Retailer and property group Metro Holdings yesterday reported a 63.3 per cent plunge in its third-quarter net profit to $20.5 million.
Revenue for the three months to Dec 31 fell by 9 per cent to $37.3 million, due largely to lower revenue contribution from the closure of the retail division's Metro City Square department store in the middle of the previous corresponding quarter.
Metro's core property division registered a fall in pre-tax profit to $20.4 million, from $58.8 million previously, mainly because of a $48.9 million decline in share of results of associates, which was due largely to lower sales recognition on handover of properties for its Nanchang mixed-use development project in China.
The lower revenue in the property segment was also because of a $10.1 million dip in the share of Top Spring International Holdings' results, brought on by a significantly lower recognition of sales.
A 5.9 per cent weakening of the Chinese yuan against the Singapore dollar during the quarter also affected the results.
Segment results excluding associates and joint ventures, however, improved to $11.6 million during the quarter compared to a loss of $4.6 million in the previous corresponding period.
This was mainly due to the presence of unrealised exchange gains on bank balances of $9.3 million as compared to the third quarter of 2016, in which exchange losses and overhead costs were recorded.
As for the retail division, the closure of Metro City Square resulted in a $3.4 million fall in revenue to $35.7 million. But a slight improvement in the revenue of existing department stores, coupled with initiatives to contain costs, led to a turnaround in the retail division's Singapore operations, from a loss of $300,000 previously to a profit of $100,000.
The retail division registered higher overall profit of $1.3 million compared to $600,000 previously, helped by cost reduction measures.
Earnings per share eased to 2.5 cents from 6.7 cents previously while net asset value per share eased to $1.64 compared to $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 China's Guangzhou province, as well as from the Metro City and Metro Tower properties in Shanghai.
Given the weak market sentiment in Singapore's residential property sector, sales of the group's residential project - The Crest at Prince Charles Crescent - are expected to be sluggish.