Hyflux Q2 earnings slump on Tuaspring losses

Tuaspring has been an impediment to Hyflux's earnings since it started its power plant operations in March last year.
Tuaspring has been an impediment to Hyflux's earnings since it started its power plant operations in March last year.PHOTO: HYFLUX

Lower revenue from engineering, procurement and construction activities hurt second-quarter results for water and energy firm Hyflux.

It reported a net loss of $25.1 million for the three months to June 30, compared with earnings of $2.6 million for the same period a year earlier.

The net loss includes the up-for-sale Tuaspring plant, which the firm noted "contributed losses of $20.9 million due to weak power spreads in the Singapore market".

Tuaspring has been an impediment to earnings since it started its power plant operations in March last year. The firm said in February this year that it was exploring a partial sale of the asset.

If the impact of Tuaspring is excluded, Hyflux would have recorded a quarterly net loss of $4.2 million, compared with earnings of $35.4 million for the same period a year earlier.

Quarterly revenue dropped 65 per cent to $81.8 million, owing to lower engineering, procurement and construction activities for the TuasOne Waste-to-Energy project here and the Qurayyat Independent Water project in Oman.

  • AT A GLANCE

    NET LOSS: $25.1 million (% change not meaningful)

    NET LOSS EXCLUDING TUASPRING: $4.2 million (% change not meaningful)

    REVENUE: $81.8 million (-65%)

This was partly offset by turnover recognised for Hyflux's projects in Saudi Arabia, which began construction during the quarter.

The firm said it recorded a gain of $16.5 million after selling its 50 per cent stake in its Galaxy Newspring joint venture in March.

Staff costs rose 20 per cent to $23.3 million, mainly owing to the TuasOne project, which entered a "manpower-intensive phase of the construction schedule".

Municipal projects continue to be Hyflux's main revenue driver, accounting for about 81 per cent of total turnover.

Singapore accounts for about 58 per cent of total revenue and the Middle East around 31 per cent, said the firm.

Quarterly loss per share was 4.91 cents, compared with a 1.58-cent loss a year earlier, while net asset value was 28.9 cents a share as at June 30, compared with 45.1 cents as at Dec 31 last year.

Hyflux shares closed down half a cent at 49.5 cents.

A version of this article appeared in the print edition of The Straits Times on August 04, 2017, with the headline 'Hyflux Q2 earnings slump on Tuaspring losses'. Print Edition | Subscribe