SINGAPORE (July 28): Integrated warehousing and logistics solutions provider GKE Corporation sank into a loss of $2.3 million for the full year ended May, compared to earnings of $5.7 million a year ago.
This was mainly due to the absence of the one-off gains from disposals a year ago. GKE in FY16 gained $1.2 million from the disposals of Everflourish and Maoming, and $13.7 million from the disposal of the warehouse cum office property at 30 Pioneer Road.
The losses comes despite a 52.2% growth in full-year revenue for FY17 to a record of $56.1 million, from $36.9 million a year ago.
The higher revenue was mainly driven by contributions from 70%-owned chemical warehouse operator, Marquis Services; wholly-owned ready-mix concrete manufacturing plant, Wuzhou Xing Jian Readymix, which commenced commercial production in June 2016; and newly-acquired port operations and maritime logistics service provider, TNS Ocean Lines.
In a filing to SGX on Friday, GKE says the revenue was undermined by pricing pressure and intense competition in the warehousing & logistics industry amid subdued economic growth and rising cost of operations.
Cash and cash equivalents stood at $10.6 million as at May 31, 2017.
GKE did not propose any dividend for FY17. It had declared a final dividend of 0.6 cent per share a year ago.
Looking ahead, GKE says it remains cautious as the economic recovery in the region is likely to be subdued with challenging business environment.
“Our reinvestment of resources unlocked from our assets last year has given the group the opportunity to embark on new phases of growth. Despite the pressure and challenges of the business environment, we are committed to strive to strengthen our earnings base,” says GKE’s CEO and executive director, Neo Cheow Hui.
“The group strives to overcome the adversities and continues to drive synergies among its subsidiaries within the warehousing & logistics division,” Neo adds.
Share of GKE closed half a cent lower at 15.3 cents on Friday.
