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Rex International posts Q4 net loss, but swings back to black for FY2019

REX International on Friday posted a net loss of US$3.8 million for the fourth quarter of 2019, compared to a net profit of US$7.6 million a year ago.

However, its full-year net profit soared to US$19.4 million from US$1.1 million in the previous financial year.

A large contributing factor in its FY2019 performance was the absence of a tax expense of US$11.01 million that the group recorded in FY2018, related to exploration costs incurred in Norway.

Other income also rose 27 per cent to US$36.6 million on a sale of interests in licences to a third party, reversal of provisions and fair-value gains of quoted investments resulting from better performance in the bond market.

These were partially offset by higher foreign exchange losses of US$1.10 million compared to losses of US$0.35 million in the previous year, as the Norwegian kroner weakened against the US dollar in 2019.

Q4 revenue was nil, while revenue in the year-ago period was about US$91,000. Loss per share was 0.29 US cent versus earnings per share of 0.59 cent in Q4 2018.

For the full year ended Dec 31, revenue fell 67 per cent to US$135,000 from US$407,000 previously. Full-year earnings per share were 1.5 US cents, up from 0.09 cent in FY2018.

Revenue in both years came primarily from technical services rendered to external clients by Rex Technology Management.

"Our prudence in cash management and our strategy to remain debt-free long term have allowed us to tide over the oil price rout which started in 2014 and improved only in 2019," said executive chairman Dan Brostrom.

"We are pleased to have realised our initial business model to find oil, sell and recycle capital in 2019, with the divestment of the Rolvsnes discovery and related assets in Norway, leading us to be in the black for FY2019 and boosting our war chest," he added.

The group said that the "good appraisal well results" in Oman are heartening, and it expects to reap recurrent income from oil production there going forward.

No dividend was declared, as the group only turned profitable recently, after completing the sale of interests in licences to a third party.

Rex International shares closed down 0.5 cent or 2.51 per cent to S$0.194 on Friday before the results were announced.