SINGAPORE - Second quarter earnings at retail and property development group Metro Holdings fell 12.6 per cent to S$16.2 million on the back of store closures.
Revenue for the three months ended Sept 30 decreased 26.1 per cent to S$28.3 million, from S$38.3 million a year ago. The dip was mainly due to the closures of Metro Sengkang and Metro City Square, which led the company's retail division to register a S$9.3 million decrease in revenue to S$26.7 million.
Stable sales at other outlets mitigated the impact of the closed department stores, the company said. In addition, overall profitability in Indonesia "improved marginally".
The group's property division recorded a decrease in revenue to S$1.6 million in the quarter, from S$2.3 million a year ago, largely due to the lower rental contribution following the sale of Frontier Koishikawa, Tokyo, last August. Revenue was also affected by a weaker yuan during the period.
"With the proceeds from recent divestments, we will continue to prudently deploy capital to accretive investments in both China, our core market, as well as new geographical markets such as the UK, working alongside experienced and reputable partners," said the company's chairman Winston Choo.
Metro said its retail division will continue to face challenges such as the competitive trading environment, a slower domestic economy and higher operating costs.
Meanwhile, its property division in China is expected to receive stable rental income from the GIE Tower investment property in Guangzhou. Enhancement work also continues on the last level of Metro City, Shanghai, and about two thirds of the next phase of office and skirt retail space at the group's Nanchang project have been pre-sold.
The outlook for Singapore's residential property sector remains cautious and sales at The Crest at Prince Charles Crescent - the company's residential project - hence continue to be weak, it said.