Hyflux Q2 net profit falls 58% to $25.95m

The Tuaspring Desalination Plant located at Tuas. Hyflux has seen substantial completion of its Tuaspring Power Plant and it is expected to be operational early next year.
The Tuaspring Desalination Plant located at Tuas. Hyflux has seen substantial completion of its Tuaspring Power Plant and it is expected to be operational early next year.PHOTO: HYFLUX

Drop attributed to work on Tuaspring power plant and lower divestment gains

Substantial completion of its Tuaspring plant and lower divestment gains hit second quarter earnings at Hyflux, which posted a 58 per cent drop in net profit to $25.95 million.

Revenue jumped 18 per cent to $94.80 million for the quarter.

For the half year, earnings fell 68 per cent to $31.58 million on the back of a 8 per cent slide in revenue to $155.23 million.

The Singapore market made a lower contribution owing to the substantial completion of Tuaspring Power Plant, although revenue contributions from China and the Middle East and North Africa region rose owing to the divestment of five China water assets, and as it started to construct the Qurayyat Independent Water Project (IWP) in Oman.

Overall, there were lower disposal gains in the first half of the year. Disposal gains included a gross $15.8 million gain on one of the group's buildings during the period.

  • AT A GLANCE

  • Revenue: $94.80 million (+18%)

    Net profit: $25.95 million (-58%)

    Interim Dividend: 0.7 cents per share (similar to a year back)

In comparison, other income in the first half of last year had included gains on the sale and leaseback of the Hyflux Innovation Centre building of $83.5 million, and disposals of the group's investments in a joint venture and associate of $54.1 million.

The municipal sector continued to be the main contributor to the group's revenue, accounting for 95 per cent of total revenue in the second quarter, compared with 83 per cent a year back. Revenue from the industrial sector made up 4 per cent of the group's revenue for the quarter, down from 14 per cent in the same quarter last year.

An interim dividend of 0.7 cents per share was declared, unchanged from a year back.

The group's total order book was $2.9 billion - $1.9 billion for operations and maintenance, and $1 billion of engineering, procurement and construction contracts.

Revenue contribution from the Middle East and North Africa should increase as the group works on the Qurayyat IWP in Oman, and a containerised desalination project awarded in June to augment the existing Yanbu Desalination Plant in Saudi Arabia.

"Despite the challenging macro-economist environment and depressed oil prices, Hyflux has continued to expand our footprint in the Middle East and North Africa region," Ms Olivia Lum, Hyflux executive chairman and group chief executive said in a statement.

In Singapore, the Tuaspring Power Plant has been connected to the power grid and testing and commissioning is in progress. It is expected to be operational early next year.

The group's net gearing ratio was 0.65 times at June 30, compared with 0.51 times at Dec 31.

Earnings per share for the quarter was 1.68 cents, down from 6.18 cents a year back. Net asset value per share was 56.4 cents at June 30, down from 56.6 cents at Dec 31.

Hyflux shares closed unchanged at 84 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on August 07, 2015, with the headline 'Hyflux Q2 net profit falls 58% to $25.95m'. Print Edition | Subscribe