STC’s board has proposed an interim dividend of 8 cents per share, flat y-o-y.

The Straits Trading Company (STC) has posted a shallower loss after tax and non-controlling interests of $7.2 million in FY2024 ended Dec 31, 2024, improving from a $28.6 million loss in FY2023. 

In financial statements released on Feb 28, STC says the improved performance was mainly due to net fair value gain from investment properties, partially offset by fair value loss from the derivative component of exchangeable bonds, which had returned a fair value gain in the previous year. 

STC’s FY2024 ebitda rose 56.6% y-o-y to $124.4 million, while FY2024 profit after tax swung into the black to $11.0 million from a loss after tax of $12.1 million in FY2023. 

For the full year, STC posted a loss per share of 1.6 cents, improving from a loss per share of 6.4 cents in FY2023. 

STC’s board has proposed an interim dividend of 8 cents per share, flat y-o-y. Shareholders have the option of receiving the interim dividend wholly in scrip shares or in cash. The record date is May 9 and the dividend will be paid on June 30. 

The positive performance was primarily attributable to improved profitability across its three segments: resources, property and hospitality. STC also booked higher net fair value gains from Straits Real Estate’s (SRE) investment properties in Australia, South Korea and the UK. 

STC’s property segment reported a positive ebitda of $64.9 million in FY2024, compared to a loss of $3.6 million in FY2023. Property revenue rose to $70.6 million in FY2024 from $66.8 million in FY2023. 

The property segment reported a profit after tax and non-controlling interests of $17.6 million in FY2024, compared to a loss after tax and non-controlling interests of $35.6 million in FY2023.

“SRE continues to focus on capital recycling, value-add initiatives, and thematic investments across Australia, China, Japan, South Korea, and the UK to achieve optimal risk-adjusted returns,” says STC. 

In Malaysia, the Straits City development project in Penang, spearheaded by STC Property Management (STCPM), has crossed a new milestone with the opening of the Crowne Plaza Penang Straits City hotel in August 2024. 

STC says Straits City is “strategically located” to benefit from Penang’s growth as a global semiconductor manufacturing hub and Malaysia’s 2025 budget, which prioritises infrastructure investment and digitalisation. “Infrastructure developments, including the expansion of Penang International Airport and the construction of Penang Light Rail Transit are expected to boost tourism and create economic opportunities.”

Meanwhile, STC’s resources segment recorded a 3.2% rise in ebitda to $48.8 million in FY2024 compared to $47.3 million in FY2023, contributed by higher average tin prices. This segment is accounted for via the group’s 52%-owned Malaysia Smelting Corporation (MSC), which is separately listed in Malaysia. 

The resources segment reported a lower profit after tax and non-controlling interests for FY2024 compared with FY2023 due to weaker performance in the tin smelting segment. This was due to foreign exchange losses from the impact of the strengthened Malaysia ringgit against the US dollar, but this was largely offset by better performance in the tin mining segment driven by higher average tin prices, says STC.

STC says MSC continues to focus on operational efficiencies to enhance its market competitiveness. “With the Pulau Indah smelter fully operational and Butterworth plant set for full closure in 2025, MSC expects to benefit from lower operational and manpower costs whilst reducing its carbon emissions. Expansion efforts in mining operations will continue through joint ventures and cost-effective mining methods to enhance productivity.”

Finally, STC’s hospitality segment recorded ebitda of $5.8 million in FY2024, up from $2.7 million in FY2023. The improvement was driven by strong international travel, and increased contributions from associates and joint ventures in Australia and Europe, as well as reversal of prior year’s impairment cost. 

The hospitality segment reported a higher profit after tax and non-controlling interests in FY2024 compared with FY2023, mainly due to higher share of results from its associates and joint ventures in Australia and Europe, and reversal of previous year’s impairment cost. 

Despite economic headwinds and cost pressures, Far East Hospitality Holdings (FEHH), the group’s 30%-owned hospitality platform, will continue to optimise its portfolio through refurbishments, capital recycling and strategic expansions, says STC.

Aligned with its Straits 5.0 transformation efforts, STC partnered with Singapore’s Digital Assets Exchange (SDAX) in October 2024 to launch a fully-digital $55 million multicurrency multi-tranche commercial paper facility programme on SDAX’s platform.

The three-month Series 001 and Series 002 issuances under the SDAX CP Programme received “strong” investor participation, says STC, raising gross proceeds of $9.09 million and $11.86 million, respectively. 

STC expects global growth to remain “modest”. “While a moderation in inflationary pressures and interest rates is expected, the persistence of uncertainties — including geopolitical tensions, climate-related challenges and potential financial market disruptions — continues to present downside risks to the broader environment.”

The group adds: “In light of these conditions, a continued emphasis will be placed on prudent capital management. Notwithstanding, the group is well-poised to weather potential headwinds while seizing opportunities for growth, with $448.8 million in cash and bank balances on its balance sheet.”

Chew Gek Khim, STC’s executive chairman, says: “Our FY2024 results demonstrate the group’s ability to navigate market cycles as well as uncertainties in the macro environment. The group remains committed to a disciplined and forward-looking approach in executing our business strategy. Our priority is to seek and invest in initiatives that create long-term, scalable and sustainable value for our stakeholders.”

Shares in Straits Trading closed flat at $1.45 on Feb 28, down 2.68% over the past year.

Read more about The Straits Trading Company:

• Straits Trading Company launches second series of three-month commercial papers on SDAX (Jan 6)
• Straits Trading Company launches $55 mil multicurrency commercial paper programme on SDAX (October 2024)
• Straits Trading Company partners SDAX to offer investment opportunities to its Shareholders’ Club (October 2024)
• Straits Trading eyes new Penang hotel, tourism recovery (March 2024)
• Straits Trading reports $28.6 mil loss in FY2023 on lower revenue and higher funding costs (February 2024)