Metro reports lower 1HFY2024 earnings, acquires 20% stake in VisionCrest for up to $40 million
Good quality, freehold strata-titled offices near Orchard Road with full floorplates are limited, says Metro
Metro Holdings has reported earnings of $8.2 million for its 1HFY2024, down 51.5% y-o-y, as the combination of higher financing costs, weaker retail earnings and fair value on its UK properties booked weighed down on the bottomline.
On the other hand, the company booked a lower share of fair value loss on its investment properties in China.
Revenue in the same six months ended Sept period was down 6.9% y-o-y to $50.2 million, with lower rental income contributing to the dip as well.
“Metro continues to be vigilant, actively monitoring our cash, leverage levels, debt maturities and funding sources, and proactively managing our existing investment portfolio, for optimal returns," says chairman Winston Choo.
"On the business development front, Metro continues to proactively seek value accretive investment opportunities to maximise shareholder value,” adds Choo, a retired lieutenant general.
As part of its ongoing bid to grow its property business, Metro announced it is spending up to $40 million to take an effective stake of 20% in VisionCrest Commercial along Penang Road.
Metro CEO Yip Hoong Mun calls this acquisition a "unique opportunity" in the prime Orchard Road area.
"Good quality, freehold strata-titled offices with full floorplates are limited. The property is also nearly fully-let, thus providing an immediate rental income," says Yip.
"We are also glad to forge the strategic collaboration with the two proven real estate partners for this investment in Singapore," he adds, referring to partners, an affiliate of TE Capital Partners and an unnamed third party, holding 29.9% and 50.1% respectively.
Citing the cloudy macro environment, Metro says it will "exercise caution and prudence" as it actively manages its investment portfolio.
As at Sept 30, Metro's net asset value per share was $1.72, versus $1.76 as at March 31.
Metro shares last changed hands at 53 cents, up 6% thus far today but down 15.87% year to date.
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