Metro Holdings Q2 net profit down 11.8% to $16.4m

Closure of department stores badgered its earnings.

Property development and investment group Metro Holdings reported an 11.8% lower net profit for the quarter ending in September, down from $18.6m to $16.4m.

The group's turnover of $28.3 m decreased by 26.1% over last year's $38.3 m as the Metro Sengkang and Metro City Square department stores had been closed by the retail division in 2Q16 and 3Q16 respectively.

"The cessation of the rental contribution from Frontier Koishikawa Building, which ceased on its disposal, and lower rental income reported by GIE Tower due to a weaker Chinese Renminbi resulted in gross profit for 2Q17 declining to $1.7 m as compared to 2Q16’s $2.1 m," Metro Holdings said in their announcement.

Meanwhile, other income decreased to $8.0 m from $16.1 m mainly because the last year included a gain of $4.3 m on disposal over the carrying value of Frontier Koishikawa, Tokyo and exchange differences on bank balances of $6.7 m.

Changes in fair value of short term investments relate to an unrealised fair value loss of $0.8 m in 2Q17 and $5.4 m in 2Q16, of the Group’s portfolio of short term equity investments in REITs held by the property division. Share of results of associates increased to $8.5 m in 2Q17 from $5.5 m in 2Q16 mainly because the Group’s share of Top Spring’s results improved.

However, this was partially offset by lower fair value gains on investment properties held by Shanghai Shama Century Park. As a result of the foregoing, and in particular without the one-off gain of $4.3 m from the Frontier Koishikawa disposal, profit before taxation decreased to $17.3 m in 2Q17 from $19.1 m in 2Q16.