The Straits Trading Company has reported 1HFY2023 earnings of $14.9 million, versus $673 million recorded in the year.
The big drop can be attributed to the one-off recognition of $658.6 million in 1HFY2022 following the sale of its stake in ARA Asset Management.
If this gain is excluded, Straits Trading would have reported an ebitda that is 11.7% higher y-o-y, and profit after tax that's 19.2% lower y-o-y.
Besides the absence of the one-off disposal gains, Straits Trading was hit by much higher finance costs of $40.6 million, versus $17.2 million in 1HFY2022.
Revenue in the same period was $202 million, down 17.7% y-o-y, with part of the drag from lower sales in its resource segment.
Straits Trading says it remains proactive in managing interest rate and foreign exchange volatilities through hedging. For example, it recently issued $370 million in exchangeable bonds, which will give it "favourable" cost of funding, financial flexibility, and increased resilience to operate in the current environment.
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As of June 30, Straits Trading holds $354.5 million in cash and cash equivalents, compared to $251.7 million in Dec 31 2022.
“Our resilient 1H2023 results, coupled with our sound balance sheet puts us in a good position to navigate the current headwinds and positions our businesses for sustained growth," says executive chairman Chew Gek Khim.
"We remain committed to enhancing shareholder value through our Straits 5.0 transformation by introducing innovative growth engines for the company, and deepening our relationship with shareholders through meaningful engagement and unique co-investment opportunities," she adds.
As at June 30, the company's NAV per share was $3.59, down from $3.86 as at Dec 31 2022.
Straits Trading shares closed at $2.04, down 1.45% for the day and down 12.82% year to date.
