SINGAPORE (Feb 13): Metro Holdings has posted earnings of $20.5 million for 3Q17, a 63.3% decline from $56 million in 3Q16 due to lower income from its associates.

As a result, earnings per share (EPS) for the property firm and operator of department stores has dropped to 2.5 cents for the quarter from 6.7 cents in the previous corresponding period.

The decline in overall group earnings was mainly due to profit before tax (PBT) for Metro’s core property division falling to $20.4 million in 3Q17 from $58.8 million a year ago. This was largely attributable to a $48.9 million decrease in share of results of associates in 3Q17 as a result of lower sales recognition on handover of properties for the group’s Nanchang project.

Also contributing to the decline in PBT was a $10.1 million dip in the group’s share of Top Spring International Holdings Limited’s results, brought on by the significantly lower recognition of presales on the handing over of properties.

Overall, group revenue for the quarter fell 9% to $37.3 million from $41.0 million in the previous year, largely due to the lower revenue contribution from the closure of the retail division’s Metro City Square department store in mid 3Q16.

Revenue from its property division was also affected by the weakening of the Renminbi, which led to a decrease of $0.3 million to $1.6 million in 3Q17.

However, the property segment’s results excluding associates and joint ventures improved to $11.6 million during the quarter as compared to a loss of $4.6 million in 3Q16 – mainly due to the presence of unrealised exchange gains on bank balances of $9.3 million as compared to 3Q16, in which exchange losses and overhead costs were recorded.

In its outlook, the group says it expects to continue receiving stable income streams from its properties in China, but expects its retail division to continue being beset by challenges including a competitive trading environment, slower domestic economy, and high operating costs.

Metro chairman Winston Choo notes that despite volatile economic conditions, the group’s net cash holdings have “served as a good cushion to diminish the effect of headwinds”.

“We remain highly focused on executing our strategy to recycle capital in an efficient manner and building sustained business profitability. Furthermore, we intend to continue leveraging on our strong track record and synergistic long-standing relationships with partners. These have led to fruitful investment returns through the years of our collaborations, and we strive towards continuing on this path going forward,” says Choo.

Shares of Metro closed 1.3% higher at $1.16 on Monday.