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Trio of engineering stocks rings up full-year net losses

THREE engineering-related listed companies have reported full-year net losses, in financial statements released on Thursday night.

Catalist-listed crane provider Hiap Tong Corp clocked a net loss of S$8.12 million for the year to March 31 - a reversal from the previous year’s earnings of S$2.25 million.

The plunge into the red came on hefty impairment losses for property, plant and equipment and right-of-use assets, as the leasing business faced a weak operating environment.

That was even though revenue grew by 8.4 per cent to S$58.8 million. Growth in port services offset a decrease in income from leasing, where higher-tonnage cranes saw lower utilisation.

Meanwhile, environmental solutions company TriTech Group, which is also Catalist-listed, saw a loss of S$11.2 million in the same period to March 31, narrowing from S$27.4 million before.

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The bottom line was partially soothed by divestment gains from the sale of subsidiaries, despite a 62.1 per cent fall in turnover to S$10.6 million. The group fingered “the significant reduction in the contract sum” for certain engineering projects as the culprit for the decrease in revenue.

Mainboard-listed Tee International, which is under scrutiny after an independent external auditor issued a disclaimer of opinion for FY2019, posted a net loss of S$58.6 million for the year to May 31 - more than three times the loss of S$18.2 million in the year before.

Even though revenue from continuing operations rose by 32.3 per cent to S$329.9 million, the bottom line was walloped by a higher cost of sales, including Covid-19-related expenses and narrower margins, as well as insolvent customers and other woes at a Malaysian subsidiary.

The group also faced higher finance costs from penalty interest on the early redemption in February of three-year notes due Dec 19, 2020, as well as losses from discontinued operations.

No dividend was recommended by all three companies, which also raised concerns about the impact of Covid-19 on engineering and construction in their outlook statements.

Hiap Tong said that the leasing business is expected to be “significantly affected” in Singapore and Malaysia, while its port services arm has been deemed an essential service in Singapore and should yield positive contributions to the group.

Despite the hit to infrastructure construction, TriTech Group said it is still marketing its in-house technologies, including automation solutions, and can access financing options in China.

Meanwhile, Tee International said it expects to gradually resume construction work in the fourth quarter of 2020, with an outstanding engineering order book of S$272.3 million as at May 31.

“Efforts to dispose of the group’s remaining infrastructure assets are continuing,” the company also told shareholders in its financial statements.

Hiap Tong, which last changed hands at S$0.054, saw no trading action on Thursday, while TriTech ended flat at S$0.015 and Tee International at S$0.033, before the results were out.

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