CosmoSteel profitable in Q3, but flags continued revenue impairment

PIPING systems provider CosmoSteel Holdings said it has maintained profitability in the third quarter of its financial year ending Sept 30, but guided for further revenue impairment amid the Covid-19 outbreak.

In view of the continued impact of the pandemic, the company has continued its cost-cutting measures and managed to reduce its finance costs, marketing and distribution costs and administrative expenses, it said in regulatory filing on Wednesday. It is also focusing on selling second-hand inventory at a profit, and on the reversal of whatever previous provisions made for such inventory.

Still, the mainboard-listed company remains on the Singapore Exchange's watch-list as it failed to meet the exit criteria as at June 30.

CosmoSteel said the pandemic and its "knock-on" economic impact is expected to continue to "impair and adversely affect" its ability to secure new projects and generate revenue for the rest of the financial year.

It continues to explore projects to increase revenue and expand or diversify its existing products or services and/or markets, and to meet the market cap requirement of S$40 million under the watch-list's exit criteria.

In May, the company obtained an extension till June 5, 2022, to meet the exit criteria. If it is able to maintain its profitability in FY2021, it will be able to satisfy one of the conditions, the other being the requisite market cap.

CosmoSteel shares closed up 0.3 Singapore cent or 3.2 per cent to 9.8 cents on Wednesday.