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First Quarter Financial Statement And Dividend Announcement

Financials Archive

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  Group
  1QFY2017
S$'000
1QFY2016
S$'000
Increase/ (Decrease)
%
Revenue 34,389 33,098 4
Cost of Sales (26,899) (25,120) 7
Gross Profit 7,490 7,978 (6)
Other income 11 30 (63)
Other gains/(loss) - net 2,379 (567) NM
Expenses      
- Administrative (416) (438) (5)
- Other operating (6,246) (10,872) (43)
- Finance (1,006) (875) 15
Share of loss of associated companies (114) (7) 1529
Share of loss of a joint venture (14) (42) (67)
Profit/(Loss) before income tax 2,084 (4,793) NM
Income tax expense (668) (250) 167
Total profit/(loss) 1,416 (5,043) NM
Other comprehensive loss:      
Items that may be subsequently reclassified to profit or loss:      
Currency translation differences arising from consolidation - losses (94) (1,202) (92)
Fair value losses on cash flow hedges (16) (72) (78)
  (110) (1,274) (91)
       
Total comprehensive income/(loss) 1,306 (6,317) NM
Profit/(Loss) attributable to:      
Equity holders of the Company 1,504 (3,610) NM
Non-controlling interest (88) (1,433) (94)
  1,416 (5,043) NM
Total comprehensive (loss)/income attributable to:      
Equity holders of the Company 1,408 (4,884) NM
Non-controlling interest (102) (1,433) (93)
  1,306 (6,317) NM
Denotes: NM - not meaningful

Notes to the statement of comprehensive income

  Group
  1QFY2017
S$'000
1QFY2016
S$'000
Increase/ (Decrease)
%
Profit/(loss) after income tax was stated after (charging)/crediting:-
Depreciation of property, plant and equipment (7,812) (7,705) 1
Currency exchange gain/(loss) - net 499 (807) NM
Gain on disposal of property, plant and equipment 1,281 28 4475
Gain on disposal of a subsidiary 322 - NM
Fair value gain/(loss) on financial assets at fair value through profit or loss 23 (101) NM
Impairment loss on trade receivables (18) (4,900) (100)
Write-back of impairment loss on trade receivables 136 200 (32)
Interest income 11 30 (63)
Interest expense (967) (673) 44
Over provision in prior years' current income tax - 166 (100)
Over/(under) provision in prior years' deferred tax 14 (62) NM
Denotes: NM - not meaningful

Balance Sheet

  Group
  As at
30/09/2016
S$'000
As at
30/06/2016
S$'000
ASSETS    
Current assets    
Cash and cash equivalents 18,515 14,258
Financial assets at fair value through profit or loss 422 399
Trade and other receivables 55,388 53,927
Tax recoverable 113 110
Inventories 2,046 1,425
Other current assets 3,063 2,203
  79,547 72,322
Assets of disposal group classified as held for sale - 1,265
  79,547 73,587
Non-current assets    
Other assets 114 114
Other receivables - -
Investment in associated companies 3,440 3,531
Investment in a joint venture 2,071 2,059
Investment in subsidiaries - -
Property, plant and equipment 389,199 393,571
Deferred income tax assets 155 134
  394,979 399,409
Total assets 474,526 472,996
     
LIABILITIES    
Current liabilities    
Trade and other payables 54,542 48,812
Current income tax liabilities 1,781 1,455
Borrowings 29,858 30,642
Derivative financial instruments 20 12
  86,201 80,921
     
Liabilities directly associated with disposal    
group classified as held for sale - 5,492
  86,201 86,413
Non-current liabilities    
Borrowings 102,326 105,339
Derivative financial instruments 18 10
Deferred income tax liabilities 26,460 26,376
  128,804 131,725
Total liabilities 215,005 218,138
NET ASSETS 259,521 254,858
     
EQUITY    
Capital and reserves attributable to equity holders of the Company    
Share capital 87,340 887,340
Other reserves (3,741) (3,645)
Retained earnings 174,881 173,377
  258,480 257,072
Non-controlling interest 1,041 (2,214)
Total equity 259,521 254,858

Review on Group's Financial Results

3 Months ended 30 September 2016 (1QFY2017) vs 3 Months ended 30 September 2015 (1QFY2016)

Revenue 1QFY2017
S$'000
1QFY2016
S$'000
Increase/ (Decrease)
%
Heavy Lift and Haulage 27,415 31,056 (12)
Marine Transportation 856 1,065 (20)
Engineering Services 5,646 907 522
Trading 472 70 574
  34,389 33,098 4

Revenue was S$34.4 million in 1QFY2017, an increase of S$1.3 million or 4% from S$33.1 million in 1QFY2016. The increase was mainly attributed to the increase in contributions from Engineering Services and Trading segments.

Heavy Lift and Haulage segment revenue decreased by S$3.7 million or 12% from S$31.1 million to S$27.4 million, mainly due to fewer projects executed in India and Thailand.

Marine Transportation segment revenue decreased by S$0.2 million or 20% from S$1.1 million to S$0.9 million, mainly due to fewer chartering jobs secured as a result of the downturn in the marine and offshore industry.

Engineering Services segment revenue increased by S$4.7 million or 522% from S$0.9 million to S$5.6 million, mainly due to an increase in progress from a project in the Middle East.

Trading segment revenue increased by S$0.4 million or 574% from S$0.1 million to S$0.5 million, mainly due to a crane sold in 1QFY2017.

