Hyflux pursues 'asset light' strategy with plans for sell-offs
Hyflux has reported revenue growth of 122 per cent to SGD 987 million ($704 million), while profit before tax (PBT) dropped sharply in the year to end-December 2016.
The group’s financial review further revealed that its “asset light strategy” will see it explore the sale of a stake in Tuaspring plant, Singapore; and seek buyers for its stake in Tianjin Danang Desalination Plant portfolio in China.
Hyflux stepped up its interest in Tianjin Danang from 50 per cent to 100 per cent in 2015; and in 2016, the provisional fair value was restated upward by SGD 11.2 million on independent assessment.
Hyflux completed the sale of Galaxy NewSpring Pte Ltd to Yunnan Water of Hong Kong for $136.5 million in March 2017.
The 2016 revenue growth was attributed to TuasOne Waste-to-Energy project in Signapore, and Qurayyat Independent Water Project, Oman. However, profits from EPC activity on these two projects were “largely wiped out by losses arising from the weak Singapore power market and electricity prices,” the company said.
PBT fell by 97 per cent to SGD 1.7 million ($1.2 million) for the year. PBT margin was 0.2 per cent in 2016, down from 11.2 per cent in 2015.
The Municipal business grew revenues by 118 per cent to SGD 921 million; the Industrial segment’s revenues rose by 192 per cent to SGD 70 million; and revenue from other sources was up 150 per cent to SGD 5 million, in 2016.