SINGAPORE (June 25): Metro Holdings has announced 2H20 earnings (or net profit) of $11.3 million compared to $62.4 million a year ago, mainly due to the fair value adjustments of its investment properties, joint ventures of $8.5 million, as well as rental rebates and waivers granted to tenants arising from the Covid-19 outbreak.

The group’s earnings for the full year fell 66.5% to $32.2 million from $96.3 million the year before. The losses were partly mitigated by the divestment gain of $10.6 million from the disposal of the group’s 50% equity stake in its retail associate in Indonesia, PT MRM.

See: Metro disposes 50% stake in PT Metropolitan Retailmart for $25 mil

Revenue for 2H20 fell 14.6% y-o-y to $81.5 million.

Revenue for the full year, however, rose 22.3% y-o-y to $210.3 million, driven mainly by the sale of property rights of the residential development properties in Bekasi and Bintaro, Jakarta.

Metro’s retail revenue fell 16.6% y-o-y to $108.9 million mainly due to the closure of Metro Centrepoint in October 2019 upon its lease expiry, as well as lower sales in departmental stores in Singapore arising from the shortened hours due to the social distancing measures in February and March.

A profit of $10.4 million for the year was registered for this segment due to the divestment gain of $10.6 million from the sale of Metro’s 50% equity interest in PT MRM, its associate company in Indonesia.

Excluding the divestment gain, Metro retail’s Singapore operation segment for FY20 recorded a lower operating loss of $0.2 million compared to the $7.1 million loss in FY19 due to higher profit and absence of provision for stock obsolescence and impairment of fixed assets recorded in FY19.

Metro’s property segment profit fell 12.2% y-o-y to $23.8 million due to the unrealised fair value loss of $7.9 million on short term and long term investments in FY20 due to the Covid-19 outbreak in early 2020.

A $2.5 million fair value loss on investment property for FY20 was booked in relation to GIE Tower in Guangzhou, compared to the $14.7 million gain last year.

Share of results of joint ventures came in 14.3% lower y-o-y at $55.9 million for FY20. This was mainly attributable to lower fair value gain on investment properties owned by joint ventures of $1.4 million in FY2020 arising from revaluation loss on its China properties.

This was partially offset by revaluation gain from the group’s newly acquired 50% stake in Tampines Grande, Singapore, and mitigated by higher share of operating profits from higher contributions from The Crest, Metro City, and Metro Tower.

The board has recommended an ordinary final dividend of 2 cents per share for FY20.

In FY20, Metro expanded its portfolio in China, Singapore, and Australia.

In April 2019, the group acquired a 50% stake in Tampines Grande, two blocks of premium Grade-A Green Mark Platinum Award office buildings.

In May 2019, the group acquired a 25% stake in a prime commercial mall in Chengdu, China.

In November 2019, Metro acquired a 20% stake in a portfolio of 14 quality freehold office and retail properties in Australia.

See also: Metro to invest $89.7 mil for 20% stake in portfolio of 14 Australian properties

Subsequently, the group invested a 20% equity stake in Sim Lian - Metro Capital, its newly incorporated asset and investment management company, to manage its Australian portfolio.

In its outlook statement, Metro says its average occupancy rate of its five investment properties remain at 94.3% as at March 31.

“Amidst the uncertain economic outlook and evolving COVID-19 pandemic situation, Metro continues to take proactive measures to strengthen our financial position, including preserving cash, optimizing cash flows and liquidity, and also actively manage our existing investment portfolio for optimal returns,” says Winston Choo, chairman of Metro.

Shares in Metro closed flat at 75.5 cents on Wednesday.