SINGAPORE (Nov 8): CSE Global saw 3Q17 earnings drop 25% to $3 million compared to $4 million in 3Q16.
Revenue for the third quarter ended September increased by 5.7% to $85.6 million compared to $81.0 million in 3Q16, mainly attributed to 38.6% growth in revenues achieved for the Americas region, particularly in the oil and gas sector.
Gross profit, however, were 8.8% lower at $21.5 million from $23.6 million last year, mainly due to lower gross margins achieved from the oil and gas sector, resulting in group gross margins decreasing from 29.1% in 3Q16 to 25.1% in 3Q17.
Operating expenses were 13.4% higher at $20.2 million in 3Q17 as compared to $17.8 million the previous year, mainly due to higher doubtful debts provision of $2.0 million in 3Q17.
During the quarter, the group continues to secure new orders from greenfield (new installations) projects and brownfield (maintenance, upgrade and enhancement of existing installations) projects totalling $86.4 million, an increase of 22.1% y-o-y, mainly due to higher flow orders.
As at Sept 30, outstanding orders stood at $207.6 million.
Lim Boon Kheng, group managing director of CSE says, “Given the current economic and the oil and gas industry conditions, CSE expects to report weaker operating performance for the next quarter. We are reviewing the collectability of our accounts receivables as well as undertaking a financial review of our business units for the purpose of assessing the fair values of our investments. Consequently, we expect to report a loss for FY17 but will remain in a net cash position at the end of the year.”
In addition, CSE will focus on integrating and consolidating the new acquisitions and continue to explore acquisition opportunities to support its long term sustainable growth objectives.
Shares in CSE closed 1 cent lower at 38 cents on Wednesday.
