Mainboard-listed Hyflux today announced a net profit attributable to shareholders for the third quarter of FY2010 of $19 million against revenue of $137.5 million.

The net profit for the third quarter of FY2010 was 5% higher than that achieved in the third quarter of FY2009, while group revenue was an increase of 9%. The weakening US dollar against the Singapore dollar led to an unrealized foreign exchange loss for the group which amounted to $7.9 million.

Total operating and finance expenses went up by 10% to $121.0 million as a result of higher costs incurred for the increase in manpower, depreciation and amortization, bank borrowings, and professional fees for projects and marketing expenses — which are in line with the group’s expansion plans.

Sales from both the municipal and industrial sectors increased in the third quarter of FY2010 compared to the third quarter of FY2009. The municipal sector contributed 85% of group revenue, or $117.0 million for the third quarter of FY2010, in contrast to the $113.3 million recorded in the comparable period in FY2009.

The industrial sector’s contribution rose 54% to $19.6 million for the third quarter of FY2010 from $12.7 million previously, reflecting the steady progress made in projects that were put on hold by customers in China during the global economic downturn.

In terms of geographical contributions, the Middle East & North Africa (MENA) region continued to the group’s largest market, accounting for 62% of total revenue. China contributed 29% of total revenue, while Singapore and other territories made up the remaining 9%.

The rise in contribution from the Singapore market was due mainly to the two projects that the Group has been awarded at the start of the year. The projects involved Singapore’s largest membrane bioreactor at the Jurong Water Reclamation Plant for Singapore’s water agency PUB and stage one of the Tembusu Seawater Desalination Plant on Jurong Island for Tuas Power.

Earnings per share for the quarter was 3.36 cents compared to 3.45 cents in the third quarter of FY2009 due to an increase in shareholders’ equity as a result of new shares issued largely under the Warrants Subscription Agreement with Istithmar. Net gearing ratio stood at 0.52.

The group’s cash position increased to $307.6 million at the end of September 2010 compared to $166.7 million as at 31 December 2009.

Moving forward, Hyflux says the municipal sector will continue to be the main driver of group revenue particularly in the MENA region. The industrial sector is likely to show further improvement, boosted by increased economic activities in China.

However, risks remain that could impact the group’s growth. Volatility in the currency markets, persistent high unemployment in the developed markets of US and EU, and threats of sovereign debt defaults are still present and could affect the rate of recovery of fragile global economies. In addition, continued fluctuations in the foreign exchange rates of the US dollar and the Chinese yuan will have an impact on the group’s financial performance as its revenues are dominated in the two currencies.