SINGAPORE (Nov 6): Hai Leck Holdings, the provider of engineering, procurement and construction (EPC) services, announced that 1Q18 earnings dropped 13.4% to $2.22 million from $2.56 million in 1Q17.
The group’s revenue for the first quarter ended September remained at $24.5 million from 1Q17, attributed to oil prices that remained low and impacted the down-stream in the oil and gas industries negatively. In general, oil majors are reducing their expenditure.
Cost of sales decreased 3.9% to $11.4 million compared to $11.9 million last year, mainly due to lower material usage in 1Q18.
Operating expenses – which includes distribution and selling expenses, administrative expenses and other operating expenses, including depreciation, amortisation and exchange differences – increased 8.7% to 10.6 million compared to $9.8 million a year ago.
This was mainly due to allowance for doubtful trade debts of $0.2 million in 1Q18 and timing differences in provision for staff cost.
Distribution and selling expenses increased 77.6% to $453,000 from $255,000 the previous year.
Meanwhile, administrative expenses also increased 6.2% to $8.39 million compared to $7.90 million last year.
Other operating expenses for 1Q18 was up 10% to $1.79 million from $1.63 million in the same period last year.
As at Sept 30, cash and cash equivalents stood at $55.9 million
The outlook of oil and gas industry remains uncertain although the situation appears to have stabilised. However, the group will continue to monitor and manage its costs to be competitive.
Shares in Hai Leck closed at 57 cents on Monday.
