SINGAPORE - Investment holding firm Annica Holdings has refuted an assertion by the Singapore Exchange (SGX) that its narrower 2017 loss was largely due to the sale of lossmaking operations, saying that the improvement was instead driven by reduced losses from continuing operations.

Annica was responding to the market regulator's queries on its independent auditor's report and 2017 annual report, in which SGX sought clarification on the company's view that an "improvement in general operating environment" provided a basis for expecting the company to remain a going concern. In its query, SGX asserted that the improvement in 2017 results "was largely due to the disposal of the discontinued operations that were loss-making", according to Annica.

"The improvement in FY2017 refers not only to the reduction in total comprehensive loss for the FY2017 against FY2016, but the fact that the group has also managed to reduce its losses from continuing operations, net of tax to S$1.3 million from losses of S$4.1 million previously," Annica said, adding that "the board is of the opinion that improvement in the FY2017 results were not largely due to the disposal of discontinued operations which were loss making - the improvement was largely attributable to the improvement in the group's results from its continuing operations".

For fiscal 2017, the firm - which focuses on power generation solutions and engineering services - clocked revenue of S$15.38 million, down from S$19.39 million in 2016. In the same period, its net losses narrowed to S$1.41 million from S$7.94 million the previous year, with loss per share similarly narrowing to 0.01 Singapore cent from 0.11 Singapore cent the year ago.

Shedding light on its restructuring efforts, the company said it would streamline existing businesses by improving margins and reducing operating costs, and diversifying the company's revenue streams. It has identified the renewable sector as a future key growth driver.

"However, the board would only expect meaningful contribution from this business segment from FY2019 onwards, as the projects are only expected to come on-stream after second half of 2018," Annica's board added.