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Sky China profit in Q4 plunges 58%

Sky China profit in Q4 plunges 58%

SKY China Petroleum Services posted a 58 per cent slump in net profit to $1.66 million for the three months ended Dec 31, citing lower revenue and impairments.

Barring unforeseen circumstances, the group should remain profitable in FY2012.

– Sky China

Revenue in the fourth quarter slipped 15 per cent to $12.6 million on lower revenue from the transportation segment, where demand was hit by higher oil prices and an absence of rental income from a rig that was disposed of.

Sky China also marked a $2.3 million impairment of intangible assets as it wrote off goodwill and customer relationships in the time-charter segment.

The group’s release of Q4 and full-year results yesterday followed a change of auditors to Foo Kon Tan Grant Thornton in December after its previous auditors, Ernst & Young (E&Y), quit abruptly.

E&Y’s resignation was part of an internal process of the E&Y worldwide group procedure arising from the resignation of Ernst & Young Hua Ming (E&Y HM), the E&Y China member firm, as auditors of SinoTech Energy Ltd. SinoTech chairman Liu Qingzeng is also chief executive of Sky China.

A subsequent review by Sky China’s chief financial officer on bank statements and significant funds transactions uncovered no irregularities or unauthorised transfers at Sky China.

For the full year, Sky China’s net profit fell 2 per cent year-on-year to $15.2 million, in spite of a 9 per cent decline in revenue to $55.9 million and a lack of one-off gains.

The group said weakness in the transportation segment was partly offset by a strong performance in the rental segment. It had reported one-off gains of $3.2 million in the disposal of a subsidiary and a fair-value gain of $639,000 on derivatives in the year-ago period.

‘Barring unforeseen circumstances, the group should remain profitable in FY2012,’ Sky China said. ‘The coastal refined oil transportation sector in the PRC continues to be robust, the management still believes there is strong demand for oil consumption as the Chinese economy continues its growth.’

The group has taken delivery of a new DWT8,800 vessel, which will commence revenue voyages in March, and has further invested in a new DWT10,800 refined oil product vessel that is scheduled to be delivered in the third quarter.

Basic earnings per share for 2011 fell to 3.79 cents from 4.74 cents in 2010.

It has declared a final dividend of 0.48 cents, unchanged from a year ago.

adapted from businesstimes.com.sg

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