SINGAPORE (May 31): Hiap Seng Engineering declared larger 4Q losses of $9.8 million from its $1.8 million loss in 4Q17 due to a combination of declining turnover and gross profit margin, higher-than-expected operating costs, and a goodwill impairment from operations in Thailand.
The latest quarter’s results concludes FY18 with $18.9 million in losses compared to earnings of $2.5 million a year ago.
Revenue for the latest quarter under review fell 36.3% to $22.3 million from $35 million previously on lower recognition of revenue compared to a year ago.
Gross profit margin slipped to 0.8% in 4Q18 from 8.1% in 4Q17.
Cost of sales fell 31.2% to $22.1 million from $32.2 million a year ago.
Administrative costs declined 11.4% to $4.2 million from $4.8 million previously.
Over the quarter, other loss widened to $6 million compared to $0.1 million in 4Q17 largely as a result of a $4.4 million impairment of goodwill from the group’s operations in Thailand.
As at end-March, cash and cash equivalents stood at $8.4 million compared to $9.7 million a year ago.
Hiap Seng observes that while it recorded an increase in overall full-year revenue geographically in Vietnam, Thailand and UAE, contributions from Singapore and other segments have declined mainly due to a lower recognition of project revenue over the period under review.
Going forward, the group expects the oil and gas (O&G) industry to remain challenging, and says its directors are seeking suitable opportunities in new markets to mitigate any slowdown in the O&G sector of the traditional markets.
It will also continue to further control costs and take steps to improve productivity.
Shares in Hiap Seng closed flat at 12 cents on Wednesday.
