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

STRAITS Trading's net profit for the fourth quarter ended Dec 31 more than doubled to S$29.7 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 filing on Tuesday.

Its hospitality arm, Far East Hospitality Holdings, is expected to take a hit from weak 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, presents "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.

Chew Gek Khim, executive chairman of Straits Trading, said: "We achieved outstanding financial results while strengthening the various engines of growth within our real estate ecosystem.

"This will allow us to continue delivering sustainable returns and shareholder value in the long term."

Straits Trading's performance translates to an earnings per share of 7.3 Singapore cents, up from 3.5 cents a year ago.

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

Revenue slipped 33.1 per cent to S$70 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.

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

Straits Trading shares closed flat at S$2.06 on Tuesday.