SINGAPORE (June 22): Singapore Kitchen Equipment (SKE) reported losses doubled to $0.9 million for 1Q18 from $0.45 million a year ago on higher costs and expenses.
Revenue for the quarter grew 43.6% to $6.9 million from $4.8 million in 1Q17 mainly due to higher sales generated from fabrication and distribution for tenders, and higher maintenance and service income.
Cost of sales rose 50.7% to $4.9 million from $3.3 million in the previous year, caused by higher cost of equipment and staff-related costs which the group attributes to expansion of sales and production teams as well as the changes in product mix, leading to increased sales of equipment of lower margin.
Distribution costs in 1Q18 grew to $0.8 million from $0.7 million from higher staff costs due to additional sales personnel, increased sales commissions, and the depreciation of new motor vehicles.
Administrative expenses grew 38.5% to $1.5 million from $1.1 million due to higher staff and related costs, partially offset by lower donation expenses.
Going forward, the group expects to continue facing challenges due to its dependency on F&B and hospitality services industries, ability to secure new projects with the non-cancellation of secured projects, as well as key personnel for its continued growth.
SKE says it intends to manage increasing competition and these business challenges by increasing its sales efforts into new areas and projects, while monitoring and managing its overall costs and expenses.
The group is currently seeking a dual primary listing on the Hong Kong Stock Exchange, and cautions of listing expenses which may negatively impact the company’s bottomline growth over the next 12 months.
Shares in SKE closed flat at 14 cents on Thursday.
