Starburst's net loss widens 10% to $2.1 million

Operating expenses, higher employee benefits are among the culprits.

Although engineering group Starburst Holdings clinched some promising projects, the group has endured setbacks due to higher project cost resulting to a stretched net loss of $2.1 million from $1.9 million last year.

Employee benefit expenses, as well as depreciation and other operating expenses are to blame as well, reducing the group's operating income during the half year.

"The increase in employee benefits expenses was primarily due to the recruitment of additional staff and provision of bonus," Starburst said in its financial report.

Even if the group's revenue grew 111.1% on a year on year basis to $7 million, production costs jumped at an overwhelming 114.3% to $13.5 million.

"The increase was primarily due to the additional costs incurred in fabrication and installation work phases of Marina One architectural steel project and design and fabrication costs for the three firearm shooting range projects in the Middle East in HY2016 as compare to HY2015," the engineering group said.

Meanwhile, due to the purchase of new machines and equipments, depreciation expenses boomed to 85.5%.

Its operating expenses also shoots 44.4% as there is an increase in foreign currency exchange loss from their projects in the Middle East.

According to OCBC Investment Research, the uncertain outlook over oil prices may continue will continue to affect the group especially by the deferment and reduction in size for projects in the Middle East.