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Mainboard-listed Metro Holdings saw its net profit for the third quarter ended 31 December 2016 plunge 63.38 percent to $20.5 million, from $55.9 million during the previous year.
“This stemmed mainly from a $48.9 million decline in share of results of associates in Q3 FY2017, largely due to lower sales recognition on handover of properties for the Nanchang project,” it said in an SGX filing.
Revenue dropped nine percent to $37.3 million, mainly due to lower revenue contribution from the closure of the Metro City Square department store in mid Q3 FY2016.
With this, earnings per share fell to 2.5 cents from 6.7 cents previously.
Looking ahead, Metro expects its property division to continue to receive “stable rental income streams from its GIE Tower investment property in Guangzhou, China, as well as from the Metro City and Metro Tower properties in Shanghai, China, held at the joint ventures’ level”.
“As for the Nanchang project, future contributions will be primarily from the recognition of presales of office and retail space, of which the office space’s gross margins will be significantly lower than what was achieved for the project’s residential properties in the past,” it said.
Meanwhile, the company expects its retail division to continue to face challenging times, including a competitive trading environment, high operating costs and slower domestic economy.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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