Falling sales, higher financing cost push Halcyon into the red in Q1
RUBBER supplier Halcyon Agri Corp swung to the red for the first quarter with a loss of US$5.7 million versus a restated profit of US$1.3 million a year ago as sales volume dropped due to a switch in strategy while financing costs rose.
Revenue slid 16 per cent to US$399.7 million from US$475.7 million a year ago due to a decline in revenue per metric tonne owing to rubber prices over the period and falling sales volumes led by the group migrating its sales strategy away from long-term contract (LTC) sales towards spot sale.
This move is in line with Halcyon's stated commitment to shift the majority of its tyre-focused sales volumes to the new digital platform, HeveaConnect, in late-Q2 2019, said the company in its results announcement on Wednesday.
The transition to spot sales has been positive, with the group posting an 11.3 per cent improvement in gross profit to US$32 million for the three months to March. Quarter-on-quarter, gross profit was up 67 per cent.
"In addition to the benefits of reducing the proportion of LTC sales, our operations in Ivory Coast saw further improvement and returned to profitability in Q1 2019," said the company.
Halcyon posted a loss per share of 0.36 US cent for the first quarter compared with an earnings per share of 0.08 US cent in the previous year's corresponding period.
The counter closed unchanged at 50.5 Singapore cents on Wednesday.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Meituan to debut in Riyadh as expansion beyond China quickens
Mapletree Industrial Trust to distribute S$13 million of divestment gains over next 4 quarters
K-pop agency Hybe’s internal strife wipes out 1.2 trillion won
Beijing city to subsidise domestic AI chips, targets self-reliance by 2027
Hong Kong bourse regains favour on hopes of a market revival
Chinese sellers go to TikTok school to reach buyers abroad