SINGAPORE (July 31): Integrated engineering, real estate and infrastructure group TEE International sank to full year losses of $17.8 million for the FY19 ended May, some 78.2% worse than the net loss of $10.0 million reported a year ago.

Loss per share increased to 3.22 cents in FY19, compared to loss per share of 1.81 cents in FY18.

FY19 revenue jumped 56.6% to $420.5 million, from $268.5 million a year ago, mainly due to higher contribution of progressive revenue from on-going engineering projects, as well as inclusion of revenue from waste management and recycling subsidiaries.

However, FY19 gross profit contracted by 16.3% to $30.8 million, as cost of sales outpaced the increase in revenue. Cost of sales rose 68.2% to $389.7 million, from $231.7 million a year ago.

Other operating income shrank 66.1% to $2.6 million during the quarter, due mainly to the absence of the negative goodwill on the acquisition of the waste management and recycling subsidiaries, as well as foreign currency exchange adjustment gain in FY18.

Administrative expenses rose 25.9% to $29.5 million, on the back of depreciation of Larmont Hotel and start-up costs incurred by infrastructure’s new business segment.

Share of profit of associates and joint venture decreased by $3.3 million, due mainly to the share of losses from subsidiary TEE Land’s associated companies.

As at end May, cash and cash equivalents stood at $57.5 million.

Looking ahead, the group says the business environment remains competitive for its engineering segment.

In its real estate business, it also continues to take a cautious approach when seeking opportunities to acquire new land sites and in making any investments, in view of the challenging property market.

Meanwhile, the cost of business operation continues to rise in its infrastructure business, largely due to increasing manpower and rental costs.

The group in April proposed a spinoff of its infrastructure business to be listed on the Catalist board of the Singapore Exchange.

The group had engaged professional advisers PrimePartners Corporate Finance as issue manager and sponsor and Rajah & Tann Singapore LLP as Singapore counsel to deal with the proposed listing.

See: TEE International to spin off infrastructure business in Catalist listing

Shares in TEE International closed flat at 9.6 cents on Tuesday.