SINGAPORE (Feb 25): The Straits Trading Company posted earnings of $29.7 million for 4QFY2019 ended December, more than double than earnings $14.1 million for the corresponding quarter last year.
This lifted the group’s full-year earnings to $84.4 million, some 17.6% higher than earnings of $71.7 million reported in FY2018, representing the highest earnings recorded by the group since FY2014.
Revenue for the quarter fell 33.1% y-o-y to $70.0 million from $104.7 million. This was primarily attributable to a 37.0% decline in revenue contributions from the group’s tin mining and smelting segment to $59.8 million due to the due to lower average tin prices, as well as lower sales quantity of refined tin.
However, this was partially mitigated by a 5% increase in revenue from the property segment to $10.3 million on the back of increased rental revenue from additions to the group’s overseas portfolio.
Notably, share of results of associates and joint ventures increased fourfold to $18.1 million from $4.2 million in 4QFY2018 due to higher fair value gains from investment properties from associates and joint ventures in Japan, Malaysia and South Korea.
As at end December, Straits Trading owns a 21% stake in ARA Asset Management, a 54.8% stake in Malaysia Smelting Corporation Berhad and a 30% stake in Far East Hospitality Holdings.
The group saw a 71.6% increase in fair value gain on its investment properties to $17.5 million on the back of the revaluation of its properties in Australia, China and Japan.
Straits Trading also booked a 86.4% increase in employee benefits expense to $14.7 million due to provisions made in respect of the internal restructuring exercise for the affected employees at its resources subsidiary.
As at end-December, cash and cash equivalents stood at $310.5 million.
Earnings per share for the quarter came in at 7.3 cents, up from 3.5 cents in 4QFY2018.
The board is proposing a dividend of six cents for FY2019, unchanged from the previous year. The dividend is expected to be paid out on May 8.
In its outlook statement, Straits Trading says that the business climate has become increasingly challenging as markets continue to grapple with greater uncertainties and disruptions.
“The growing scale of the Covid-19 outbreak will have a negative impact on global markets. Against this backdrop, the group continues to exercise prudence when considering new investments,” says the group.
Shares in Straits Trading closed flat at $2.06 on Tuesday prior to the results announcement.
