Magnus Energy sinks deeper into the red in Q3

MAGNUS Energy Group sank deeper into the red in the fiscal third quarter ended March 31, with a net loss of S$1.01 million compared to a loss of S$544,000 a year ago.

This came mainly on the back of weaker revenue, loss from share of results of joint ventures, and higher other operating expenses.

The group's revenue tanked 38.7 per cent to S$3.3 million in the quarter and gross profit margin fell from 20 per cent a year ago to 14.5 per cent due to lower profit margin recorded from the wastewater segment.

Magnus's oilfield equipment supplies and services segment, Mid-Continent Equipment Group Pte Ltd, and the latter's subsidiaries (Midcon Group) currently form the group's main core business.

The overall performance of the Mid-Con Group remains weak, posing a drag on the group, Magnus said in its financial statement released on Monday.

The group has extended a redeemable convertible loan in its investment in PT Hanjungin, with a view to converting the loan into equity in PT Hanjungin. To further mitigate its risks and enhance the recoverability of the loan, it is currently negotiating with its partner to increase the loan collateral.

For the existing project to build and manage a microalgae oil cultivation facility in Selangor, Malaysia for Algae Farm Engineering Sdn Bhd, Magnus said it has provided some 70 per cent of the project budget and expects delays in completing the project due to delays in fund-raising.

Magnus added that it is seeking to raise sufficient and timely funds through its existing notes issue programme, realise some liquid assets and plausible loans to complete the project. The completion timeline remains to be sometime during the fourth quarter of the group's current financial year.

"The project is expected to have a positive effect on the net tangible assets per share and earnings per share of the group once the full production has started," Magnus said.