SINGAPORE (Feb 15): USP Group, the investment holding company mainly involved in oil blending and property development, saw 3Q17 losses widened to $2.7 million for 3Q17 from $1.4 million a year ago.
During the quarter, the group recognised revenue streams from its newly-acquired subsidiaries of Koon Cheng Development (KCD) and Supratechnic of $0.9 million and $6.9 million respectively, resulting in 3Q17 revenue that more than quadrupled to $8.6 million from $1.6 million in 3Q16.
Comparatively, the group’s oil business contributed about 10% to the total revenue or about $0.7 million for the period.
USP’s revenue growth, however, was more than offset by a spike in operating expenses.
Particularly, selling and distribution expenses increased $0.2 mil, while general and administrative expenses increased by 155.6% to $3.6 mil after including overheads of KCD and Supra.
In a Wednesday filing to the SGX, USP says the Court of Appeal on Monday allowed its appeal against its major shareholder’s winding up action of SG Support Services (SGSS), and is further seeking legal advice to evaluate its options with the intention of seeking recovery for its investment.
The group adds that it “has taken a prudent approach and made a full provision on its remaining investment in SGSS”.
USP in Nov 2016 recognised a $3.6 million impairment of value of investment in SGSS, which its major shareholder is attempting to wind up but is currently being met by resistance from the group.
(See also: Shareholders move to oust USP chairman Li)
Shares of USP closed flat at 12 cents on Monday.
