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Addvalue Tech posts US$11.1m full-year loss on lower revenue, higher expenses

ADDVALUE Technologies has posted a full-year net loss of US$11.11 million from a loss of US$3.47 million last year, on the back of lower sales and higher expenses. 

This represents the fourth consecutive year the satellite communications company has been in the red; the group was last profitable in FY14. 

Loss per share came in at 0.64 US cent for fiscal year 2018, from a loss per share of 0.23 US cent last year. 

For the full year ended March 31, 2018, revenue also fell 62.3 per cent to US$4.09 million.

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This was mainly attributed to the "continued depressed economic conditions in the merchant shipping and energy sectors" which the group's products primarily target; the phasing out of certain products which are reaching the end of their product life cycle, as well as the "gradual shifting in market demand for narrowband satellite communications (satcom) products to broadband satcom products with more data centric features", Addvalue said. 

In addition, other operating expenses rose by US$5.5 million to US$8.4 million in FY18, mainly due to impairments made during the year. 

No dividend has been declared for the current financial period, unchanged from the previous year. 

Nonetheless, the group is in discussions with various customers on several projects amounting to US$10 million for delivery by March 31, 2019, Addvalue said in a press statement on Wednesday. 

It added that barring any unforeseen circumstance, the group expects to "significantly outperform" next year, in part due to the "transformation programme" the group has embarked on over the part two years, based on its strategies of "commercial refocusing" and an "emerging markets focus". 

Said chairman and CEO of Addvalue, Colin Chan: "Subject to the necessary approvals as well as conducive capital market conditions, Addvalue also aims to reward its shareholders through a possible distribution-in-specie exercise to be carried out as part of the spin-off of one of its subsidiaries for a listing on the Catalist Board of the Singapore Exchange Securities Trading Limited (SGX-ST)."

The wholly owned subsidiary is Addvalue Solutions (AVS).

Shares in Addvalue Technologies last traded at US$0.03 apiece on May 24, following the request for a trading halt in anticipation of the completion of a Inter-Satellite Data Relay System (IDRS) terminal supply contract with a global satellite service company (airtime agreement). 

However, there was a delay in the signing of the agreement as the customer requested additional amendments to certain deal terms and the parties were in negotiations, Addvalue said. 

The group has since agreed to include the proposed amendments, and is "cautiously optimistic" that the airtime agreement will be signed within the next few days. 

Trading of the counter resumes at 9am on Thursday. 

Under the SGX listing rules, a company may be placed on the watch list after three straight years of losses and having a market cap below S$40 million. 

Addvalue currently has a market cap of about S$70.82 million.