SHARES of multinational oil exploration and production company Rex International fell on Friday (Feb 21) morning in heavy trading after the company said it was expecting to post a net loss in the upcoming release of its financial results.
After midday trading break at 1.40 pm, its shares dived to an intraday low of S$0.168, down by S$0.047 or 21.9 per cent, with around 61 million shares changing hands. The last time it traded at such levels was in January 2024.
On Thursday, the company said it was expecting to report a net loss for the financial year ended December 2024 based on a preliminary review of its drafted unaudited financial results. It previously registered net losses for FY2023 and FY2022.
The expected losses are “mainly due to non-cash items related to impairment of goodwill, oil and gas properties and exploration and evaluation assets,” the company said.
It added that it was “still in the process of finalising the impairment assessment over its oil and gas properties and its results for FY2024” and warned investors to “exercise caution” when dealing with shares.
Its unaudited financial results for FY2024 are expected to be released on or before Mar 1, 2025.
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Rex International shares closed lower on Thursday at S$0.215, down by S$0.005 or 2.3 per cent.
In the red for past two years
The company was last profitable in FY2021, where it posted a net profit of US$67.2 million for the full year. It then reversed into the red, with a net loss of US$1 million for FY2022 and US$63.9 million for FY2023.
The company had previously said that it had faced unforeseen operational issues, as well as increased production and operating expenses in 2022 – the year it sank into the red.
This performance comes despite the company ranking among the fastest growing Singapore firms based on revenue growth for three consecutive years.
In recent years, it made moves to diversify from its core oil business with investments into medical technology and drone-making, citing a need to do so for survival with fossil fuels losing favour amid environmental concerns.
However, its diversification moves drew misgivings from investors who raised concerns about the profitability of its investments in the non-oil businesses.
