Magnus Energy's profits drop 12.2% in 2014

Decrease in revenue resulted from lower tubular sales.

Magnus Energy continues to focus its efforts on sales of equipment and spares, leasing revenues and project sales which yield better margins compared to high value low margin tubular products.

In a release, the Group announced that revenue decreased by 1.9% from S$50.8 million for FY2013 to S$49.8 million for FY2014. The decrease in revenue resulted from lower activities in tubular sales and decrease in project sales as compared to FY2013.

Cost of sales increased by 0.9% from S$39.9 million for FY2013 to S$40.2 million for FY2014, mainly attributable to tubular products which affects the gross margin as elaborated below.

Gross profit has decreased by 12.2% from S$11.0 million for FY2013 to S$9.6 million for FY2014. Gross margin decreased from 21.6% for FY2013 to 19.3% for FY2014, mainly due to the sale of tubular inventories at prices below costs.

Here’s more from Magnus Energy:

The Group’s main core business, the oilfield equipment supplies and services segment, Mid-Continent Equipment Group Pte Ltd and its subsidiaries (“Mid-Con Group”), remains cautiously optimistic about its growth prospects. The Mid-Con Group will continue to focus on its multi-pronged strategy to expand geographically, diversify its business model, widen its product range and enhance its processing capabilities to remain profitable in the next twelve months.

The Group is exposed to movements in US Dollar and Australian Dollar and price fluctuation of quoted equities in our investment portfolio. Such movements in the currencies and equities market may have a significant impact on the Group’s future results.

Going forward, the Group will continue to pursue acquisition and investment opportunities across the Asia Pacific region.