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Soilbuild flags Q4, full-year loss from S$1.4m arbitration award against unit
SOILBUILD Construction Group on Tuesday flagged that it would post a loss for its fourth-quarter and financial year ended Dec 31, mainly due to an arbitration award on Feb 25, 2019, against its wholly-owned subsidiary, Soil-Build (Pte) Ltd.
The arbitration was commenced by Soil-Build against a sub-contractor for damages suffered due to the subcontractor’s delay in the completion of work for a construction project.
The arbitrator, however, has ruled that the subcontractor is not liable to pay the Soil-Build any damages for the delay. Instead, Soil-Build is liable to pay the subcontractor the balance of the amount due to it. This comprises about S$1.4 million, without taking into account accrued interest payable, among other things, Soilbuild Construction said in an exchange filing.
The company will have to recognise this sum and other associated project costs - including those damages previously deemed receivable, and amounts under the retention sum - as additional cost of sales for its fourth-quarter and financial year 2018, said Soilbuild Construction.
The company is in the midst of making an assessment with a view to finalising the amount of other associated project costs to be recognised, it added.
It also said that Soil-Build is in the process of taking advice from its solicitors in relation to the arbitration award, and "intends to take all steps necessary to protect its interests".
Further details of the group's financial performance will be disclosed when its announces its unaudited consolidated financial results for Q4 2018 and FY2018, expected to be on or around Feb 27, the company said.
Shares in Soilbuild Construction closed flat at 10.2 Singapore cents apiece on Feb 20.