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NewOcean posts USD 479 million FY 2020 loss; possible downsize of oil business

29 Jun 2021

Hong Kong-listed NewOcean Energy Holdings Limited (NewOcean), the parent company of bunkering firm NewOcean Fuel, on Monday (28 June) posted net loss for its audited financial year ended 31 December 2020 (FY 2020).

The group posted net loss of USD 478.7 million (exact: HKD 3,715,896,000) for FY 2020, compared to net profit of USD 82.8 million recorded during FY 2021.

Its total revenue, spread across the liquefied petroleum gas (LPG), oil/chemicals products, and electronic products businesses, was HKD 19.2 billion in FY 2020, down 31% when compared to HKD 27.8 billion in FY 2019.

Among developments highlighted in the latest financial statement was impairment losses of: (i) HKD 610 million deposits paid for purchase of property, plant and equipment related to the Group’s refinery project in Malaysia, (ii) HKD 178 million deposits paid for investment project of constructing a hydrogen manufacturing plant in the PRC; and (iii) HKD 39 million trade deposits paid to a supplier which was put into liquidation in 2021.

“Given that the Group is under debt restructuring, the Group is short of capital resources to invest in existing projects, thus the management decided to discontinue those projects, and make full impairment provision,” it stated.

Auditors of NewOcean, meanwhile, pointed out of the Group’s current borrowings of HKD 6,620,843,000, HKD 4,202,627,000 were overdue.

“In addition, based on the financial position of the Group as at 31 December 2020, the Group was not in compliance with certain restrictive financial covenants and certain borrowings of the Group contain cross-default terms, causing borrowings of the Group of HK$2,418,216,000 as at 31 December 2020 to become immediately repayable in accordance with the respective loan agreements whereas the Group only had cash and cash equivalents of HK$873,742,000 as at 31 December 2020,” stated auditors.

“These conditions, together with other matters described in Note 1A to the consolidated financial statements, indicate the existence of material uncertainties which may cast significant doubt on the Group’s ability to continue as a going concern.”

Directors of NewOcean are undertaking a series of measures to improve the Group’s liquidity and financial position, to refinance its operations and to restructure its debts, according to the auditors.

Amongst measures determining NewOcean’s ability to continue operating as a going concern is, “whether the Group can successfully take measures to down size the oil products business to reduce operating cost,” they wrote.

Related: NewOcean Energy delays release of 2020 financial results; to be published by end June
RelatedNewOcean appoints Crowe as new auditors; replaces Deloitte Touche Tohmatsu
RelatedNewOcean creditor scheme meeting dates at courts now ‘unrealistic’; delayed till further notice
RelatedNewOcean auditors resign due to significant outstanding documents & information
Related: NewOcean revises creditor scheme meeting dates at Hong Kong, Bermuda Courts due to ‘substantial’ amendments
Related: NewOcean records USD 304.3 million loss, portion of SG bunkering business to remain
Related: NewOcean Energy issues USD 304.8 million net loss warning ahead of FY 2020 results
Related: NewOcean proposal to adjourn court scheme meeting approved by creditors
Related: NewOcean creditors meeting application granted by Supreme Court of Bermuda
Related: NewOcean planning creditors meeting, foundation of debt restructuring plan laid out
Related: NewOcean records USD 174 million 1H 2020 loss; Singapore bunkering business remains
Related: NewOcean Energy publishes profit warning to shareholders ahead of 1H 2020 results
Related: NewOcean Energy records 66% bunker sales jump to 4.5 million mt in FY 2019


Photo credit: NewOcean Energy Holdings
Published: 29 June, 2021

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