Straco Corporation has reported earnings of $4.4 million for its 3QFY2021 ended Sept, down 32.4% y-o-y. Revenue in the same period was down 7% y-o-y to $13.7 million, as the effects of the pandemic weigh down its operations.
While the company was profitable, it explains that the bottomline was helped by favourable forex, wage subsidies and rental waiver.
See: Investors going nowhere but these travel stocks may go somewhere
The company, whose main business was to run various tourism attractions in China, and the Singapore Flyer here, notes that while its operations in China were allowed to run normally and has “shown recovery”, there were “short periods” of suspension, as local governments sought to curb the spread of the mutated strain of the virus.
However, Singapore’s tourism sector, which leans heavily on international visitors, continues to be hurt.
As at Sept 30, the company has a cash balance of $173.1 million which works out to just over 20 cents per share.
See also: Trump wins Republican nomination, setting up rematch with Biden
Straco believes its “measured response” to the challenging business landscape will allow it to weather this difficult period brought about by the Covid-19 pandemic.
“Meanwhile, like all operators in the tourism and hospitality sector, we are cautiously optimistic that business environments will gradually improve with further lifting of travel restrictions.
“The group will continue to monitor the situation, and be operationally ready to receive the influx of both local and international tourists to its attractions when the situation improves,” Straco adds.
For more stories about where the money flows, click here for our Capital section
Straco closed Nov 18 at 48 cents, unchanged for the day, and down 12.73% year to date.
Photo by Samuel Isaac Chua of The Edge Singapore
