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Metro sinks $41.7m into three Chinese properties

Posted on 15 Nov 2009 | Comments Off

MAINBOARD-LISTED Metro Holdings announced yesterday that it is investing $41.7 million to acquire stakes in three developments in Anshan, Fushan and Qinhuangdao, in a move aimed at building its presence in China.

Crown Investments Ltd, a wholly-owned subsidiary of Metro China Holdings, has set up an associated company, Diamond Wind Company Limited. Crown holds a 21.4 per cent stake in Diamond Wind and the balance 78.6 per cent is held by an independent party controlled by a Hong Kong-based private property equity fund.

Diamond Wind was incorporated to acquire a 50 per cent stake in each of three companies – Sunelite China Investment Holdings Ltd, Northeast Asia Investment & Development Holdings Ltd and Tesco Anshan Co Ltd (collectively HK Holding Companies) – and Diamond Wind has entered into share purchase agreements with their holding company, China Property Holdings (HK) Limited (CPHL). CPHL is a wholly-owned subsidiary of grocery retailer giant Tesco plc.

Diamond Wind plans to invest US$137.8 million in the three companies to develop three properties in Anshan, Fushun and Qinhuangdao, of which Crown’s share of the investment is US$30 million. This gives Metro a 10.7 per cent stake in HK Holding Companies.

Separately, the property developer and retailer released its results for the second quarter ended Sept 30, 2009. Net profit came in at $9.33 million compared with a loss of $4.9 million in the previous corresponding quarter while revenue grew by 7.4 per cent to $36.24 million.

Earnings per share for the quarter was 1.48 cents versus a loss of 0.77 cents in the previous corresponding quarter.

For the six months ended Sept 30, net profit totalled $22.41 million, up from $671,000 previously. Revenue was up 5.1 per cent at $69.68 million.

Metro shares rose one cent yesterday, closing at 76 cents.

Source : Business Times – 14 Nov 2009

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Tagged China Property, Diamond Wind Company, Metro, Metro Holdings

Metro posts robust $9.3m net profit for Q2

Posted on 15 Nov 2009 | Comments Off

METRO Holdings yesterday posted a second-quarter net profit of $9.3 million, reversing losses of $4.9 million in the same quarter last year.

The main reason for the dramatic turnaround was that last year’s second quarter was hit by a $9.3 million paper loss in the fair value of its property division’s portfolio of short-term investments.

Revenue in the period ended Sept 30 rose 7.4 per cent to $36.2 million.

For the half year, net profit shot up to $22.4 million from $671,000 previously on a 5.1 per cent rise in revenue to $69.7 million.

Leaving aside the big second-quarter hit last year, the property developer and retailer attributed the robust performance to higher rental income from three of the group’s properties in China: the Metro City, Beijing; Metro Tower, Shanghai; and GIE Tower.

Metro chairman Winston Choo said he remained optimistic on its long-term growth prospects in the China property market.

As of the end of September, Metro’s five properties in China and Malaysia enjoyed healthy occupancy rates averaging 92.3 per cent despite the challenging global economic conditions.

‘At the same time, we will continue to build on the occupancy of our three newly completed properties in Beijing, namely, ECMall, 1 Financial Street and Metropolis Tower,’ he said.

During the quarter ended Sept 30, Metro’s core property division achieved revenue growth of $13.4 million, up 11.1 per cent from $12.1 million previously.

Its retail turnover rose 5.3 per cent to $22.8 million despite poor consumer sentiment, as promotional events bore fruit.

The group continued to enjoy a strong balance sheet, reflecting a healthy cash position of $201.8 million as of Sept 30.

Earnings per share for the quarter was 1.48 cents, reversing from a loss per share of 0.77 cent previously. Net asset value per share was 146.8 cents as of Sept 30, down from 148.3 cents at March 31.

Looking ahead, Metro expects a stable stream of rental income from its four Grade A properties: Metro City, Beijing; Metro City, Shanghai; Metro Tower; and GIE Tower.

On the retail side, the group expects the performance of the Singapore and Indonesian economies to continue to impact the retail trade. The group’s new Metro Department Store at the City Square Mall in Singapore had its soft opening in late September and has started contributing to its retail revenue.

Source : Straits Times – 14 Nov 2009