The increase was, however, mitigated by a decline in storage and handling from the warehousing & logistics division amid intense competition in the financial period under review.
In tandem with higher revenue, cost of sales increased by 61.4% to $14.1 million in 1Q18 from $8.7 million in 1Q17 mainly stemmed from additional expenses from the operations of TNS and Wuzhou Xing Jian.
While the group’s gross profit increased by 25.7% to $3.3 million in 1Q18 from $2.6 million in 1Q17, the composite gross margin declined from 23.3% in 1Q17 to 19.1% in 1Q18, attributable to lower gross margin from the warehousing & logistics division.
Total operating expenses also increased 63.1% to $3.7 million in 1Q18, compared with $2.2 million in the last corresponding period. This was mainly due to higher operational costs with the addition of TNS and Wuzhou Xing Jian as well as an increase in amortisation of intangible assets.
Amid the subdued economic growth and oil price recovery, the chartering rate for the liquefied gas carrier vessel continued to come under pressure. Share of results of joint venture saw a reverse from a profit of $0.6 million in 1Q17 to a loss of $0.7 million in 1Q18.
In its business outlook, GKE expects the business environment to continue to be challenging amid the geopolitical uncertainties and subdued economic growth, with inflationary cost pressure weighing on the operating performance of the group.
Shares in GKE closed at 13 cents on Thursday.
