SINGAPORE (Aug 14): The Straits Trading Company recorded 2Q19 earnings of $25.3 million or 6.2 cents per share, 25.5% lower than $33.9 million in 2Q18.
This brings 1H19 earnings to $42.5 million, 2.4% lower than $43.6 million in 1H18.
Revenue for 2Q19 was 9.4% lower at $105.4 million from $116.3 million a year ago, mainly due to a 13.3% drop in sales from the group’s tin mining and smelting segment to $95.5 million, as a result of lower sales quantity of refined tin.
The revenue drop was partially offset by a 63.2% increase in property revenue to $9.8 million, due to the increase in rental from the additions to the overseas portfolio.
Interest income fell 19% to $16.2 million while other income dropped 36.2% to $1.3 million.
Fair value changes in investment properties dropped 61.3% to $5.7 million.
Total expenses fell by 11.6% to $107.5 million from $121.6 million a year ago, with employee benefits expense, amortisation expense, costs of tin mining and smelting, as well as exchange losses increasing during the period.
As at end June, the group’s cash and cash equivalents stood at $289.6 million.
Chew Gek Khim, executive chairman of Straits Trading, says, “Straits Real Estate (SRE) is growing as a major real estate player in the region and targeting attractive investment opportunities underpinned by sustainable demand in the Asia Pacific. We also expect to continue to benefit from the growth of ARA’s multi-platform, multi-product global fund management business. Our platforms are bearing fruits and we believe Straits Trading remains a strong value proposition for investors. We view Malaysia Smelting Corporation’s migration to the Pulau Indah smelter by 2020 as a key catalyst for its longer-term growth.”
“However, with geopolitical uncertainties in play, we will take a disciplined approach in making investments with a deliberate longer-term view. In line with this, we will be focusing on regions with better fundamentals and themes that offer better risk-adjusted returns,” adds Chew.
Shares in Straits Trading closed at $2.19 on Wednesday.
