Metro warns of challenging outlook as profit slumps

SINGAPORE — Mainboard-listed property developer and department store operator Metro Holdings warned of challenging times ahead as it reported yesterday its full-year net profit fell 20.8 per cent, mainly due to lower contributions from associates, foreign exchange translation losses, and the lack of a one-off gain previously enjoyed. For the fiscal year ended March 31, net profit plunged to S$113.1 million from S$142.9 million a year earlier, even as revenue rose 6 per cent to S$154.6 million.

Metro declared a final dividend of 2 cents and a final special dividend of 5 cents per ordinary share, up 1 cent from the previous year.

“The market sentiment of Singapore’s residential property sector remains cautious, and sales of the group’s residential project, The Crest at Prince Charles Crescent, continue to be weak. For the retail division, the outlook remains challenging, especially with the competitiveness of the industry, discounted trading environment and high operating costs,” said Metro in a statement before the stock market opened.

“The group has ceased operations at Metro Sengkang and Metro City Square in 2015 upon the expiry of their leases and expects Metro Centrepoint’s sales to remain affected as The Centrepoint has been undergoing a makeover since May 2015.”

Metro, whose footprint spans Singapore, Indonesia, China and the United Kingdom, said shares of results of associates fell to S$75.7 million from S$131.1 million, mainly due to the negative goodwill of S$57.4 million in relation to Chinese developer Top Spring, which was recognised in the last fiscal year.

In addition, the previous fiscal year’s results included a one-off gain of S$21.7 million from the group’s disposal of a 10.7 per cent interest in the associated firms owning six Tesco Lifespace developments in China.

General and administrative costs rose to S$42.9 million in the current fiscal year from S$29.9 million previously due to unrealised foreign exchange losses on bank balances, it said.

For the fourth quarter, Metro had an 84.8 per cent drop in net profit to S$1.2 million as revenue fell 21.9 per cent to S$32.6 million with the retail division ceasing operations of Metro Sengkang and Metro City Square.

Metro shares fell 3.7 per cent to close at S$1.05 yesterday on the Singapore Exchange, compared with a 0.2 per cent gain in the benchmark Straits Times Index.