SINGAPORE (Mar 4): Hyflux took an impairment hit of $916 million for the nine months ended Sept 30, to account for a fall in carrying value of the Tuaspring water and power plant and impairment of receivables for previously completed projects.
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The Tuaspring plant is part of the Tuaspring disposal group which is classified under "held for sale" assets. At the end of March 2018, these assets were valued at $1.47 billion. At the end of September 2018, the assets were valued $824 million lower at $651 million.
The losses were revealed after Hyflux submitted its latest statement of financial position to the High Court over the weekend.
Hyflux had asked valuer K4K Training & Advisory SL, the same consultant who did a similar market study in 2016, to conduct this the up-to-date valuation of the Tuaspring plant.
As the valuation in the most recent market study is significantly different from that in 2016 due to losses in the electricity market in recent years and the projected lower spark spreads for the remaining concession period, Hyflux said it intends to commission a further valuation by a different valuer for the purposes of finalising the 2018 full-year financial results.
"As the carrying value is a reflection of the current depressed market, in the event that the Singapore power market recovers to provide generation companies with sufficient spark spread margins, the valuation might then be revised," Hyflux said.
