Hiap Seng Engineering widens Q3 loss to S$5.43 million

MAINBOARD-LISTED Hiap Seng Engineering, which is going through restructuring, widened its third-quarter losses as turnover took a tumble from lower recognition of revenue, according to unaudited results released on Friday.

Net loss was S$5.43 million for the three months to Dec 31, 2019, worsening from S$834,000 in the year before, while revenue dropped by 31.7 per cent year on year, to S$31.8 million.

Laying out its working capital position as at Dec 31, 2019, the board noted that its S$74.3 million in current liabilities included S$27.7 million in bank borrowings, as well as contract liabilities of S$14.2 million that have been invoiced to customers but are not yet recognised as revenue.

The loss per share stood at 1.8 Singapore cents, worse than the 0.3 Singapore cent previously, while net asset value was a negative three Singapore cents a share, compared with positive 2.4 Singapore cents as at March 31, 2019.

For the nine months, the net loss widened to S$16 million, from S$24.5 million before, even as revenue inched higher by 2.2 per cent, to S$111.3 million.

The board stressed that Hiap Seng has an unrealised surplus of some S$65 million from the revaluation of its properties, as well as an outstanding order book of S$74 million.

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Still, it was unable to conclude whether the group can operate as a going concern, despite the appointment of a financial consultant and the possibility of selling some properties in Thailand and Singapore to settle its liabilities.

Hiap Seng "has lost some new projects due to the fierce competition and its current financial position", even as the outlook for the oil and gas industry's process sector improves, it added, citing the level of competition and a challenging operating environment.

No dividend was recommended for the period, with the board saying that the company wants to "reserve adequate resources" for ongoing projects.

Trading in Hiap Seng shares has been suspended since November 2019.