LONDON (Alliance News) - Greka Engineering & Technology Ltd Thursday said its pretax loss for 2014 widened slightly in what was its first full year as an independent company, despite reporting higher revenue.
Greka Engineering provides engineering, procurement, construction and management services for infrastructure projects in China's unconventional gas sector.
Greka, which listed on London's AIM in September 2013 after demerging from Green Dragon Gas Ltd, said it made a USD2.0 million pretax loss in 2014, compared with a USD1.9 million pretax loss in 2013.
Revenue increased to USD5.2 million from USD3.7 million and the cost of those sales increased to USD4.1 million from USD3.3 million, meaning that gross profit increased to USD1.2 million from USD352,000. That increase was more than offset by an increase in administrative expenses to USD3.1 million from USD2.2 million and higher finance costs.
However, total comprehensive income attributable to owners of the company widened to USD1.8 million in 2014 from USD1.3 million, even as the company recorded a profit from discontinued operations of USD241,000 as opposed to a loss of USD133,000 in the prior year. That was more than offset by a USD95,000 loss on exchange differences on translation from foreign operations, compared with a USD606,000 gain in the prior year.
"High quality infrastructure assets (including coal bed methane field compressors, pipeline gathering systems and an integrated production facility form the core assets of the Group) provided reliable and increasing revenue for the company," Chairman Randeep Grewal said in a statement.
Grewal also pointed out that the company's move to renegotiate its gas-gathering system usage, power sales and compression fees with client Green Dragon Gas also helped results.
"The renegotiated gas processing fee and power price provided for a 274% increase to gas process revenue over the previous year and power sales revenue increased by 185%," Grewal said.
"The company signed a three-year power sales contract with Jiaqin Agriculture which became our third client for power and the first unaffiliated client. Furthermore, we signed a power line construction agreement with CUCBM, a CNOOC subsidiary, under which we successfully built power lines connecting one of its valve groups to supply nine wells to our power grid. This initial valve group is to serve as a pilot to CUCBM on the benefits of connecting its remaining fourteen valve groups into our infrastructure," Grewal said.
The chairman also set out his expectations for the year ahead, as the company continues life as an independent company.
"Looking forward to the coming year, we expect our continued growth to be diversified with increasing IPF utilization, rising power sales to all four clients, expanding power grid to CUCBM, reinitiated SCADA sales and stable dispenser sales within our existing China market," Grewal said.
Greka shares were untraded on Thursday. The stock was last traded at 1.00p on April 2.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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