SINGAPORE (Aug 10): AP Oil International posts earnings of $1.5 million for the half year ended June, falling 47% from earnings of $2.8 million a year ago.

Revenue grew 16% to $44.3 million in HY2017, but was outpaced by a 24% increase in cost of sales as a result of the higher manufacturing volume and an increase in raw material prices.

Gross profit margin decreased by 6 percentage points to 13% in HY2017, due mainly to a spike in raw material prices from April to June 2017.

Consequently, gross profit fell 18% to $5.9 million in HY2017, from $7.2 million a year ago.

As at end June, cash and cash equivalents stood at $30.7 million.

AP Oil says the volatility in crude oil prices had presented challenges to managing its raw material costs and finished good selling prices.

“The prolonged downturn in the shipping industry impacting marine lubricant margin in 1H 2017 may continue to the end of 2017,” the group says in a filing to SGX on Thursday.

It adds that it is mindful of managing its bottom-line, and is making conscientious effort in new business development to bolster the overall performance of the group in FY 2017.

Shares in AP Oil closed half a cent higher at 27.5 cents on Thursday.