New Silkroutes expects revenue of at least US$500m for FY2018

SINGAPORE - Mainboard-listed New Silkroutes Group (NSG) is expecting revenue of at least US$500 million in financial year 2018 (FY18) after turnover doubled while loss widened in the first fiscal quarter.

If the forecast is realised, revenue for FY18 would grow by at least 15 per cent over the US$433 million in FY17.

New Silkroutes, a diversified company with businesses in oil and gas trading, healthcare, financials and real estate, said the expected growth will come from increased oil trades and revenue contributed by new acquisitions of healthcare subsidiaries Healthsciences International (HSI), completed in December 2016; and dental companies, completed in June 2017.

But revenue growth has not always translated into profit for Mainboard-listed New Silkroutes.

For the first fiscal quarter, which ended Sept 30, New Silkroutes reported a net loss of US$551,000, a deficit more than three times larger than its year-ago net loss of US$146,000. That came despite revenue doubling to US$149.3 million over the same period.

New Silkroutes attributed the wider loss to lower profit margins at its oil trading arm, International Energy Group, and from costs arising from the consolidatio of the dental clinics and dental supplies companies acquired in June.

The company's US$1.8 million net loss for the year ended June 30, 2017, was its third straight loss-making year. If the stock's market capitalisation falls below S$40 million before the company is able to turn a profit, New Silkroutes could be placed on the Singapore Exchange's Watch List for possible delisting. The stock's market cap was S$60 million as at end-Thursday.