Straco posts S$3m net loss in Q1 on China’s Covid-19 measures, Singapore Flyer closure

TOURISM attractions operator Straco Corporation posted a net loss of S$3 million in its fiscal first quarter ended March 31, compared with a net loss of S$390,000 in the year ago period.

In a business update on Tuesday (May 24), the group said the results came on the back of negative revenue growth from its attractions and business interruptions from Covid-19 measures.

Its attractions include the Singapore Flyer that had to close from Jan 16 to Apr 14 because of a technical issue. The issue, which came to light during a routine maintenance inspection, has since been resolved by way of a comprehensive investigation involving professional parties, it said.

The group said its operations in China experienced short periods of service suspension, adding that business activity had remained low even when Covid-19 measures were temporarily lifted.

Straco’s main operating assets in China are Shanghai Ocean Aquarium, the Lixing cable car service at Mount Lishan and Underwater World Xiamen.

However, the group said it expects sentiments to improve, given the gradual de-escalation of Covid-19 measures.

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Despite the first-quarter losses, Straco said that its financial position “remains strong” with net cash holdings of S$165.7 million as at Mar 31. 

“The group will continue managing cash prudently and “be well placed to ride out this challenging time”, it added.

As for revenue, the group reported a 40.3 per cent drop to S$4.8 million, from S$8.1 million in the same period a year ago. 

The group, meanwhile, recorded a negative operating cash flow of S$3.2 million, compared to S$1.2 million in net cash generated in the first quarter of 2021.

On its outlook, Straco said it remains uncertain about how the pandemic or its abatement will eventually pan out. “Any recovery in business performance will likely be gradual,” it said.

In the meantime, the group will continue with various cost-cutting and cost-containment measures. Nevertheless, it said it is still cognisant of the need to look after the well-being and welfare of its workforce.

The counter closed flat at S$0.42 on Tuesday.