Losses at water treatment firm Dayen Environmental have ballooned to $14.33 million for theyear ended Sept 30, compared to a loss of $6.15 million the previous year because of problemswith its Indonesian coal mining venture and higher costs. Loss per share widened to 7.53 centsthis year from 3.82 cents last year. But the company, which released its results in a statementlate last Friday, said it is cautiously optimistic it can get more projects because governmentinvestments in infrastructure projects will continue in trying times. 'In addition, with commodityprices coming down in the economic downturn, we could expect raw material costs to fall, andthis in turn may translate into lower construction costs and thus, lower operating costs,' it said.

As at Sept 30, the group had an order book of about $43.5 million. 'The order book is expected tocontribute positively to the group's results, barring unforeseen circumstances,' it added. For theyear under review, Dayen said revenue dipped 6 per cent to $29.5 million from $31.4 millionpreviously. Impairment losses of $7.4 million were due to the impairment of its investment inIndonesia's PT ATPK Resources TBk as well as its mining rights from PT Modal InvestasiMineral. Higher material and labour costs for a design-and-build water treatment project inCambodia that the group was awarded two years ago contributed to project losses of $3.6million, which also includes provision for expected additional costs to complete the project.

Expenses for administrative and operating activities and finance costs rose $3.9 million due toefforts to develop new businesses, investments in human capital and professional costs. Thegroup said that the global economic slowdown and credit crunch have created a challengingbusiness environment. 'However, it is during such a downturn that we expect the government toincrease its spending on infrastructure projects to stimulate the economy. With the municipalityas our major client and given our track record, we are cautiously optimistic of securing more localprojects,' the group said. Falling commodity prices could also result in cheaper raw materials,which will translate into lower construction and operating costs.

The group also said its ventures in China and the Middle East have been making good progress.Its wastewater treatment plant project in Diao Bing Shan is expected to generate a steady streamof revenue, and the group is also working on other projects in China. In Oman, the group securedtwo new contracts worth US$1.13 million for the construction of a new sewage treatment plantand the upgrading of an industrial sewage treatment plant. These are expected to contribute tothe group's revenue in the coming year.