Straco Corp Q1 net loss narrows to S$390,000

TOURISM attractions operator Straco Corp on Friday reported a first-quarter net loss of S$390,000, narrowing the net loss of S$3.4 million a year earlier as operations are allowed to resume at reduced capacities.

For the three months ended March 31, 2021, revenue more than doubled to S$8.1 million from S$3.4 million over the same period last year. This is as all its attractions registered positive revenue growth in the absence of temporary closures and rides suspension that had affected performance in last year.

The mainboard-listed company said in a business update that the group's business continues to be affected by the Covid-19 pandemic. While its operations in China showed year-on-year improvement supported by domestic tourism, Singapore's travel restrictions for leisure travel had affected international tourist arrivals - which used to be the Singapore Flyer's main revenue source.

Against this backdrop, operating profit for the first quarter was S$19,000, compared with last year's operating loss of S$3.6 million. This was due to an exchange gain of S$49,000 million recorded from a stronger Chinese yuan against the Singapore dollar, and operating profits generated by China operations offset by operating losses incurred by the Singapore Flyer.

Overall visitation to attractions in the first quarter was 117 per cent higher than the corresponding period in 2020 but remains 70 per cent lower than the pre-pandemic levels in Q1 of 2019.

Despite the first-quarter losses, the group's financial position remains strong with net cash holdings of S$156.9 million as at March 31, 2021, it said.

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"While many countries have started vaccination programmes, the recent resurgence of virus cases means that precautionary measures such as safe distancing, operating with reduced daily capacity and working from home will continue to weigh on businesses," said Straco.

"The group will continue with the various cost cutting and cost containment measures while at the same time take cognisance of the need to look after the well-being and welfare of its workforce," it added.

Straco's main operating assets include Shanghai Ocean Aquarium, Lixing cable car service at Mount Lishan in Lishan in Lintong District, Shaanxi province; Underwater World Xiamen and the Singapore Flyer.

Shares of Straco last traded at 55 Singapore cents.