Shanghai Turbo narrows full-year loss to $2.8m

SINGAPORE - Shanghai Turbo Enterprises narrowed its full-year 2018 net loss to 14 million yuan (S$2.8 million) from a restated year-ago loss of 158.1 million yuan as it managed to collect doubtful trade receivables.

Loss per share for the 12 months ended Dec 31, 2018 was 0.51 yuan, a smaller deficit than the loss per share of 5.75 yuan the year before. Shares of Shanghai Turbo, a China-based precision manufacturer, last traded at $0.99 on Feb 27.

Revenue shrank 23 per cent to 30.3 million yuan as the group's on-going legal suits and quality control issues led a customer to disqualify the group as a vendor and forced the company to reduce prices. Cost of sales increased 25 per cent to 47.9 million yuan, leading to a gross loss of 17.6 million yuan compared with a gross profit of 1.1 million yuan in 2017.

But other operating income swelled to 60.6 million yuan from a year-ago 1 million yuan as the company reversed 54.1 million yuan of provisions made in 2017 for trade receivables. Shanghai Turbo said it managed to collect that debt in 2018. 

Other operating expenses also fell to 5.4 million yuan from 114 million yuan as the company reversed allowances for doubtful debt and impairment losses of inventory previously made in 2017. The 2017 impairments and write-offs comprised 69.6 million yuan made to trade receivables, 28.8 million yuan to inventories, and 4.8 million yuan to fixed assets.

Looking ahead, the company expects a "challenging and highly competitive" business landscape compounded by uncertainties surrounding the US-China trade war. The company has however managed to get reinstated as an approved vendor by the customer that had disqualified Shanghai Turbo in 2018. Shanghai Turbo's legal dispute with former executive director Liu Ming is on-going.