Singapore-listed marine engine maker XMH Holdings’ (XMH’s) first-quarter 2016 profit dropped 46.9% year on year (y/y) to SGD740,000 (USD460,000).
The company’s revenue declined 7.8% y/y to SGD23.8 million, while its gross profit also dipped 4.8% y/y to SGD6.3 million.
XMH attributed the decrease in revenue to lower contribution from its projects and aftersales business segments. Nonetheless, the company stated in its filing to the Singapore Exchange that the decrease was offset by higher revenue contribution of SGD2.1 million from its distribution business segment, driven by more deliveries in the first quarter.
XMH’s costs increased 24.8% y/y to SGD2.1 million because of higher market expenses, while its administrative expenses hiked 20.6% y/y to SGD3.7 million because of the consolidation of marine engine-maker Z-Power Automation (ZPA) and higher intangible assets amortisation, offset by lower professional fees incurred in the period.
Meanwhile, the current slowdown in the Indonesian economy had affected XMH’s financial performance, as the country is a major geographical market for the XMH Group. The group seeks to improve its profitability by diversifying its business to include infocomm data centres and infrastructure projects.
XMH also hopes to see positive contribution from increased orders in fishing and commercial activities, as well as increased enquiries from Indonesia for marine engines.
At present, the company’s orderbook remains healthy, with over half of the contract won by ZPA and engine-maker Mech-Power Generator worth SGD23.1 million scheduled for delivery by the end of 2015, while the rest to be delivered in 2016.