Straco Corporation Faces Revenue Challenges Amid Currency Losses

Straco Corporation Limited has announced its unaudited financial performance for the third quarter of 2024, revealing a notable decline in revenue and profit. The company’s revenue for Q3 2024 decreased by 11.4% to S\$31.43 million, down from S\$35.46 million in the same period of 2023. This decline is attributed to reduced spending among Chinese tourists and increased competition affecting its aquarium operations in Shanghai and Xiamen.

Despite these setbacks, the Group’s Singapore Flyer operation experienced a boost in revenue and profitability, driven by a rise in international visitors and local support. However, the weakening of the Renminbi currency significantly impacted the Group’s profitability, with an exchange loss of S\$1.2 million recorded in Q3 2024, compared to an exchange gain of S\$0.23 million in Q3 2023. Consequently, the net profit for Q3 2024 was S\$11.67 million, reflecting a 28.6% decrease from S\$16.34 million in Q3 2023.

Over the first nine months of 2024, Straco’s cumulative revenue showed a marginal decrease of 0.3% to S\$67.33 million, while the net profit stood at S\$22.16 million. Operating profit for the same period declined by 4% to S\$33.28 million. Despite the challenges, the Group maintains a robust financial position with net cash holdings of S\$172.51 million as of 30 September 2024.

Looking forward, Straco remains cautiously optimistic about the tourism industry’s recovery, particularly in Asia. The company continues to explore strategic investment opportunities to capitalize on the anticipated tourism boom in the region, leveraging its experience in the China market to form strategic alliances.

Shareholder Alert: The significant currency loss and competitive pressures in China may impact share value. Investors should monitor these developments closely as they could affect future profitability and growth prospects.

Disclaimer: The information presented here is based on unaudited financial results and should not be construed as financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.