Sino Construction drops contracts worth S$122.5m in revamp (source amendment)

SINO Construction said on Thursday that it will not be pursuing three contracts worth S$122.5 million in total in a corporate revamp, which it hopes will allow the group to pay a consistent dividend over time.

The three projects it withdrew from were Guildford Coal Limited (S$70.9 million), JEMS Exploration Pty Ltd (S$25.2 million) and Signet Coking Coal International Ltd (S$26.4 million).

The group - listed on the Singapore Exchange mainboard since June 12, 2008 - is restructuring its business by selling non-performing assets or assets that require large capital expenditure to pursue construction opportunities in the energy sector.

"The primary objective will be to invest in low risk, low to medium capital-intensive projects, while maintaining a strong balance sheet. This is to enable the group to pay a consistent dividend over time,'' Sino Construction said.

It plans to explore opportunities in the renewable energy sector to "provide a sustainable model for consistent returns for the group".

Drew Ethan Madacsi, the interim executive director of the company, said the aim is to develop regional energy networks that are able to work independently of national electricity utilities in locations such as mines and remote townships.

The company - which saw the resignation of the previous executive director and non-executive chairman - recorded a S$7 million net loss for its latest quarter ended Dec 31, 2014, versus a S$2.18 million net gain in the year ago period. Revenue for the quarter was S$1.12 million versus nil in the restated period last year.

In March this year, it raised S$6.5 million through the placement of 262 million new shares to four investors at 2.48 Singapore cents a share - a discount of 9.8 per cent to the weighted average price of 2.75 cents for trades done on March 26, 2015.

At 9.48am, Sino Construction was trading around 4.1 cents a share, up 0.1 cent, or 2.5 per cent. More than 7.7 million shares changed hands.

The company is looking to appoint "high calibre personnel" to execute its vision.

Clarification: In an earlier press release, Sino Construction said as part of its restructuring, it was disposing non-performing assets and has been aggressively reducing its asset liability amounting to S$122.5 million. The company wishes to clarify that no sales were made, but rather it has withdrawn from projects worth S$122.5 million.