Engineering trio report full-year losses

Singapore

THREE engineering-related listed companies have reported full-year net losses, in financial statements released on Thursday night.

Catalist-listed crane provider Hiap Tong Corp clocked a net loss of S$8.12 million for the year to March 31, a reversal from the previous year's net profit of S$2.25 million.

The plunge into the red came on hefty impairment losses for property, plant and equipment and right-of-use assets, as the leasing business which provides lifting and haulage services faced a weak operating environment.

That was even though revenue grew by 8.4 per cent to S$58.8 million. Growth in port services offset a decrease in income from leasing.

Another Catalist-listed company, environmental solutions provider, TriTech Group, narrowed net losses to S$11.2 million in the year to March 31, from a net loss of S$27.4 million a year ago.

Its bottom line was cushioned by divestment gains from the sale of subsidiaries, despite a 62.1 per cent fall in turnover to S$10.6 million.

The group pointed to "the significant reduction in the contract sum" for certain engineering projects as the culprit for the fall in revenue.

As for mainboard-listed Tee International, whose independent external auditor issued a disclaimer of opinion for FY2019, its net loss deepened to S$58.6 million for the year to May 31. This is compared to a net loss of S$18.2 million in the year before.

Even though revenue from continuing operations rose by 32.3 per cent to S$329.9 million, the bottom line was hit by a higher cost of sales, including Covid-19-related expenses and narrower margins, as well as insolvent customers and other woes at a Malaysian subsidiary.

The group also faced higher finance costs from penalty interest on the early redemption of three-year notes due Dec 19, 2020, as well as losses from discontinued operations.

No dividend was recommended by all three companies, which raised concerns about the impact of the Covid-19 on engineering and construction.

Hiap Tong said the leasing business is expected to be "significantly affected" in Singapore and Malaysia, while its port services arm has been deemed an essential service in Singapore and should yield positive contributions to the group.

Despite the hit to infrastructure construction, TriTech said it is marketing its in-house technologies, and can access financing options in China.

Meanwhile, Tee International expects to gradually resume construction work in the fourth quarter, with an outstanding engineering order book of S$272.3 million as at May 31.

"Efforts to dispose of the group's remaining infrastructure assets are continuing," the company said.

No dividend was recommended by all three companies, which raised concerns about the impact of the Covid-19 on engineering and construction.