Higher income from investments - including $20 million in interest income - and fair value gains of $14.6 million on investment properties boosted second-quarter earnings for Straits Trading Company.
Net profit quadrupled to $33.9 million from $8.5 million in the same period last year. For the three months ended June 30, revenue increased 14.5 per cent to $116.3 million due to higher turnover from its tin mining and smelting and real estate segments.
The real estate segment, comprising its property portfolio, investments in Straits Real Estate, Suntec Reit and ARA Asset Management, saw a huge jump in net earnings to $34.1 million from $8.2 million a year ago.
This was due to the fair value gain of residential properties in Singapore and Japan, as well as higher interest income from the notes issued by its joint venture. Its resources segment, however, saw lower earnings due to lower recovery yield and higher operating expenses.
The hospitality segment - which includes its investments in Far East Hospitality and Far East Hospitality Trust - saw net profit reverse into net losses.
Earnings per share surged to 8.3 cents from 2.1 cents in the year-ago period. Net asset value per share dipped to $3.55 as of June 30, from $3.62 six months ago.
AT A GLANCE
REVENUE: $116.3 million (+14.5%)
NET PROFIT: $33.9 million (+298.8%)
As of end-June, the group's cash and cash equivalents stood at $215.7 million. The group has also said it intends to institute a share buyback.
Straits Trading shares ended one cent lower at $2.01 yesterday. The results were announced after market close.