Hyflux reported a 89 per cent dip in its first quarter net profit to $822,000 compared to a year ago, due to losses incurred by the Tuaspring plant that it has put up for divestment.
"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," the water and energy firm said on Thursday (May 4).
Hyflux announced in February that it's exploring a partial divestment of Tuaspring, a loss-making unit that has been a drag on the group's earnings.
Excluding the impact of Tuaspring, Hyflux saw a 8 per cent year-on-year growth in the first quarter net profit to $27.81 million.
Total revenue dropped 59 per cent to $91.53 million due mainly to lower engineering, procurement and construction (EPC) activities in the TuasOne waste-to-energy project in Singapore and the Qurayyat Indendepent Water project in the Sultanate of Oman, Hyflux said.
A 29 per cent jump in staff costs to $24.10 million also affected the first quarter earnings.
Hyflux will continue to count on the TuasOne project here and projects in the Kingdom of Saudi Arabai as revenue drivers for the rest of 2017.
Meanwhile, the full divestment of the Tianjin Dagang desalination plant - along with the Tuaspring divestment - will be completed by the end of this year.
"Monetisation of these assets will free up capital for deployment to new projects as well as to reduce the group's leverage," Hyflux said.
Hyflux shares dropped 1.69 per cent to 58 cents ahead of the results announcement.