Gross Profit was S$7.5 million in 1QFY2017, a decrease of S$0.5 million or 6% from S$8.0 million in 1QFY2016. Gross Profit Margin was also lower at 22% in 1QFY2017 as compared to 24% in 1QFY2016. This was mainly due to higher costs incurred for an Engineering Services project.

Other Gains/(Loss)-net recorded a gain of S$2.4 million in 1QFY2017 as compared to a loss of S$0.6 million in 1QFY2016. This was mainly attributable to gain on disposal of plant and equipment of S$1.3 million, operational exchange gain of S$0.5 million and gain from the disposal of a subsidiary of S$0.3 million in 1QFY2017, as compared to operational exchange loss of S$0.6 million which was offset by a marginal gain on disposal of plant and equipment of S$0.03 million in 1QFY2016.

Other Operating Expenses were S$6.2 million in 1QFY2017, a decrease of S$4.7 million or 43% from S$10.9 million in 1QFY2016. This was mainly due to a lower impairment loss on trade receivables of S$0.02 million in 1QFY2017 as compared to S$4.9 million in 1QFY2016.

Finance Expenses were S$1.0 million in 1QFY2017, an increase of S$0.1 million or 15% from S$0.9 million in 1QFY2016. This was mainly due to higher interest expense of S$1.0 million in 1QFY2017 as compared to S$0.7 million in 1QFY2016. However, the increase in interest expense was offset by higher currency translation loss of S$0.2 million relating to foreign currency denominated borrowings in 1QFY2016 as compared to S$0.04 million in 1QFY2017.

Profit/(Loss) before Income Tax 1QFY2017
S$'000
1QFY2016
S$'000
Increase/ (Decrease)
%
Heavy Lift and Haulage 3,055 1,672 83
Marine Transportation (170) (2,495) (93)
Engineering (964) (4,007) (76)
Trading 163 37 341
  2,084 (4,793) NM

Loss before Income Tax was S$2.1 million in 1QFY2017 as compared to a loss before income tax of S$4.8 million in 1QFY2016.

Profit before income tax from Heavy Lift and Haulage segment increased by S$1.4 million or 83%, from S$1.7 million in 1QFY2016 to S$3.1 million in 1QFY2017. The increase was mainly due to operational exchange gain of S$0.5 million in 1QFY2017 as compared to operational exchange loss of S$0.6 million and impairment loss on trade receivables of S$0.8 million in 1QFY2016.

Loss before income tax from Marine Transportation segment decreased by S$2.3 million or 93%, from S$2.5 million in 1QFY2016 to S$0.2 million in 1QFY2017. This was mainly due to gain on disposal of plant and equipment of S$0.9 million which was offset by a lower impairment loss on trade receivables of S$0.02 million in 1QFY2017 as compared to impairment loss on trade receivables of S$1.1 million in 1QFY2016.

Loss before income tax from Engineering Services segment decreased by S$3.0 million or 76% from S$4.0 million in 1QFY2016 to S$1.0 million in 1QFY2017, due to impairment loss on trade receivable of S$3.0 million in 1QFY2016.

Profit before income tax from Trading segment increased by S$0.1 million or 341% from S$0.04 million in 1QFY2016 to S$0.2 million in 1QFY2017, mainly due to sale of a crane in 1QFY2017.

Review of Statements of Financial Position and Cash Flows

Cash and cash equivalents per consolidated statement of cash flow increased by S$4.2 million from S$11.2 million as at 30 June 2016 to S$15.4 million as at 30 September 2016 mainly due to net cash inflow from operating activities and investing activities of S$11.1 million and S$0.3 million respectively. This was offset by the net cash outflow from financing activities of S$7.2 million.

As a result of the improved cash and financial position of the Group, the Group's net current liabilities position of S$7.3 million as at 30 June 2016 was reduced to S$6.7 million as at 30 September 2016. The Group had sufficient undrawn financing facilities committed from large reputable financial institutions to meet its commitments as well as to repay debts as and when they fall due for the next twelve months from 30 September 2016.

Inventories increased by S$0.6 million from S$1.4 million as at 30 June 2016 to S$2.0 million as at 30 September 2016 mainly due to the purchase of equipment in 1QFY2017.

Other current assets increased by S$0.9 million from S$2.2 million as at 30 June 2016 to S$3.1 million as at 30 September 2016 mainly due to the increase in prepayments for insurance premium.

Trade and other payables increased by S$5.7 million from S$48.8 million as at 30 June 2016 to S$54.5 million as at 30 September 2016. The increase was mainly attributable to amounts payable for the construction of workers' dormitory at No.15 Pandan Crescent; and amounts due to suppliers for Engineering Services project in the Middle East.

Current income tax liabilities increased by S$0.3 million from S$1.5 million as at 30 June 2016 to S$1.8 million as at 30 September 2016 mainly due to provision for income tax for current period.

Total borrowings decreased by S$3.8 million from S$136.0 million as at 30 June 2016 to S$132.2 million as at 30 September 2016 mainly due to repayments made during the current period.

Commentary On Current Year Prospects

The operating environment continues to be challenging and competitive amid the slowdown in demand in the key markets we operate in. The Group expects that the on-going public sector infrastructure development in Singapore will support the impetus for heavy lift and haulage services.

Meanwhile, the Group will continue to effectively manage operating costs and business risks to remain competitive. It will also continue to explore strategic collaborations and leverage on its capabilities and track record as a one-stop integrated heavy lift specialist and service provider to target complex and high value projects to grow the business.