SINGAPORE (Apr 12): GKE Corp, the integrated warehousing and logistics solutions provider, saw its 3Q18 losses narrow 18.5% on-year to $0.8 million from $0.9 million on higher revenue.
Revenue for the quarter grew 8.3% to $17.3 million from $16 million a year ago due to higher contributions from Wuzhou Xing Jian and GKE Express Logistics.
This was however offset in part by lower revenue contributions from the group’s wholly-owned port operations service provider, TNS Ocean Lines, and the warehousing & logistics segment.
Due to the lower revenue contribution from TNS, composite gross margin fell to 18.6% over the quarter from 20.4% in 3Q17.
Cost of sales grew 10.7% to $14.1 million from $12.7 million a year ago on higher operational expenses, in line with the overall growth in revenue.
Administrative expenses fell 17.2% to $2.7 million from $3.2 million previously on the reversal of provision for impairment loss on investment in joint venture.
With additional costs incurred for a loan taken for the construction for 39 Benoi Road, finance costs grew to $0.5 million from $0.4 million a year ago.
Share of results of associates – namely GKE Metal Logistics – sank into the red with a loss of $109,000 in 3Q18, compared to a profit of $103,000 in 3Q17, mainly due to the decrease in gross margins from storage and shipment of metals.
The share of results of GKE’s 50-50 joint venture, Ocean Latitude, was a loss of $0.5 million in 3Q18 as the chartering rate for the liquefied gas carrier vessel was renewed at a slightly higher chartering rate compared to 3Q17.
GKE recorded a loss of $9.8 billion for the 9M18 period, down from its net loss of $1.4 million a year ago.
This was mainly attributed to a $5.6 million provision for impairment loss; share of loss of joint venture amounting to $1.7 million; amortisation of customer relationships of $1 million, as well as losses from the warehousing & logistics segment.
“The group continues to generate a positive cash flow from our operating activities despite the weaker than expected performance for the quarter. The group will continue to rationalise our business operations to focus on driving growth from our core warehousing and logistics business amidst the challenging market dynamics in the warehousing and logistics industry,” says Neo Cheow Hui, CEO of GKE.
Shares in GKE closed 3.6% higher at 8.6 cents on Thursday.
