SINGAPORE (Apr 26): AsiaPhos has reversed into the red in 1Q18 with a loss of $0.7 million for 1Q18 compared with earnings of $0.1 million a year ago on lower margins.

As AsiaPhos is currently engaged in a legal dispute with China’s Sichuan provincial government regarding its mining operations there, the results of the group’s upstream segment have been reclassified under discontinued operations.

Group revenue for continuing operations fell 5% to $9.5 million from $10 million in 1Q17 due to a lower quantity of P4 sold as customers were affected by pollution controls, according to AsiaPhos in its filing on Thursday.

In all, gross profit margin fell to 6.4% from 9.5% previously due to higher production costs, which were partly due to costs resulting from the restarting of both P4 furnaces over the Lunar New Year break in China, compared to only one of the two furnaces stopped for the festive period in 1Q17.

The group also started to purchase rocks after depleting its inventory of phosphate rocks previously extracted from its mines, therefore contributing to the higher cost of raw materials.

General and administrative costs grew to $1.3 million in 1Q18 from $0.9 million a year ago, mainly due to higher professional fees and exchange loss booked over the period.

Profit came in 41% lower from discontinued operations at $0.2 million compared to $0.3 million year ago due to lower revenue from sales of phosphate rocks, as well as lower general and administrative expenses after terminating the services of mining employees in Nov 2017.

Going forward, AsiaPhos says its management will concurrently review its current operational requirements and take steps to reduce overheads. It will also continue to develop the export market for downstream chemicals and explore other opportunities to create income.

Shares in AsiaPhos closed 4.6% lower at 2.1 cents on Thursday.

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