Metro net profit up 54.4% to S$30.6m

But Singapore sales remain constrained.

Property development and investment group Mainboard-listed Metro Holdings Limited (Metro) reported that it has achieved a 54.4% increase in net profit to S$30.6 million for the three months ended 30 September 2013 (2QFY2014), compared to S$19.8 million for the three months ended 30 September 2012 (2QFY2013). Revenue increased by 2.6% to S$45.9 million from S$44.7 million over the same period.

A gain on disposal of S$29.6 million for the Group’s freehold warehouse property more than offset the decline in fair value of the Group’s portfolio of short term equity investments as well as other income. Other income declined to S$2.8 million in 2QFY2014 from S$8.9 million in 2QFY2013 as the previous quarter included interest income from loan notes that were disposed by the Group’s core Property Division in 4QFY2013. In addition, the Property Division registered a loss of S$1.8 million on disposal of part of its portfolio of short term investments. General and administrative expenses rose to S$9.9 million in 2QFY2014 mainly due to provision for management performance bonuses relating to the disposal of warehouse property.

Metro’s Chairman, Lt Gen (Rtd) Winston Choo, said, “Our underlying fundamentals remain strong and we are focused on leveraging on our strategic partnerships to deepen our foothold in the PRC, where we have a strong base built on years of experience in this market. Where feasible, we will continue to embrace opportunities that enable us to recycle capital successfully and at the same time, look for further yield improvements through asset enhancement initiatives.”

For its outlook, Lt Gen (Rtd) Winston Choo added, “Looking ahead, our intention is to build the Group’s presence and investment in the region through selective positioning, new investments in property development and strategic alliances with reputable partners, with a view to broadening our revenue stream and facilitating sustained profitability. In particular, we are focused on investments that will enable us to expand our property interests in the PRC which is a market that we are very familiar with and have made significant investments.

“Specifically in FY2014, we look forward to the planned residential sale launches for the Prince Charles Crescent project in Singapore which will allow us to book progressive recognition of turnover. In addition, the residential properties of the Nanchang project are being sold in phases and completion of the first phase for handover is currently scheduled for late 2014/early 2015. Sales for the Nanchang project will be recognised on a completion of contract basis.”

Metro said volatile market conditions dictate that the balance of the Group’s portfolio of quoted equity investments in REITs will continue to see changes in their fair value as they are marked-to-market. In addition, the Group remains subject to significant currency translation adjustments on foreign operations due to foreign exchange volatilities, given that a large portion of its investment properties are located in the PRC and denominated in the RMB.

With keen competition and rising operational costs, in particular, staff and rental costs in the retail sector both in Singapore and Indonesia, the Retail Division continues to face trading pressure, Metro added.