Straits Trading lifts earnings despite sharp fall in turnover

A file photo of Chew Gek Khim, executive chairman of The Straits Trading Company. PHOTO: SPH
A file photo of Chew Gek Khim, executive chairman of The Straits Trading Company. PHOTO: SPH

SINGAPORE - Earnings at Straits Trading Company climbed 28.7 per cent to June 30, rising to $8.5 million in the second quarter from $6.6 million a year ago.

The growth came in spite of a 27.2 per cent drop in revenue to $101.6 million in the three months to Jun 30, on the back of lower tin production and the absence of rental income from an Australian office property sold in November 2016.

Still, earnings were boosted from a higher share of results from associates and joint ventures, compared with the hit from additional provision for prior year taxes at a joint venture last year.

Earnings per share grew to 2.1 cents, from 1.6 cents previously, while net asset value was $3.43 a share, against $3.34 as at Dec 31.

Net profit was up 4.4 per cent to $30.4 million for the half-year, against a 16.1 per cent decline in revenue to $235 million.

Executive chairman Chew Gek Khim said: "We are encouraged with the continued improvement in our earnings. Our business platforms and alliances with our business partners continue to grow and develop at a steady pace."

She noted July 2017's issuance of $150 million in fixed rate notes due in 2021. The net proceeds will go towards refinancing of existing borrowings, financing of working capital and capital expenditure.

"This platform allows Straits Trading to broaden our sources of funding and gives us much greater financial flexibility to access future growth opportunities so as to optimise returns for our shareholders," she said.

Straits Trading shares closed down four cents, or 1.6 per cent, at $2.45, before the results were announced.