Straits Trading more than doubles Q4 net to S$29.7m

Singapore

THE Straits Trading Company's net profit for the fourth quarter ended Dec 31, more than doubled to S$29.7 million from S$14.1 million, largely contributed by its real estate segment even as the group continues to "exercise prudence when considering new investments" amid the growing scale of Covid-19.

"The business climate is increasingly challenging as markets continue to deal with greater uncertainties and disruptions," noted Straits Trading in its financial report.

Straits Trading's hospitality arm Far East Hospitality Holdings, for instance, is expected to take a hit from slow travel demand amid the virus outbreak.

Its resources arm - Malaysia Smelting Corporation - also continues to face challenging market conditions on the back of a decline in tin prices and soft global demand for tin due to the long-drawn trade war.

Its real estate arm, Straits Real Estate (SRE), on the other hand, is in the pursuit of "attractive investment opportunities underpinned by sustainable demand themes in the Asia-Pacific region".

During the year, SRE had continued to increase its presence across the Asia-Pacific region through acquisitions and joint ventures.

"We achieved outstanding financial results while strengthening the various engines of growth within our real estate ecosystem," Straits Trading executive chairman Chew Gek Khim said. "This will allow us to continue to deliver sustainable returns and shareholder value in the long term."

Fourth-quarter earnings per share rose to 7.3 Singapore cents from 3.5 cents in the previous corresponding period.

Revenue slipped 33.1 per cent to S$70.0 million due to a 37 per cent fall in tin mining and smelting revenue to S$59.8 million, which was slightly offset by a rise in revenue from its enlarged property portfolio to S$10.3 million from S$9.8 million.

The group recorded an increase of 71.6 per cent in fair value of its investment properties to S$17.5 million, on the back of revaluation of properties in Australia, China and Japan. Costs of tin mining and smelting fell 37.7 per cent to S$50.1 million.

The group has proposed a dividend of six Singapore cents per share for FY2019, unchanged from FY2018.

For the full year, the group posted a 17.6 per cent rise in net profit to S$84.4 million, translating to earnings per share of 20.7 Singapore cents versus 17.6 cents previously.

Looking ahead, Straits Trading also expects to benefit from its associate ARA Asset Management (ARA)'s growth in multi-platform, multiproduct global fund management business.

Straits Trading shares closed flat at S$2.06 on Tuesday, before the results were announced.