Metro reports sevenfold jump in Q3 net profit

METRO Holdings reported on Monday a sevenfold increase in net profit for the third quarter ended Dec 31, 2017 to S$146.61 million from S$20.49 million a year ago.

This was lifted by its associate Top Spring International Holdings Limited's very substantial disposal of eight property projects and Metro's recent sale of its 30 per cent interest in Nanchang Fashion Mark.

There was also an improvement in fair value of short-term investment to an unrealised fair-value gain in the fiscal third quarter, a turnaround from an unrealised fair-value loss in the year-ago period.

Revenue during the quarter grew 5.4 per cent year-on-year to S$39.3 million on the back of improvements in revenue from property and retail segments.

The average occupancy rate for Metro's three investment properties in Guangzhou and Shanghai as at Dec 31, 2017 held steady at 92.7 per cent. Metro City, Shanghai, reported improved results with higher rental income with the completion of certain phases of asset enhancement.

The group said it expects the rental income of its GIE Tower investment property in Guangzhou to remain steady. Rental stability is also expected at the joint-venture level for Metro City and Metro Tower in Shanghai.

In the UK, construction work continues on the 571 apartment units of the Middlewood Locks development project and is expected to be completed in stages over spring and summer 2018. This mixed development will provide 2,215 new homes and 750,000 sq ft of commercial space including offices, hotel, shops, restaurants, a convenience store and gym.

Following Metro's recent tie-up with the Trans Corpora Group and the Lee Kim Tah Group for a mixed-use development The Bekasi project in Jakarta, it has entered into a second joint venture with the Lee Kim Tah Group in the UK to jointly acquire a freehold office property, located at 5 Chancery Lane, in the heart of Midtown Central London. The freehold office building, which is fully leased to 2023, was acquired for £80.75 million (S$148.2 million).

In China, Metro has commenced pre-leasing activities for its three recently acquired office buildings in Bay Valley. With the Chinese government's plan to develop the Yangpu district into a global innovation and technology hub, these properties are positioned to attract enterprises from high-tech, communication, education, IT research, biotechnology and information sectors.

"Metro will continue to leverage on its strong partnerships and remain proactive in prudently seeking out potential investment opportunities in the region to generate higher returns for our shareholders," said Metro chairman Winston Choo.

Shares of Metro closed at S$1.11 on Monday, unchanged from last Friday.