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Loyz swings into the red on impairment losses
Impairment losses caused Loyz Energy to ink a net loss of US$63.92 million for the fourth quarter ended June 30, after posting a net profit of S$604,000 in the year-ago period.
These one-off non-cash impairment charges also pushed the group deeper into the red for the full year, with a net loss of US$63.1 million in fiscal 2015 ended June 30 from US$2.92 million in fiscal 2014.
The group explained that the impairment loss was recognised on its non-core assets in India, Australia and the United States, resulting in a surge under "other charges" by US$71.8 million during the year.
"We believe that the non-core assets in USA, Australia and India may yield value and can be monetised when market conditions are better, but the group decided to hold a conservative position by taking a one-time charge on them as a way to adjust to the weak market outlook." said group managing director Adrian Lee.
Revenue for the full year jumped 40.6 per cent to a record US$23.1 million as the group enjoyed an increase in production volume from its Thailand oil concession, which rose from 75,281 barrels in fiscal 2014 to 374,765 barrels in fiscal 2015, partially offset by a much lower average oil price in fiscal 2015.
Loyz Energy said the wells remain profitable despite a low oil price due to low cost of extraction and efficient oil well resource management. The Thailand concessions have only been partially developed and a large area remains for further exploration and addition to reserves.