Fair value losses drag Straits Trading into the red in H2
Uma Devi
STRAITS Trading on Tuesday (Feb 28) posted a net loss of S$121.8 million for the second half of 2022, a reversal from a net profit of S$111.6 million in the corresponding period in 2021.
The group notably booked a net fair value loss of S$79.7 million on its investment properties for the period under review, compared to a net fair value gain of S$86.3 million in the comparable prior year period.
Straits Trading said the loss for H2 was attributable chiefly to higher capitalisation rates, which led to the reduction in fair values of investment properties in Australia, China, South Korea and the United Kingdom, as well as the fair value of an investment property held by a joint venture in Australia.
Total revenue for the period was up 45 per cent to S$257.5 million from S$177.5 million. The group’s tin mining and smelting revenue contributions rose 48.5 per cent to S$227.1 million, while property revenue was up 23.3 per cent to S$30.3 million.
For the full year, Straits Trading booked a net profit of S$551.3 million, versus a net profit of S$234.3 million in the prior year. Total revenue for the year was up 33 per cent to S$527.6 million.
The board of directors has declared an interim cash dividend of S$0.08 per share, unchanged from the prior year. The dividend will be paid out on May 8.
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Looking ahead, the group said the global economy remains subdued due to elevated inflation, rising interest rates, coupled with escalating operating costs for businesses attributable to increases in energy costs and labour costs.
Straits Trading said its newly launched S$370 million exchangeable bond allowed it to “diversify its funding sources”.
“The proceeds from the exchangeable bond provide adequate liquidity for opportunities ahead,” said the company.
Shares of Straits Trading rose 0.9 per cent or S$0.02 to close at S$2.28 on Tuesday.
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