LONDON (Alliance News) - Greka Engineering & Technology Ltd Thursday said it is analysing whether the costs associated with its listing on AIM are worthwhile as the company reported a narrower loss in 2015 through improved margins and lower costs.
The company said its pretax loss amounted to USD1.6 million in 2015, shrinking from the USD2.0 million loss booked in 2014 after the company managed to improve its gross margin and reduce its administrative costs.
Although revenue fell slightly to USD5.18 million from USD5.23 million, Greka's gross profit increased to USD1.4 million from USD1.2 million. Also contributing was a reduction in total administrative costs to USD2.9 million from USD3.1 million a year earlier.
Greka is an engineering and technology business serving the unconventional gas sector that also holds pipeline, gas compression and power generation assets in China. The company said it had 159 customers in China at the end of 2015, a 6.0% rise from the 150 customers on its books at the end of 2014.
Greka processed a total of 1.4 billion cubic feet of gas in the year through its facilities, rising from 1.1 billion cubic feet the year before. The amount of processed gas delivered also rose to 1.2 billion cubic feet from 980.0 million cubic feet.
The amount of gas used to generate power significantly rose to 200.0 million cubic feet from only 4.9 million cubic feet the year before, but that led to a large rise in the amount of power generated in 2015, totalling 17,160 megawatt hours compared to the 13,853 megawatt hours generated in 2014.
Greka's gas gathering pipelines continued to expand in the year, as did the company's power lines.
"2015 was a year of achievements for the company with milestones across all business units. Going forward we expect to capitalize on the momentum created during 2015 in improving our gathering infrastructure, expanding our power generation foot print and delivering innovative solutions for our clients," said Executive Chairman Randeep Grewal.
Grewal is an integral part of the company as he is also the chairman of Green Dragon Gas PLC and the chief executive of Greka Drilling Ltd. Greka Engineering and Greka Drilling both have Green Dragon Gas as a major customer on their books.
Greka Engineering said there are 39 casing pressure production pumps dedicated to delivering gas from Green Dragon's wells in China to its production facilities, whilst the additional power liens constructed in 2015 connected 23 additional wells owned by Green Dragon Gas to the power grid.
Away from the other London-listed companies that Greka Engineering works with, the company signed new power line construction contract and a new framework agreement with China United Coalbed Methane Corp and optimised its compressor layout to maximize single well production and keep optimum casing pressure well production, it said.
"2015 was a year of achievements for the company with milestones across all business units. Going forward we expect to capitalise on the momentum created during 2015 in improving our gathering infrastructure, expanding our power generation foot print and delivering innovative solutions for our clients," said Grewal.
"Despite our progress during 2015, we note the company's continued poor share price performance and the lack of liquidity in its shares, and are considering whether the costs of maintaining its listing on AIM are justified by the benefits the listing brings. An update on this matter will be announced in due course," he added.
Greka Engineering shares were trading flat on Thursday morning at 0.950 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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