SINGAPORE (July 29): USP Group swung to a FY17 net loss of $3.6 million from a profit of $0.4 million a year ago due to higher cost of sales and an increase in general and administrative expenses after its recent acquisitions.
The group also made one-off impairment charges to SG Support Services of $2.8 million due to a dispute between USP Industrial and the major shareholder of SG Support Services.
Revenue for the 12 months ended March rose more than fivefold to $36.7 million from $6.8 million a year ago mainly due to the full-year revenue contribution from the group. But cost of sales widened more than fivefold to $21.1 million from $4.1 million a year ago.
Compared to FY16, revenue generated from the Oil business fell by over half from a year ago due to the decrease trading activities in USP Oil. However, revenue from its Biofuel business recorded an increase of over 50% partly due to its improved work processes allowing increased output from the treatment of oil sludges and partly also due to the recovery of oil prices compared to the previous year.
General and administrative expenses increased by $9.4 million to $15.6 million in FY17 from $6.2 million in FY16 from recently acquired Koon Cheng Development and Supratechnic Group, and an impairment of plant and machinery of $0.7 million.
Net other expenses in FY16 also consisted of a fair value loss of $8.4 million on its quoted securities. In FY17, there was $0.5 million of inventories written off and a revaluation gain of $0.8 million on its quoted securities.
USP is currently in discussions to explore the spin-off listing of Supra on the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong.
Shares in USP Group last traded at 8.1 cents.
