Metro Holdings reports fall in profits for 1HFY23 due to lockdowns, lower JV profits and rental rebates in China

Lim Hui Jie

11 November 2022 at 1:32 am·2-min read

The company recorded a higher revenue, largely due to its retail division.

Metro Holdings has reported a net profit after tax of $16.8 million for its 1HFY2023 ended 30 September, compared to $18.4 million in the same period a year ago.

Revenue for Metro came in at $53.9 million in 1HFY2023, as compared to $40.8 million in 1HFY2022.

This was largely due to its retail division reporting higher sales of $47.3 million in 1HFY2023 from $35.3 million in 1HFY2022.

For its two Singapore department stores, 1HFY2022 saw shorter operating hours from May 17, 2021 to August 18, 2021 during Singapore’s Phase 2 and Phase 3 (Heightened Alert) measures.

The retail segment reported a profit of $3.3 million in 1HFY2023, compared to a loss of $0.7 million in 1HFY2022 in line with higher revenue and improved margins.

However, Metro’s retail business continues to be impacted by the higher inflation-driven costs in raw material, labour and energy amidst a highly competitive trading environment.

Separately, its property division’s revenue for 1HFY2023 increased to $6.6 million from 1HFY2022’s $5.5 million, mainly due to higher sales of property rights of the residential development properties in Bekasi and Bintaro, Jakarta.

Property segment, excluding finance costs, associates and joint ventures, reported a lower profit of $5 million in 1HFY2023 as compared to $6.3 million in 1HFY2022.

Metro saw a lower share of profit of joint ventures due to lower contributions from investment properties in China.

This is in addition to rental rebates and waivers granted to tenants brought about by disruptions from China’s zero Covid-19 policy, and sporadic lockdowns in 1HFY2023.

The profit loss was partially offset by higher profit from associates in Australia, owing to an increased stake of 30% in a portfolio of properties there, as well as a lower loss from the contributions of investment properties in China

The average occupancy rate for Metro’s five investment properties – GIE Tower in Guangzhou, China; Metro City and Metro Tower in Shanghai, China; a freehold office property at Chancery Lane in London, UK; and Asia Green, Singapore – remain high at 91.1% as at Sept 30.

Metro’s balance sheet remained strong with net assets of $1.6 billion and total assets of $2.4 billion as of 30 September 2022.

Shares of Metro closed flat at 65 cents on Nov 11.

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