The Straits Trading Company Limited reported earnings of $5.5 million for 1H20 ended June, down 87.1% from the $42.5 million a year ago.

The group said that the lower earnings were due to the lower valuations of investment properties, losses in its hospitality associate, disruptions in the supply and demand chain for tin, as well as a decline in the market value of investment securities over the half-year period arising from Covid-19.

Earnings per share (EPS) for the same period stood at 1.3 cents compared to the 10.4 cents registered a year ago.

Total revenue fell 37.6% y-o-y to $135.0 million, mainly due to the lower revenue contribution from its tin mining and smelting segment, and slightly mitigated by revenue from its property arm.

Revenue for the company’s tin mining and smelting segment fell 41.5% y-o-y to $115.2 million, while its property revenue rose 2.4% y-o-y to $19.8 million.

The decrease in tin mining and smelting revenue was mainly due to the lower average tin prices and lower sales quantity of refined tin, as the Movement Control Order (MCO) in Malaysia resulted in a disruption in the operations of the mine and the smelter.

Segmentally, the group registered losses across all its segments except its real estate segment, which saw a 43.4% drop y-o-y in earnings of $21.8 million.

Fair value changes in investment properties and financial assets saw losses of $0.8 million and $4.2 million respectively, in comparison to gains of $5.7 million and $5.0 million in 1H19. The fair value loss in investment properties was due to the lower valuation for the group’s retail mall in China. The loss in financial assets were related to mark-to-market losses from short-term investment securities.

Share of results of associates and joint ventures saw a 78.3% y-o-y plunge to $5.1 million due to the impact of Covid-19, which resulted in lower valuations for the retail malls portfolio in Malaysia, hospitality business, and absence of one-off income and divestment gains booked in 1H19.

Notably, the group registered exchange gains of $6.4 million compared to the $1.6 million loss registered in 1H19. The gain was mainly due to a stronger Australian dollar arising from the group’s investments in debt instruments and cash balances in Japanese yen and US dollars.

In 1H20, Straits Real Estate (SRE), the group’s 89.5%-owned real estate investment arm grew assets under management to $1.8 billion.

ARA Asset Management Limited also registered growth in assets under management to $110 billion, ahead of its target of $100 billion by 2021.

In May, the group increased its ownership in ARA to 22.06% from 20.95%.

Its 30%-owned hospitality arm, Far East Hospitality reported a loss for the period due to the negative impact brought about by the pandemic.

“Going forward, the Group will remain attuned to the changing lifestyle trends amidst the pandemic and adapt our business model to keep abreast of these developments. At the same time, we will continue to seek and add value in this new normal, while identifying suitable sectors and markets where we are confident we can leverage on our strengths in pricing risks as well as identifying arbitrage and upside opportunities in a post-Covid world,” says executive chairman Chew Gek Khim.

As at end June, cash and cash equivalents stood at $260.0 million.

Shares in Straits Trading closed 2 cents lower, or 1.3% down, at $1.54 on August 14, prior to the announcement.