SINGAPORE (Feb 26): AEI Corporation announced that its losses for FY17 have widened by 125.1% to $9.54 million compared to $4.24 million in FY16.
Revenue was 32.8% lower at $8.19 million from $12.2 million a year ago, mainly due to continued challenging and lackluster worldwide demand from the HDD markets, exacerbated by downward pricing competition from overseas suppliers.
With cost of sales dropping 23.4% y-o-y to $9.18 million, the group’s gross loss for FY17 came in at $0.99 million, compared to gross profit of $0.21 million last year, attributed to low sales and fixed overheads which included additional depreciation of the newly completed Tuas South factory.
Other operating income was 60.0% lower at $1.38 million from $3.46 million last year, due to lower scrap sales as a result of lower production volume, as well as the absence of gain on sale of old extrusion machines as well as foreign exchange gain which was included in FY16.
Administrative expenses increased by 47.7% to $5.76 million from $3.90 million a year ago, mainly due to an exchange loss of $1.6 million arising partly from products and purchases transacted in USD and partly from translation of USD balances to SGD for financial reporting purposes.
Other operating expenses were 170.6% higher at $4.36 million compared to $1.61 million in the previous year, related to group restructuring expenses as well as fair value assessment loss of $5.6 million in relation to its buildings at Penjuru and Tuas South.
During FY17, the group recorded $0.12 million of finance costs, which was absent in FY16, related to construction loan taken to finance the construction of Tuas South factory.
Looking forward, the group will continue its efforts in improving operating efficiencies and streamlining operating costs, while monitoring closely on potential volatility in raw material costs, energy prices and currency fluctuations.
In addition, the group will look out for opportunities to enhance productivity, product quality and improve its competitiveness in the market place.
Shares in AEI Corp closed flat at 80 cents on Monday.
