For the quarter ended 31 March 2017, Hyflux Ltd recorded a profit of S$0.8 million (US$0.57 million) after tax and minority interests (PATMI), compared to the S$7.3 million (US$5.19 million) seen in 2016’s first quarter. The Tuaspring plant, categorised as Held for Sale, reported a S$27 million (US$19.2 million) loss as a result of the weak Singapore power market. Excluding Tuaspring’s loss, Hyflux’s PATMI stands at S27.8 million (US$19.77 million), and in comparison to first quarter results in 2016 at S$25.8 million (US$18.35 million), there is an eight per cent increment.
Excluding Tuaspring, revenue for the quarter this year was S$91.5 million (US$65 million), less than half from the S$222.8 million (US$158.8 million) seen in 2016’s Q1, which was primarily fuelled by the construction of the TuasOne Waste-to-Energy (WTE) in Singapore and the Qurayyat Independent Water Project (IWP) in the Sultanate of Oman.
Hyflux’s revenue remains mostly driven by municipal projects, making up 87 per cent of the revenue. Core markets in the Middle East and North Africa, and Singapore, make up 26 per cent and 64 per cent of the total revenue respectively.
During Q1, Hyflux also managed to successfully conclude the divestment of its 50 per cent quity stake in the Galaxy Newspring portfolio, and receiving S$177.85 million (US$126.5 million) in remaining proceeds.
Outlook for 2017
In the remaining months left in 2017, Hyflux will be executing its EPC order book with the majority of its revenue coming from the TuasOne WTE project in Singapore and numerous projects in the Kingdom of Saudi Arabia. The profits from these projects will likely offset the losses taken from the Singapore power market.
The Qurayyat IWP in the Sultanate of Oman will likely begin operations in the second half of 2017, after tests have been completed and the facility is commissioned. Contract negotiation for the Ain Sokhna IWPP in Egypt will continue, though progress is slower than originally expected.
Hyflux is also in the midst of divesting its full interest in the Tianjun Dagang desalination facility in Tianjin, China, as part of its asset light strategy in order to recycle capital for new investments. The process of partially divesting the Tuaspring plant has also begun, though it is also subject to the relevant regulatory approvals.
The Tianjin Dagang desalination plant and Tuaspring plant are both classified as Held for Sale, and planned to be completed before the end of the year. The monetisation of the assets will free up liquid capital that can be used for new projects as well as lowering Hyflux’s leverage.
Source: Hyflux Ltd