Straits Times: Thu, Jul 26
METRO Holdings yesterday defended its practice of selling real estate assets and hoarding cash as shareholders raised concerns over operating profits at its annual general meeting.
'The fact that we have a big cash hoard now is not by accident,' director Gerald Ong told the meeting at Mandarin Orchard.
Noting that Metro had been 'divesting our projects that are non-core, systematically' over the past three years, he said keeping cash proceeds on hand allowed it to 'ask for better terms' during times of global turmoil.
'The key to us here is actually recycling cash... We look at projects all the time. Going forward, we have only five more real estate assets left and a lot of cash. So you all need to draw your own conclusions,' he added.
These five properties are in Shanghai, Guangzhou, Beijing and Tokyo. Metro sold off only Metro City in Beijing in the financial year ended March 31, recording a $98.7 million gain on the disposal of the asset.
This one-off gain made up the bulk of the $114.6 million it recorded for 'other income including interest income' for the year. That same item was only $47.4 million the preceding year.
Net profit was $91.9 million, up from $82.2 million last year. Revenue for the period grew from $175.2 million to $187 million.
But some shareholders said the profits were not in line with group managing director Jopie Ong's large pay package of $8.9 million last year.
Mr Vernon Goh, who holds 10,000 shares, told The Straits Times that while he was confident of the firm's business model, other companies with higher profits had paid their chief executives less than that last year.
Earnings per share stood at 11.3 cents. At the meeting, shareholders approved a final dividend of two cents and a special dividend of four cents.
The counter closed unchanged at 82 cents yesterday.
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