,

"Notwithstanding keen competition in the retail sectors in Singapore and Indonesia, the Group seeks to maintain stability in the sales performance of its Retail Division but expects pressure on margins, on rising operational costs," it said.

"“Against the backdrop of a volatile world economy, Metro’s steady stream of cash flow is testament to the Group’s resilient business model and prudent investment strategy. Having divested Metro City Beijing in FY2012, which unlocked substantial value for our shareholders, revenue contribution from our core Property Division was slightly impacted. Nonetheless, our mature properties in both Shanghai and Beijing continue to enjoy good rental income, while average occupancy at our five investment properties remains stable. We will continue to maintain an optimal tenant mix and efficient management of our existing properties to improve yield," advised Lt Gen (Rtd) Winston Choo, Metro Holdings Chairman.