Metro Holdings reports 54.3% jump in Q2 net earnings, thanks to warehouse sale

Gain on disposal of assets lifted net profit of Metro Holdings by 54.3 per cent to $30.6 million for the second quarter.

Revenue edged up 2.6 per cent to $45.9 million for the three months to Sept 30.

During the quarter, Metro completed the sale of a freehold warehouse property in Singapore that had been underutilised, resulting in a gain on disposal of $29.6 million.

The boost in revenue was driven by higher rental income at the property division. Gross profit, however, was lower. It incurred refurbishment costs about $1.1 million on Metro City Shanghai.

Earnings per share swelled to 3.7 cents from 2.4 cents previously while net asset value per share dropped to $1.38 compared to $1.383 as at March 31.

On its prospects, Metro noted that costs of the property division are expected to continue to be affected by the asset enhancement refurbishment exercise being undertaken by Metro City Shanghai.

Residential sale launches are expected to be conducted for the Prince Charles Crescent project in Singapore and the Nanchang project in China.

Based on accounting policies adopted by the group, it expects to account for sales of the Prince Charles Crescent project on percentage of completion method and for the Nanchang project on a completion of contract method.

The residential properties of the Nanchang project are being sold in phases and completion of the first phase for handover is currently scheduled for late 2014 or early 2015.

The retail division continues to face trading pressure from an increase in the number of players in the retail scene and rising operational costs in both Singapore and Indonesia.