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Albedo narrows Q4 loss, sees healthcare revenue contribution from H2
CATALIST-LISTED Albedo has narrowed its net loss for the fourth quarter ended Dec 31, 2015, to S$610,000, compared to a net loss of S$8.6 million a year ago.
Q4 revenue fell 42 per cent to S$859,000 from S$1.5 million a year ago. The steel trader, which diversified into medical aesthetics in November 2015, saw about S$253,000 in revenue from the new business in Q4.
Full-year net loss was S$1.9 million, compared to S$13.1 million in 2014. Revenue for the year tumbled 44 per cent to S$5.6 million.
Albedo said the weaker revenue was due to a further weakening of market demand and increasing import competition from rival steel-producing countries with huge surplus productions.
Other operating expenses fell from S$12.3 million in 2014 to about S$0.1 million in FY2015 mainly due to non-recurring losses arising from the disposal of Thai Tech Steel (2003) Co in 2014. The disposal resulted in a loss of S$8 million in 2014 being an amount due to the group, but the group was doubtful of recovering.
In 2014, Albedo had also recorded S$4.4 million non-cash accounting loss arising from the termination agreement with Infinite Rewards Inc in relation to the proposed reverse takeover involving Reflection Oasis Inc.
Its cash and cash equivalents stood at S$2 million by end-2015, down from S$7.8 million at end-2014.
Looking forward, Albedo expects its steel division to be affected by slower demand due to weaker economic conditions and keener rivalry.
It said the group is "actively in search of new businesses" and has diversified into the medical aesthetics business and the medical and healthcare sector.
Albedo said in addition to the kidney hospital in Qingdao, China, it also plans to operate a new medical aesthetic clinic in the Chinese city. Its local partner has received in-principle approval for the operation of the new medical aesthetic clinic.
Under its a master marketing agreement with Wealth Union, it intends to market aesthetics medical services in China. Wealth Union operates and franchises a network of 286 slimming salons, 21 fitness centres and three gymnasiums mostly under the W.U.Superfitness and Rejoy brands. The brands are franchised to more than 350 entrepreneurs across various parts of China.
"As all these diversifications into the medical and healthcare businesses are in their early stages, we only expect revenue contributions in the second half of 2016," Albedo said.