Metro Holdings losses S$7.2 mln in net profit

The property development and investment group makes a plunge in pre-tax profit but still enjoys a 17.2% increase in revenue for the first quarter.

Metro Holdings Limited, on Friday reported a 17.2% increase in revenue to S$39.2 million for the first quarter of the financial year ending June 30, 2010, according to the company’s financial report.

Metro said the increase in revenue is attributed to the higher sales of the Retail Division as well as higher rental from the Property Division. However, the group’s profit before tax declined from S$17.2 million in the first quarter of 2010 to S$9.2 million in the first quarter of 2011.

Net profit attributable to shareholders decreased to S$6.9 million in first quarter of 2011, from S$13.1 million in the previous corresponding quarter, the report said.

Retired Lt Gen Winston Choo, Metro’s Chairman said, “We are pleased to report that both our property and retail divisions have performed well and delivered higher revenue. Quarter-on-quarter, our entire portfolio of completed properties enjoyed higher occupancies and, consequently, higher rentals. We continue to take a long term view in our investment properties in China and the Asia Pacific, and will continue to develop our portfolio in this region.”

Metro reported that revenue for the Group’s core Property Division rose from S$13.0 million to S$14.2 million in the first quarter of 2011. Company said the increase was due to improving occupancies and correspondingly higher income rental, especially from EC Mall and Metropolis Tower in Beijing. The newly acquired Frontier Koishikawa Building in Tokyo, Japan also contribute to the revenue.

The Group’s Retail Division achieved a 22.2% increase in sales to S$25.0 million, due to the higher sales contributed by the Metro City Square department store in Singapore. Sales and profitability of the Retail Division’s associated company in Indonesia also improved on the back of economic growth and promotional efforts by the Group.

Moreover, profit before tax for the Property Division lowered to S$9.2 million short-term investments while the group narrowed losses in the Retail Division, with a loss of S$41,000 versus a loss of S$517,000 in last year’s first quarter.

Metro said the group’s balance sheet remains strong with cash and cash equivalents of S$184.3 million and net gearing remains low at 0.09 as of June 30, 2010. Shareholders’ equity increased further to S$992.1 million.

Lt Gen (Rtd) Winston Choo said, “I am heartened by the progress we have made in developing our investment portfolio in China. We will continue to maintain our focus on developing our portfolio in both China’s first-tier cities as well as other fast growing regions in China. As such, we have taken minority stakes in Tesco projects located in QinHuangDao, Fushun and Anshan. We believe that there is large untapped potential for growth in these projects located in China’s third-tier cities. Taking a long-term view, we plan to leverage on the Group’s strong balance sheet to expand our footprint in the Asia-Pacific region. As such, we will continue to look out for viable investment opportunities that complement our portfolio and contribute to our growing commercial and retail property businesses.”