Stratech reports Interim net loss of S$1.89m on lower turn over

Stratech Systems Limited ("Stratech"), an IT systems and technology developer, and e-business enabler providing e-business applications and services, today reported a net loss of S$1.89 million on lower turnover of S$1.39 million for the interim period ended June 30, 2000.

The 41 percent drop in turnover is due to lower progressive billings, as the agreed stage of progress billings for on-going contracts such as the COE open bidding system contract and the National University of Singapore SmartPark contract, fall outside the six months ended June 30, 2000.

Correspondingly, for 1H2000, Stratech recorded a loss after tax of S$1.89 million as compared to a profit after tax of S$440,000 for the same period in the previous year.

During the period under review, the group suffered lower gross margins.  This is because the projects undertaken in 1H2000 carried a higher percentage of those in the "maintenance" stage as compared to a majority of projects recorded under the "software development" stage in 1H1999, which commanded a higher premium.

In addition, the Group's loss was due partially to an increase in its operating expenses of 137.5% to S$3.23 million, from S$1.36 million in the same period last year.  The operating expenses increased as a result of a rise in R & D activities, strengthening of the senior management team, amortisation expenses from the medical claims proration system and vehicle entry permit system, depreciation expenses in line with the increase in fixed assets, legal expenses related to the Group's filing of patent applications and other expenses.

"Our increased operating expenses mirror our technological developments and expansion plans.  To help propel us into the global arena, we now have a core team of 17 senior management executives, all of whom are bringing a wealth of technological and international experience to enhance Stratech's core competence," said Dr David Chew, Chairman and Chief Executive of Stratech.