SINGAPORE (Feb 27): Water solutions provider Hyflux has announced a FY17 loss of $116.4 million compared to $3.8 million in earnings posted for FY16, citing continued weak electricity prices across the Singapore power market.
Revenue fell by more than half to $353.6 million in FY17 from the group’s restated revenue of $830.6 million in the previous year due to lower contributions from engineering, procurement and construction (EPC) activities, in line with the respective construction phases of the group’s major projects in Oman and Singapore.
The group’s latest revenue figures excludes the Tuaspring Integrated Water and Power Project, which registered a net loss of $81.9 million over the year with Singapore wholesale electricity prices clearing at levels below fuel costs.
Over the full year, staff costs grew 14% to $94.6 million from $82.7 million previously due to the TuasOne waste-to-energy (WTE) project, which is currently in a manpower-intensive phase of construction.
A 61% higher depreciation, amortisation and impairment expense of $28.9 million was recognised compared to $18 million previously due to an impairment of the carrying cost of an investment in an associate.
Meanwhile, finance costs grew 22% to $58.5 million from $47.8 million in FY16 due to additional drawdown for the group’s project financing following its project milestone achievements.
Hyflux’s total cash balance was $314.2 million and net gearing was at 1.2 times as at end-2017.
In its outlook, the group says it expects to continue recording losses in the financial year ahead unless the Singapore power market shows improvement.
In spite of the near-term challenges, Hyflux says it remains committed to the partial divestment of its Tuaspring Plant at an acceptable price, adding that it is unlikely to complete any divestment deal ahead of the first call date in April 2018 for the redemption of its preference shares.
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As such, the group says it anticipates a deferment of such redemption until its divestment of Tuaspring is concluded, with the coupon yield for the preference shares stepping up to 8% from 6% in the meantime, at an additional $8 million per annum.
Shares in Hyflux closed 1 cent higher at 29 cents on Tuesday.
