SINGAPORE - Retailer and property group Metro Holdings said its third quarter net profit plunged by 63.3 per cent to S$20.5 million.
Revenue for the three months to Dec 31 fell by 9 per cent to $37.3 million, largely due to the lower revenue contribution from the closure of the retail division's Metro City Square department store in middle of the previous corresponding quarter.
Metro's core property division registered a fall in pretax profit to S$20.4 million from S$58.8 million previously, mainly from a S$48.9 million decline in share of results of associates.
This was mainly due to lower sales recognition on handover of properties for the Nanchang project.
It was also contributed by a S$10.1 million dip in the share of Top Spring International Holdings' results, brought on by the significantly lower recognition of presales on the handing over of properties.
Revenue from the property division was also affected by the 5.9 per cent weakening of the Chinese yuan during the quarter.
This caused revenue to decrease by S$300,000 to S$1.6 million.
Segment results excluding associates and joint ventures however improved to S$11.6 million during the quarter from a loss of S$4.6 million in the previous corresponding period.
This was mainly due to the presence of unrealised exchange gains on bank balances of S$9.3 million as compared to the third quarter of 2016, in which exchange losses and overhead costs were recorded.
Overall, Metro's three investment properties' occupancy rate as at Dec 31 was 91.1 per cent.
As for the retail division, the closure of Metro City Square resulted in a S$3.4 million dip in revenue to S$35.7 million.
However, a slight revenue improvement of existing department stores, coupled with costs containment initiatives, led to a turnaround in the retail division's Singapore operations, from a loss of S$300,000 previously to a profit of S$100,000.
The division registered higher overall profit of S$1.3 million compared to S$600,000, helped by cost reduction measures that were offset by weaker operations in Indonesia.
Earnings per share eased to 2.5 cents from 6.7 cents previously while net asset value per share eased to S$1.64 compared to S$1.66 as at March 31.
Looking ahead, Metro said the property division is expected to continue receiving stable rental income streams from its GIE Tower investment property in Guangzhou, China, as well as from the Metro City and Metro Tower properties in Shanghai, China, held at the joint ventures' level.
Given the weak market sentiment of Singapore's residential property sector, sales of the group's residential project - The Crest at Prince Charles Crescent - is expected to be sluggish.