SINGAPORE (May 14): Straits Trading Company reported earnings $17.3 million for 1Q19, up 78.1% from $9.7 million in 1Q18 due to higher share of results of associates and joint ventures (JVs) as well as improved overall performance across all of its business segments.
The latest set of results brings the group’s earnings per share (EPS) for the quarter to 4.2 cents as opposed to 2.4 cents in the previous year.
Group revenue for 1Q19 fell 10.4% due to lower tin mining & smelting revenue due to a decline in sales of refined tin, which more than offset property revenue growth on the back of higher rental from the additions to the group’s overseas portfolio.
Profit after tax and non-controlling interests (PATNCI) nonetheless improved across all segments with the real estate segment continuing to be the main driver of profitability, boosted by improved contribution from ARA Asset Management, in which the group owns a 20.95% stake.
PATNCI for resources grew y-o-y due to better yields from tin smelting and higher profits from the sale of by-products, while the results of the hospitality segment was also lifted by fair value gains from the group’s holdings in Far East Hospitality Trust units.
In line with the lower revenue, total expenses fell 12.4% to $114.6 million from $130.8 million due to lower costs of tin mining & smelting as well as a decline in depreciation expense, which offset higher employee benefits expenses and increased finance costs and other expenses, among others.
Share of results of associates and JVs also more than doubled on-year to $13.6 million due to improved contribution from ARA Asset Management.
“Following our record performance last year, Straits Trading has started FY19 on strong footing with a significant increase in our 1Q earnings. Together with MSC, we are exploring avenues to unlock the development potential of the freehold Butterworth land, which we believe will be a key future catalyst for us,” says Straits Trading’s executive chairman Chew Gek Khim, referring to refined tin supplier Malaysia Smelting Corp, a subsidiary of the group.
Shares in Straits Trading closed 2 cents lower at $2.16 on Tuesday.
