Sales revenue from the Equipment segment increased by 28.7% to S$13.4 million compared to S$10.4 million in 3Q16, mainly due to improvement in sales of equipment parts to our customers.
Charter revenue from the Vessel Chartering segment increased by 3.1% to $3.3 million in 3Q17 as compared to $3.2 million last year, due to improve in utilisation rate of Arkstar fleet.
Cost of sales increased 5% to $13.0 million from $12.4 million a year ago, due to increase in cost of sales of equipment parts in Equipment segment and offset by the decrease in Vessel Chartering segment.
Hence, gross profit for the period came in at $3.8 million, a threefold increase from $1.3 million in 3Q16.
Overall gross profit margin increased to 22.5% as compared to 9.3% in 3Q16.
Other expenses dropped 95.1% to $1.77 million compared to $36.1 million a year ago, mainly due to allowance of doubtful debts on trade and other receivables of $28.3 million, impairment of property, plant and equipment of $6.7 million in 3Q16.
As at Sept 30, the group’s cash and cash equivalents stood at $2.25 million.
Although there has been an improvement in Equipment Manufacturing/Trading business, the outlook remains uncertain.
In its outlook, Hoe Leong says the Vessel Chartering segment continues to be weak. While the group has four vessels on term charter, there continues to be downward pressure on charter rates.
The credit and economic conditions faced by the group and its customers are also poor.
Shares in Hoe Leong closed 1.6 cents on Friday.
