Singapore’s Technologies Engineering is recording a S$61 million one-off charge for the third quarter, the company said on Tuesday.
The charges are being marked down in face of the proposed closure of its joint-venture project in China that is involved in the road construction equipment business.
ST Engg said on Tuesday the joint venture firm, Jiangsu Huatong Kinetics and Jiangsu Huaran Kinetics, known as JHK, is halting production to reduce its operating losses.
JHK is the joint venture between ST Kinetics and China’s state-owned enterprise Jiangsu Huatong Machinery (JHM).
ST Engineering said the decision to halt production followed “months of engagement between the two shareholders to evaluate various courses of actions for JHK”
“In light of the likely scenario that production will cease at the end of the 15-day period, ST Kinetics will record a one-off charge of about $61m for the third quarter ended 30 September 2016 (3Q2016). This charge consists of an impairment of ST Kinetics’ net carrying value in JHK and closure costs including staff compensation,” the company said in a statement.
Meanwhile, ST Engineering announced on Tuesday its ST Electronics, its electronics arm, has won contracts worth $480m in the third quarter. A day earlier, the company said its areospace subsidiary secured new contracts worth $520m in the third quarter.
ST Engineering has maintained its revenue guidance for FY2016. The guidance was for higher revenue and lower profit before tax for FY2016 compared to FY2015, barring unforeseen circumstances, the company said.