Unionmet (Singapore) reports widening losses, seeks to diversify business

METALS trader Unionmet (Singapore) has proposed to diversify its business to property development, and blending and distributing diesel and engine oil.

Its property venture will include property holding, development, management and other related property activities with a focus on the residential and commercial sectors in Singapore and China.

It also plans to acquire and build production and storage facilities in Singapore and China in the oil blending business.

Outlining its rationale, Unionmet said in a statement on Jan 12 that its existing business remains challenging and has not been able to provide adequate returns for the group over the last few years.

Currently, its existing core business is based in China.

In recent times, the Chinese government has moved towards consolidating the smelting industry and reducing the number of smelters with annual production capacity below certain thresholds.

As a result, the business and operations of the Group may be affected by these changes as well as any future legislative or regulatory changes.

Under the circumstances, the board felt that the proposed diversification is in the best interests of the group to broaden its sources of revenue and to increase its competitiveness.

In Singapore, although there may be some uncertainty over the direction of the property market in the short term, growth and continued prospects of the residential property market should remain upbeat over the mid to long term, the board noted.

"This is due to the continued demand for housing from residents as well as Singapore's position as an attractive real estate market for investment in Asia for both for local and international investors," Unionmet said in its statement.

In a separate statement on Jan 12, the company reported a widening of its net loss to US$3.2 million (S$4.1 million) from US$178,000 for the year ended Nov 30, 2013.

This was despite revenue rising by 29.3 per cent to US$38.2 million.

Loss per share widened to 0.51 US cent from 0.03 cent previously while net asset value per share fell to 5.66 US cents from 6.12 US cents.