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Statement of Comprehensive Income Review
Revenue decreased by $2.3 million or 13.6% from $17.1 million in 1QFY2016 to $14.8 million in 1QFY2017. The decrease was mainly due to decrease in revenue from customers in the Marine Sector, partly offset by an increase in revenue from Trading Sector. Revenue from Marine Sector had decreased by $4.2 million or 74.7% from $5.6 million in 1QFY2016 to $1.4 million in 1QFY2017. Meanwhile, revenue from Trading Sector had increased by $2.4 million or 285.9% from $0.8 million in 1QFY2016 to $3.2 million in 1QFY2017.
Geographically, despite being the main contributor at 38.2% of the revenue generated in 1QFY2017, the Singapore market saw the largest decline in revenue by $5.8 million or 50.8% from $11.5 million in 1QFY2016 to $5.7 million in 1QFY2017. Meanwhile, revenue from Middle East, Europe and Japan increased by $5.2 million or 682.0% from $0.8 million in 1QFY2016 to $6.0 million in 1QFY2017.
Gross Profit and Gross Profit Margin
Despite the decrease in revenue, gross profit margin increased by 4.1 percentage point from 19.3% in 1QFY2016 to 23.4% in 1QFY2017 due to lower cost of sales. Gross profit increased by $0.2 million or 4.8% from $3.3 million in 1QFY2016 to $3.5 million in 1QFY2017.
Financial Income and Expense
Financial income in 1QFY2017 increased by $8 thousand from interest earned on fixed deposits. Financial expense decreased by $0.1 million or 49.0% from $0.2 million in 1QFY2016 to $0.1 million in 1QFY2017 mainly due to lower interest paid on reduced borrowings.
In tandem with the decrease in revenue, distribution costs had decreased by $0.2 million or 9.7% from $1.7 million in 1QFY2016 to $1.5 million in 1QFY2017.
Administrative expenses remained relatively stable at $1.7 million in both 1QFY2016 and 1QFY2017 due to fixed overheads.
Depreciation expense had increased by $0.1 million or 12.4% from $1.4 million in 1QFY2016 to $1.5 million in 1QFY2017 mainly from higher depreciation on properties.
Other credits had increased by $0.6 million from a charge of $0.1 million in 1QFY2016 to a credit of $0.5 million in 1QFY2017 mainly due to foreign exchange currency gains.
Loss Before Income Tax
Loss before tax had decreased by $0.9 million or 48.4% from $1.8 million in 1QFY2016 to $0.9 million in 1QFY2017 due to the reasons as aforementioned.
Other Comprehensive Loss
Other comprehensive loss had increased by $29 thousand or 290.0% from exchange differences on translating foreign operations.
Statement of Financial Position Review
Non-current assets had decreased by $2.9 million or 9.5% from $30.6 million as at 30 September 2016 to $27.7 million as at 31 December 2016 mainly due to depreciation charged in the current financial period and decrease in non-current portion of trade and other receivables.
Current assets had increased by $1.5 million or 1.3% from $114.7 million as at 30 September 2016 to $116.2 million as at 31 December 2016. The increase was mainly due to an increase in trade and other receivables. Trade and other receivables increased by $5.4 million or 32.4% from $16.8 million as at 30 September 2016 to $22.2 million as at 31 December 2016. Conversely, cash and cash equivalent had decreased by $3.5 million or 20.7% from $17.1 million as at 30 September 2016 to $13.6 million as at 31 December 2016.
Non-current liabilities remained relatively stable at $5.5 million as at 31 December 2016 as compared to $5.7 million as at 30 September 2016.
Similarly, current liabilities remained relatively stable at $24.2 million as at 31 December 2016 as compared to $24.4 million as at 30 September 2016. Trade and other payables had increased by $0.4 million or 4.6% from $8.8 million as at 30 September 2016 to $9.2 million as at 31 December 2016. Other financial liabilities, which consist of short-term borrowings and current portion of long-term borrowings and finance leases, had decreased by $0.6 million or 4.3% from $15.4 million as at 30 September 2016 to $14.8 million as at 31 December 2016.
Total equity decreased by $1.0 million or 0.86% from $115.2 million as at 30 September 2016 to $114.2 million as at 31 December 2016 mainly from the loss incurred in 1QFY2017.
Statement of Cash Flows Review
Cash Flows Used in Operating Activities
Cash used in operating activities had decreased by $1.5 million from $1.9 million in 1QFY2016 to $0.4 million in 1QFY2017 mainly due to increase in bills payable and decrease in customers' receipts.
Cash Flows From/(Used In) Investing Activities
Cash used in investing activities had decreased by $0.4 million from an outflow of $0.4 million in 1QFY2016 to an inflow of $10 thousand in 1QFY2017 due to minimal capital expenditure for the financial period and the receipts from the disposal of plant and equipment and the insurance surrender payment.
Cash Flows Used In Financing Activities
Cash from financing activities had increased by $1.7 million from $1.4 million in 1QFY2016 to $3.1 million in 1QFY2017 from the repayment of bank borrowings.
We expect the weak demand from the energy industry to continue affecting our ability in generating sufficient revenue to cover our fixed operating costs, thereby may result in a continuing loss for 1HY2017.
We will continue to manage our cost more effectively and continue to actively identify new potential markets and suitable opportunities for growth to attempt to mitigate the adverse financial performance in FY2017.