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Straco's Q4 profit down 21.4% on acquisition-related expenses

One-off expenses related to the acquisition of the Singapore Flyer amounting to S$1.98 million, coupled with an exchange loss of S$37,000 versus an exchange gain of S$0.48 million from the corresponding period a year ago, dragged tourism operator Straco Corporation's Q4 FY14 net profit down 21.4 per cent to S$4.43 million.

For the three months ended Dec 31, 2014, Straco's operating and administrative expenses surged 82.2 per cent to S$6.02 million, mainly attributable to expenses incurred by its subsidiary, Straco Leisure, as it took over the operation of the Singapore Flyer in late November last year.

Excluding the one-off expenses, Q4 FY14's net profit was approximately S$6.21 million, 10.3 per cent higher than the same period a year before.

Revenue for the three months ended Dec 31, 2014 was up 32.8 per cent to S$19.42 million, as Straco's Shanghai Ocean Aquarium, recorded higher visitor numbers, and due to the inclusion of revenue contributions from the Singapore Flyer.

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Straco's FY14 revenue jumped 26.7 per cent to S$92.32 million and net profit gained 10.5 per cent to S$37.69 million.

Excluding acquisition-related costs, which amounts to S$2.19 million, net profit was S$39.66 million, 16.3 per cent above that of FY13.

A slower seven per cent growth target is expected for the Chinese economy in 2015, however. Straco's executive chairman, Singapore entrepreneur Wu Hsioh Kwang, expects domestic travel in China to continue to rise in line with the government's initiatives for the tourism industry.

The increasingly larger domestic tourism market will boost the development of China's tourism industry, and it is expected that the tourism industry in China still has another decade of booming growth, Straco said in a statement on Monday.

Earnings per share for the three months ended Dec 31, 2014 stood at 0.52 cents, down 22.4 per cent from the corresponding period a year ago while net asset value per share was 22.02 cents.

A first and final dividend of two cent per share was declared for the quarter.

On Monday, Straco's counter closed up 2.03 per cent at S$0.755.