SINGAPORE (Feb 27): Union Gas Holdings reported a profit of $4.2 million for the FY17 ended Dec 2017, down 11.1% from $4.7 million a year ago on higher administrative expenses.
Revenue for the full year grew 9.7% to $39.2 million from $35.7 million a year ago, mainly due to higher revenue from the retail of bottled liquefied petroleum gas (LPG) cylinders to households in Singapore, as well as the sale and distribution of diesel to retail and commercial customers.
Higher contributions from these segments were however offset in part by lower sales of compressed natural gas (CNG) primarily to natural gas vehicles (NGVs) and industrial customers for their commercial use at 50 Old Toh Tuck Road.
In all, gross profit margin grew to 35.3% in FY17 from 32.5% in FY16 on lower purchase cost of bottled LPG cylinders.
The group’s topline growth was however offset by a fourfold increase in administrative expenses to $3.4 million compared to just $0.8 million in FY16, mainly due to higher employee compensation arising from the transfer of employees, including executive director and CEO Alexis Teo, as well as listing expenses of $1.2 million.
A first and final dividend of 1 cent has been declared for the period under review.
Noting that its outlook for the next 12 months remains challenging due to the industry’s highly-competitive nature and price fluctuations, Union Gas says it expects revenue from its CNG business to decrease in line with the declining number of NGVs in Singapore.
The group says it is currently exploring opportunities to expand its business through acquisitions believed to complement its current and future businesses – including its recently-issued letter of intent to Union Energy Corporation (UEC) to exercise a call option to acquire certain parts of UEC’s commercial segment relating to the retail sale of LPG to hawker centres.
Shares in Union Gas closed 1 cent lower at 26 cents on Tuesday.
