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Metro Holdings sees Q1 earnings drop by 19% in absence of one-off gain from joint-venture divestment

MAINBOARD-LISTED property and retail group Metro Holdings saw its first-quarter earnings slide in the absence of a one-off gain from an earlier divestment, according to unaudited results out on Tuesday.

Net profit dropped by 19 per cent on the year before, to S$20.2 million for the three months to June 30, while revenue came in lower by 7 per cent at S$30.2 million.

The bottom line was supported by the group's property division, with retail operations running at a wider pre-tax loss of S$1.97 million. This was due to lower sales from Singapore, even as an Indonesian retail associate's sales showed "marginal growth", Metro said.

Operational pre-tax profit slipped in the real estate arena to S$23.7 million as the share of associates' results came in lower on the absence of the significant gain from the disposal of interest in a subsidiary and joint venture, and the absence of contributions from the former associate after divestment.

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But Metro reported higher unrealised fair value gains on investments, and the group's share of results of joint ventures improved on contributions from residential project The Crest in Singapore's Prince Charles Crescent and recognition of S$2.3 million from the sale of Acero Works in Sheffield in Britain.

Earnings per share was 2.4 Singapore cents, down from 3 Singapore cents previously.

Net asset value stood at S$1.83, against S$1.78 as at March 31.

No dividend was declared, as in the year before.

Metro said in its outlook statement that rental income is expected to remain steady at its GIE Tower investment property in Guangzhou, as well as at properties in Shanghai and London held by joint ventures.

Meanwhile, leasing activities at office buildings in China and construction and pre-sales at residential projects in Indonesia are ongoing, it added. Sales and marketing of a mixed-use development in Britain are under way, with 571 apartments being handed over in stages after the completion of the first phase of Manchester's Middlewood Locks.

But Metro warned that sales of The Crest in Singapore "will be subject to the impact of recent cooling measures" that kicked in on July 6.

"The retail division continues to operate amidst difficult trading conditions," it also noted.

The group said in its results announcement that its balance sheet "remains strong" with net assets of S$1.5 billion and net cash of S$291.3 million after bank borrowings, "with good opportunity for more property investments and developments".

"The group will remain disciplined and focused in our investment approach to seek out potential investment opportunities in the region to drive sustainable growth and further enhance shareholder value," said chief executive Lawrence Chiang Kok Sung in a media statement.

Metro closed flat at S$1.10 before the results.