Hyflux core loss at $30.6 million

Financial close of Dahej project suffering delays.

Hyflux faced yet again another challenging quarter despite divestment gains of nearly $83 million from the sale of its HIC building.

OCBC reports that without the divestment gain, Hyflux would have posted a core operating loss of $23 million. Revenue shrunk 35% to $169 million, while reported net profit surged nearly 4x to $99.3 million. Adding these up, core operating loss would have come in around $30.6 million. Nevertheless, Hyflux declared an interim dividend of $0.007/share, unchanged from 1H13.

Besides the usual slow outlook guidance, management also warns that the delay in the connection of its Tuaspring power plant to the national power grid will continue to have "operating cost implications" over the next few quarters.

Last but not least, Hyflux adds that the momentum of municipal projects being made available for tender has been slower than anticipated in the past year.

Here’s more from OCBC:

Nevertheless, Hyflux remains keen to actively pursue opportunities for large-scale projects in MENA, Asia and even Latin America. Management highlights that it has sufficient capital to do this, especially after the recent divestment of non-core assets (like HIC) and issuance of perpetual securities in Jan and July this year. Hyflux intends to use the proceeds to finance its infrastructure projects, acquire new technology and investments in R&D, and expand/automate its membrane manufacturing operations.