HIGHER cost of sales and a host of impairment charges has pushed Australian oil and gas engineering services provider AusGroup into the red for the fourth quarter.
Results for Q4 were also significantly impacted by the continued delay in the commercialisation of its port and marine business.
The Singapore-listed firm chalked up a net loss of A$99.5 million (S$102.3 million) for the fourth quarter ended June 30, compared to a net profit of A$266,000 in the same period a year ago, it said in a Singapore Exchange (SGX) filing on Monday evening.
This translates to a loss per share of 13.5 Australian cents. No dividend has been declared.
The plunge in earnings is despite a 14.1 per cent rise in revenue to A$103.4 million, which was on the back of higher access and project services provided, relative to the comparative period a year ago, AusGroup said.
Its cost of sales for the fourth quarter registered a 42.3 per cent spike to A$99.3 million, which was due mainly to excess costs incurred (with no corresponding revenue) from its fabrication business in Singapore to close out contracts, due to the pending closure of the business.
A week ago, the firm had disclosed in a separate SGX filing that it had decided to cease its Singapore fabrication and manufacturing businesses, as reductions in capital expenditure in the upstream oil and gas industry exerted pressure on those businesses.
The group's operations in Singapore span over 30,000 square metres, comprising a large enclosed fabrication facility, machine shop and staging and storage areas with water access, according to its official website.
This resulted in an impairment of A$1.5 million being booked in the quarter, AusGroup said.
In addition, an impairment charge of A$72.3 million for its port and marine business was also logged in the quarter, AusGroup added, following an impairment assessment.
As at June 30, the firm's current liabilities exceed its current assets by A$95.2 million. As a result, the firm is in breach of a financial covenant under a trust deed for S$110 million in notes issued under a multi-currency debt issuance programme.
"The group has actively engaged with noteholders and DBS (the trustee) since the … breach in efforts to restructure the debt; negotiations remain ongoing at the time of this report," AusGroup said in a statement.
The counter last traded at 4.3 Singapore cents.