The Straits Times / The Business Times News on Hyflux

Hyflux splashes ahead with 77% profit surge

HOME-GROWN water treatment company Hyflux is looking to pump up its recurring income stream after posting a 77 per cent jump in its full-year net profit to $46.3 million, thanks to one-time gains.

STEADY FLOW: Hyflux expects good incurring income of $90 million yearly for the next 20 to 30 years when its municipal projects in Singapore, China and the Middle East are done, says Ms Lum.

Its strong results for the year ended Dec 31 were propped up by one-time items such as an $8.2 million gain mainly from the sale of the Hyflux building, as well as a $3.77 million gain from selling Hyflux's 50 per cent stake in SingSpring, a desalination plant project in Tuas.

Revenue at the mainboard-listed firm jumped by 48 per cent to $131.5 million, thanks mainly to higher municipal sales which contributed $74.2 million, or 56 per cent, of its revenues.

When its municipal projects in Singapore, China and the Middle East are completed in the next one to three years, Hyflux can look forward to 'good incurring income of about $80 million to $90 million each year for the next 20 to 30 years', said Hyflux chief executive Olivia Lum at a press conference yesterday.

This is in line with Hyflux's strategy to draw 30 to 40 per cent of its turnover from projects with recurring income five years from now.

Revenue contribution from Hyflux's industrial projects segment fell to 44 per cent, down from 81 per cent a year earlier, largely due to fewer industrial water projects in China.

Hyflux chalked up a hefty 94 per cent surge in costs of raw materials, consumables and accruals to $69.5 million.

The group's personal expenses climbed by 79 per cent to $16.7 million, due to the addition of 217 people - largely technical and engineering staff - to its headcount, bringing the total to 682.

Hyflux also chalked up higher legal costs from securing patents for its membrane applications which can be used for diverse purposes such as purification of sugar juice and organic acid.

Hyflux intends to sell these membranes to companies in China, India and other markets this year to 'boost its revenues', said Ms Lum.

Annual sales of membrane products to China are projected to hit $2.47 billion - or 10 to 15 per cent of the world market - by 2015.

Hyflux's order book has doubled to $465 million compared with a year earlier. These projects will have a total value of $535 million and total annual capacities of about half a million cubic metres per year when they are completed in the next one to three years.

Earnings per share rose to 9.21 cents, from a restated 5.55 cents for the previous financial year.

Net asset value per share rose 1.1 cents to 36.8 cents as at Dec 31.

Hyflux declared a final dividend of 1.35 cents per share, up from the 1.27-cent dividend for the previous year.