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XMH Holdings Q2 losses balloon to S$3.1m despite revenue rise

MAINBOARD-LISTED XMH Holdings disposed of a subsidiary at a S$2.2 million loss, and it resulted in red ink for its bottom line, which almost doubled to S$3.1 million for the second quarter.

This came despite a 51.7 per cent increase in revenue from S$12.2 million (restated) to S$18.5 million for the quarter to October, according to the company's financial results released on Wednesday. The disposal of its subsidiary Z-Power Automation (ZPA) on Oct 8 at a loss of S$2.2 million and the S$430,000 loss from the discontinued operation caused XMH's quarterly loss to balloon by 93.8 per cent year-on-year from S$1.6 million to S$3.1 million.

XMH is a diesel engine, propulsion and power-generating solutions provider to the marine and industrial sectors across Asia. Subsequent to the disposal of ZPA, the group's business comprises primarily distribution, after-sales and project segments.

The company's half-yearly losses stood at S$5.5 million, more than three times the S$1.8 million for the year-ago period. But revenue was S$29.3 million, an improvement of 19.1 per cent.

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Consequently, net asset per share as at end-October was 47.8 Singapore cents, lower than the 52.24 cents as at end-April.

The company is not giving out dividends as the group has not been profitable for the first half of the financial year. A company statement said that the board wishes to conserve cash so as to ensure sufficiency of funds for its daily business and operational needs, as well as to capitalise on any potential business growth and expansion opportunities.

XMH said: "The outlook for the group remains challenging and competitive. Our engine-distribution business is improving but at a slow pace. Customers (and their lenders) are cautious amid uncertainties over the global economy. For our projects business, we are facing strong competition and the margin is tight."

XMH shares closed flat at S$0.145 on Wednesday before the results were announced.