Metro Holdings profit down to S$2.7mn

Yet the group posted 5.7% revenue growth to S$87.2mn for 1HFY2012.

Mainboard-listed Metro Holdings Limited (“Metro”), a property development and investment group backed by established retail operations in the region, on Monday reported a 5.7% increase in revenue to S$87.3 million for the first half ended 30 September 2011 (“1HFY2012”), from S$82.6 million in the previous corresponding period (“1HFY2011”).

A steady turnover from the Group’s Property Division and higher sales from its Retail Division contributed to the increase in revenue during the quarter.

Profit before tax decreased from S$67.8 million in 1HFY2011 to S$7.5 million in 1HFY2012, mainly due to the share of an associate’s divestment gain relating to 1 Financial Street of S$55.3 million recorded in the previous corresponding period and a decline in the fair value of the Group’s portfolio of short term investments for 1HFY2012. Consequently, net profit attributable to shareholders decreased to S$2.7 million in 1HFY2012 from S$58.8 million in 1HFY2011, according to a Metro Holdings report.

Metro’s Chairman, Lt Gen (Rtd) Winston Choo, commented, “Our core Property Division has continued to yield good results from asset enhancement initiatives. All five of our properties in three first-tier cities – Shanghai, Beijing and Guangzhou – continue to enjoy a high occupancy averaging over 93%. At the same time, we have seen a higher rental income from Metro City Shanghai after the revamp of the basement into a Japanese themed section. Looking beyond China, our investment in Japan has also proven to be fruitful, with an initial contribution from the Frontier Koishikawa Building which we acquired in April last year.

“Our Retail Division has also done well, with our new Metro City Square department store now contributing to topline performance. The brisk sales were also attributed to a higher level of activity in Orchard Road as well as festive and promotional sale events.” 

With improved occupancies at Metro City, Shanghai, EC Mall, GIE Tower, Guangzhou and Metro Tower, Shanghai, rental income from the Group’s investment properties is expected to remain stable, subject to the impact of the completion of the disposal of Metro City, Beijing. 

Lt Gen (Rtd) Winston Choo said, “Structural demand for commercial and retail space remains robust in the long-term in China in both first-tier cities as well as fast growing second and third-tier cities.

“Leveraging on our strong balance sheet as well as strategic partnerships, we will continue to seek out quality properties that complement our existing portfolio to further strengthen our presence in the Asia-Pacific region.”
Notwithstanding keen competition in the retail sector in Singapore and Indonesia, the Group seeks to maintain the sales performance of its Retail Division. Consumer spending is expected to remain stable for the rest of the financial year, with growth in Indonesia supported by an expanding middle class with a growing income and consumption level.

“Metro remains committed to asset enhancement initiatives to further improve our yield as well as unlock the value of our property portfolio for our shareholders. We are always on the lookout for viable investment opportunities to grow both our Property and Retail businesses,” concluded Lt Gen (Rtd) Winston Choo.