Straco Corp reports lower net profit of S$4.36m in Q3 due to 'periodic resurgences' of Covid-19

TOURISM attractions operator Straco Corporation posted a net profit of S$4.36 million in the third quarter ended Sep 30, the mainboard-listed company said in a business update on Thursday.

This represents a 32.4 per cent decline from the same period a year ago, when the group reported a net profit of S$6.45 million.

The group attributed Q3's net profit to foreign exchange gain, with the Renminbi strengthening against the Singapore dollar, as well as receipts from the Singapore government's Job Support Scheme and land rental waiver for the quarter.

Revenue in Q3 dipped 7 per cent to S$13.68 million, compared with S$14.71 million during the same quarter in 2020.

For the first 9 months of 2021, the group took in a net profit of S$14.04 million compared with a net loss of S$197,000 during the same period last year.

Straco said its operations in China had shown recovery with the partial resumption of domestic tourism but Singapore's tourism sector continued to be affected by the lack of tourist arrivals.

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Specifically in Q3, Straco's China operations were affected by tightened domestic travel restrictions arising from a resurgence of Covid-19 cases in various provinces, resulting in lower visitor arrivals during the summer holidays.

Overall visitation to all its attractions was 18.5 per cent lower than the corresponding period in Q3 2020.

The company said its financial position remains strong with net cash holdings of S$173.1 million as at Sep 30.

It said it is cautiously optimistic that business environments will gradually improve with further lifting of travel restrictions, although it noted that reopening plans have been affected by periodic resurgences of Covid-19 cases despite the higher level of vaccinations and aggressive testing.

"Authorities in Singapore and China are acting with an abundance of caution to ensure that the situation does not degenerate to one where the healthcare system becomes overwhelmed," Straco said.

"The group will continue to monitor the situation, and be operationally ready to receive the influx of both local and international tourists to its attractions when the situation improves."