Water and energy firm Hyflux reported a major dip in first-quarter earnings as its up-for-sale Tuaspring plant continued to drag on performance.
Net profit for the three months to March 31 dropped 89 per cent year on year to $822,000.
"The Tuaspring plant, which has been classified as held for sale, contributed losses of $27 million for the first quarter due to the weak Singapore power market," Hyflux said yesterday.
Tuaspring has been an impediment to earnings since it started its power plant operations in March last year. In February, the firm announced it was exploring a partial divestment of the asset. If the impact of Tuaspring is excluded, Hyflux would have recorded an 8 per cent increase in earnings to $27.81 million.
Total revenue dropped 59 per cent to $91.53 million, due mainly to lower engineering, procurement and construction activities in the TuasOne Waste-to-Energy project in Singapore and the Qurayyat Independent Water project in Oman.
AT A GLANCE
$91.53 million (-59%)
PROFIT EXCLUDING TUASPRING:
$27.81 million (+8%)
A 29 per cent jump in staff costs to $24.1 million also hit earnings. Hyflux will continue to count on the TuasOne project here and projects in Saudi Arabia as revenue drivers for the rest of this year.As well as the planned partial Tuaspring divestment, Hyflux is selling all its interest in the Tianjin Dagang desalination plant in China. Both deals are expected to be completed by the end of this year. Monetisation of these assets will free up capital for new projects, as well as reduce the group's leverage, Hyflux said.
Total loss per share was 1.71 cents for the quarter, up on the 0.64 cent loss a year earlier, while net asset value was 38 cents a share, down from 45.1 cents at Dec 31 last year. Hyflux shares closed down 1.69 per cent, or one cent, at 58 cents ahead of the results announcement.