SINGAPORE (Feb 9): Hupsteel sank into the red in 2Q18 with a $2.1 million loss compared to its profit of $0.5 million a year ago, largely due to the write-off of fixed assets related to the group’s redevelopment of 38 Genting Lane.  

See: Hupsteel to redevelop Genting Lane property for $9.3 mil

Revenue for the quarter dipped 20% on-year to $10.3 million from $12.1 million previously, which the group attributes to the continued slowdown in the marine, oil and gas (O&G) sectors and the year-end holiday season.

Over the latest quarter, other losses widened to $2.1 million compared to just $15,000 a year ago, which was a result of the write-off of fixed assets due to the re-development of 38 Genting Lane.

In line with the lower revenue, gross profit for the quarter was $3.1 million was lower than the $3.4 million reported for 2Q17.

Gross profit margin for the quarter however improved to 30.3% from 27.9% a year ago due to better selling prices achieved by certain products.

Staff costs fell to $1.6 million from $1.9 million a year ago as the group continued its cost-cutting measures, while other operating expenses were higher at $1.3 million compared to $0.8 million in 2Q17 in the absence of a write-back of allowance of doubtful trade receivables.

The latest set of 2Q results brings Hupsteel’s earnings for 1H18 to $2.6 million compared to the $0.3 million profit in the same period a year ago.

A special interim cash dividend of 2 cents has been declared.

In its outlook, the group notes strengthening selling prices despite the soft local market due to improving overseas demand, especially in the US. It also highlights some preliminary signs of a pick-up in demand for steel products after the Chinese New Year holidays on the back of recovering oil prices.

Hupsteel says it is adjusting its purchasing activities to respond to any expected improvement in demand.

Shares in the group closed 1 cent lower at 87 cents on Friday.