Metro Q3 profit falls 12.6% on flat retail sales, lower associate contributions

METRO Holdings' net profit fell 12.6 per cent in the third fiscal quarter on flat retail sales and lower contributions from associates, the department store operator and property developer announced on Thursday after the market closed.

Metro earned S$55.9 million, or 6.7 Singapore cents per share, in the three months ended December 2015. For the nine-month period, net profit dropped 17.2 per cent to S$112.0 million.

Third-quarter revenue was mostly flat, declining by 1.3 per cent to S$41 million during the quarter as retail revenue rose by a marginal 0.47 per cent to S$38.9 million.

Share of associates' results fell by 13.8 per cent to S$57.6 million, mainly due to the absence of a year-ago S$25.4 million gain from the disposal of the group's 10.7 per cent interest in six Tesco Lifespace developments in China. Contributions from China property developer Top Spring also decreased by S$16.7 million year on year.

Metro expects to see more currency volatility in the year ahead, which will affect the translation of results denominated in the Chinese yuan. The retail division also continues to face challenging competition and high operating costs.=