Straits Trading’s H2 net loss narrows to S$43.5 million

STRAITS Trading Company reported a net loss of S$43.5 million for the second half year ended December 2023, narrowing from the prior year’s H2 net loss of S$121.8 million.

This comes as its real estate segment – which remained the main contributor to the mainboard-listed group’s performance – posted a lower fair value loss from certain investment properties in Australia, China, South Korea and the UK.

On Tuesday (Feb 27), Straits Trading said its hospitality segment also returned to profitability in H2 on the back of stronger operating performance, compared to a loss reported in the year-ago period.

Positive demand in this segment from international travel was however partially offset by higher operating expenses due to inflation and higher staff costs.

Profit for the resources segment over the period grew year on year as well, due to the company’s cost-control initiatives and the optimisation of production processes.

Total revenue for the half-year was down 0.6 per cent to S$255.9 million versus S$257.5 million previously, as a rise in property revenue was more than offset by lower tin mining and smelting revenue.

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Loss per share (LPS) for H2 FY2023 stood at S$0.097, as opposed to an LPS of S$0.285 in the prior year.

For FY2023, Straits Trading registered a net loss of S$28.6 million as opposed to a S$551.3 million profit in the prior year, with an LPS of S$0.064 compared to FY2022’s earnings per share of S$1.27.

Revenue declined 6.8 per cent to S$491.7 million from S$527.6 million in FY2022. 

Straits Trading nonetheless said its performance for the financial year was “resilient” amid a challenging global business environment that was “weighed down by elevated cost of funding and macroeconomic uncertainty”.

It also noted fewer transaction volumes as a high interest and capitalisation rate environment put downward pressure on the valuation of real estate assets.

As at end Dec 31, 2023, Straits Trading had S$458.1 million in cash and cash equivalents compared to S$251.7 million in the same period last year.

The group said this would enable it to pursue its business of active capital recycling, enhancing real estate operations through a value-add strategy, and seeking out optimal risk-adjusted returns in the use of capital.

“Having taken prudent measures to bolster its various businesses, Straits Trading is well placed to withstand economic and geographical headwinds. The group remains optimistic that the resources and hospitality businesses will continue to benefit from the industry cyclical tailwinds.”

Shares of Straits Trading ended Monday S$0.01 or 0.6 per cent higher at S$1.61.