Hyflux has posted a 25% rise in profit attributable to shareholders for the first three months ended 31 March 2010 (1QFY2010). The net profit of $6.4 million was achieved against a 15% rise in group revenue of $101.3 million.

Hyflux says group revenue for the first quarter was boosted by higher revenue contributions from the Middle East & North Africa (MENA) region where the group is developing two large-scale desalination projects in Algeria, including the world’s largest membrane-based seawater desalination plant in Magtaa with a designed capacity of 500,000 cubic metres of water per day. The MENA region contributed 78% of total revenue. The China market contributed 15% of total revenue, while Singapore and other markets made up the remaining 7% of total revenue.

Despite the higher revenue recorded, costs arising from raw materials and consumables used and sub-contractors’ cost as well as staff costs remained stable.

The group’s cash position continued to strengthen in the new financial year. Cash and cash equivalents stood at $198.8 million at the end of March 2010, compared to $166.7 million as at 31 December 2009.

Hyflux says the municipal sector will continue to be the main driver of the group’s revenue. Both the MENA region and China will remain as key markets for the group in the municipal sector where the company has established a strong track record in desalination and in wastewater treatment and recycling.

While the global economic situation has improved, Hyflux says inherent risks remain that could thwart business recovery. For instance, a significant increase in the prices of commodities and in oil prices will have an impact on business costs, while credit tightening will have implications on credit spreads.