Metro 1Q earnings down 47.5% to $10.6 mil on higher costs, lower JV contributions

The increase in finance costs was mainly due to interest expense of $3.8 million on the notes issued by the company pursuant to its $1 billion multicurrency debt issuance programme, while the fall in share of joint ventures’ results was mainly attributable to losses incurred from The Crest, Singapore, and absence of $2.3 million gain from the sale of Acero Works, an office building in Sheffield, United Kingdom, recognised in 1Q19.

Revenue for the quarter saw an 85.4% jump to $55.9 million from $30.2 million a year ago, as the property division recognised revenue of $27.2 million from the sale of property rights of the residential development properties in Bekasi and Bintaro, Jakarta. The retail division reported lower sales.

Consequently, cost of revenue increased 74.6% to $51.7 million, which led to a gross profit of $4.2 million in 1Q20 compared to $0.7 million in 1Q19.

As at June 30, Metro’s cash and cash equivalents stood at $286.2 million.

Looking ahead, Metro says the group’s portfolio of investments, held at fair value through profit or loss, will continue to be subject to fluctuations in their fair value. The group therefore will continue to be subjected to significant currency translation adjustments on foreign operations which will affect the results and other comprehensive income and the balance sheet, as a major portion of its net assets which mainly represent investment properties and projects situated in China, are denominated in the Renminbi and Hong Kong dollar. Some of the group’s net assets are also denominated in British pounds and Indonesian rupiah.

Meanwhile, the retail division continues to operate amid difficult trading conditions.

Shares in Metro Holdings closed at 96 cents on Tuesday.