GKE Corp sinks deeper into net losses in 3Q

This was mainly due to higher revenue contributions from GKE subsidiaries including chemical warehouse operator Marquis Services, ready-mix concrete manufacturing plant Wuzhou Xing Jian Readymix Co., and maiden contribution from port operations service provider TNS Ocean Lines.

However, cost of sales increased 91% to $12.7 million, from $6.7 million a year ago.

This was due to additional operational expenses from Marquis, Wuzhou Xing Jian and TNS, as well as higher warehouse rental expenses.

Marketing and distribution costs surged 241% to $0.13 million, from $39,000 in the corresponding quarter last year, as a result of increased marketing expenses to drive sales.

Administrative expenses increased 45.3% to $3.2 million, from $2.2 million a year ago.

This was mainly attributable to higher staff costs as a result of the acquisition of TNS during the quarter, ramped up of production in Wuzhou Xing Jian, and amortisation of intangible assets.

GKE also saw a loss of $0.5 million from its share of results of joint venture in 3Q as the chartering contract for the liquefied gas carrier vessel was renewed at a significantly lower charter rate from October 2016.

Cash and cash equivalents stood at $13.2 million as at Feb 28, 2017.

Looking ahead, the group says it expects the macro business environment to remain challenging.

“The Group is still in the midst of fine tuning the integration and operations, particularly for Marquis, TNS and Wuzhou Xing Jian, to further enhance operational efficiencies,” says Neo Cheow Hui, GKE’s CEO and executive director.

“We will continue to strive to overcome adversities in the current operating environment to strengthen our earnings base, especially in our core warehousing & logistics division,” Neo adds.

Shares of GKE Corporation closed flat at 17.9 cents on Wednesday.