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ENVIRONMENTAL solutions provider Hyflux has posted a 31 per cent gain in net profit to S$57.47 million for the year ended Dec 31, 2014 - despite a 40 per cent slump in revenue.
Hyflux said that the fall in revenue to S$321.39 million was mainly due to "the timing of project construction activities following the completion of Tuaspring desalination plant, and the slower than anticipated commencement of the Dahej project".
In FY14, Hyflux entered into a sale and leaseback agreement on its building, Hyflux Innovation Centre (HIC), and disposed of its investments in its joint venture, Hyflux Marmon Development, and an associate to Marmon Water (Singapore), recognising gains of S$103.8 million and S$54.1 million respectively.
In the last quarter of FY14, Hyflux also received confirmation on the capital gain treatment from the tax authority relating to the sale and leaseback of HIC building. Accordingly, taxes previously accrued were reversed, adding to the gain on the sale and leaseback of HIC building. These were collectively reported in "other income" of S$170 million and contributed to the increase from S$10.2 million in FY13.
Earnings per share stood at 1.66 Singapore cents while net asset value per share came to 56.6 cents. A final dividend of 1.6 cents has been proposed.
For FY14, the municipal sector continued to be the main revenue driver with an 84 per cent share. The industrial sector accounted for 14 per cent.
As at end-2014, Hyflux's order book stood at S$2.9 billion - S$954 million in engineering, procurement and construction projects and S$2 billion in operations and maintenance contracts. Looking ahead, the group is cautiously optimistic about the rebound in the water industry amid a weaker oil price environment.
Hyflux closed at 89.5 cents on Friday, half a cent down.
The story above is the correct version.
An earlier version of this article incorrectly stated that Hyflux's 'other income' soared solely from a capital gain treatment, however, it omitted the divestment gains. The above article has been amended to reflect the changes.