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Latest Financial Announcement

FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2018

Financials Archive

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Income Statement

Balance Sheet

Review of Performance

Statement of Comprehensive Income Review

Revenue

Revenue increased by $14.2 million or 105.4% from $13.4 million in 2QFY2017 to $27.6 million in 2QFY2018. The increase was mainly due to increase in revenue from customers in the Energy Sector, partly offset by a decrease in revenue from Marine and Trading Sectors. The same reason accounted for the year on year increase in revenue of $17.9 million or 63.1% from $28.2 million in 1HY2017 to $46.1 million in 1HY2018. Revenue from Energy Sector had increased by $20.3 million or 116.3% from $17.5 million in 1HY2017 to $37.8 million in 1HY2018. On the other hand, revenue from Marine Sector had decreased by $1.5 million or 44.6% from $3.3 million in 1HY2017 to $1.8 million in 1HY2018 and revenue from Trading Sector had decreased by $1.8 million or 25.6% from $7.0 million in 1HY2017 to $5.2 million in 1HY2018.

Geographically, year on year, revenue had increased in all markets with the exception of Indonesia, Middle East and Europe. Japan was the main contributor at 32.0% of the revenue generated in 1HY2018 (1HY2017: Singapore).

Gross Profit and Gross Profit Margin

In tandem to the increase in revenue, gross profit had increased by $1.8 million or 77.3% from $2.2 million in 2QFY2017 to $4.0 million in 2QFY2018. Gross profit margin decreased by 2.3 percentage point from 16.7% in 2QFY2017 to 14.4% in 2QFY2018 due to margin pressure from the market. Likewise, year on year, gross profit had increased by $0.9 million or 15.7% from $5.7 million in 1HY2017 to $6.6 million in 1HY2018 while gross profit margin had decreased by 5.9 percentage points from 20.2% in 1HY2017 to 14.3% in 1HY2018.

Financial Income and Expense

Financial income had decreased by $2 thousand and $9 thousand quarter on quarter and year on year respectively from interest earned on fixed deposits.

Financial expense remained relatively stable at $0.1 million and $0.2 million quarter on quarter and year on year respectively from interest paid on borrowings.

Operating Expenses

Distribution costs had decreased by $0.2 million or 9.4% from $1.4 million in 2QFY2017 to $1.2 million in 2QFY2018 mainly from decrease in employee benefits expenses. Year on year, distribution costs had decreased by $0.5 million or 14.6% from $2.9 million in 1HY2017 to $2.4 million in 1HY2018 mainly from decreases in entertainment expense and employee benefits expenses.

Administrative expenses had decreased by $0.3 million or 17.4% from $1.8 million in 2QFY2017 to $1.5 million in 2QFY2018 mainly from lower employee benefits expenses. The decrease had resulted from lower employee benefits expenses which also accounted for the year on year decrease in administrative costs of $0.6 million or 17.3% from $3.5 million in 1HY2017 to $2.9 million in 1HY2018.

Depreciation expense had decreased by $0.1 million or 7.5% from $1.5 million in 2QFY2017 to $1.4 million in 2QFY2018 mainly from lower depreciation on properties, which also resulted in the year on year decrease of $0.3 million or 7.3% from $3.1 million in 1HY2017 to $2.8 million in 1HY2018.

Other Credits /(Charges)

Other charges had decreased by $1.8 million or 147.3% from a charge of $1.2 million in 2QFY2017 to a credit of $0.6 million in 2QFY2018 mainly from reversal on provision for slow moving inventories, partly offset with foreign exchange loss. Year on year, other charges had decreased by $0.2 million or 30.1% from $0.7 million in 1HY2017 to $0.5 million in 1HY2018 mainly due to lower provision for slow moving inventories.

Profit /(Loss) Before Income Tax

Quarter on quarter, there was a profit of $0.3 million in 2QFY2018 as compared to a loss of $3.7 million in 2QFY2017. Year on year, the resulting loss due to the aforementioned reasons was $2.4 million in 1HY2018 as compared to a loss before income tax of $4.7 million in 1HY2017.

Other Comprehensive Income/ (Loss)

Other comprehensive loss had decreased by $36 thousand or 150.0%, quarter on quarter. Year on year, other comprehensive loss had decreased by $109 thousand or 173.0%. The decrease in other comprehensive loss was from exchange differences on translating foreign operations.

Statement of Financial Position Review

Non-Current Assets

Non-current assets had increased by $3.2 million or 13.1% from $24.3 million as at 30 September 2017 to $27.5 million as at 31 March 2018 mainly due to the construction costs of warehouse located at 90 Second Lok Yang Road, offset by depreciation charged in the current financial period.

Current Assets

Current assets had decreased by $2.2 million or 1.8% from $119.3 million as at 30 September 2017 to $117.1 million as at 31 March 2018. The decrease was mainly due to decrease in cash and cash equivalents, partly offset with increase in trade and other receivables. Trade and other receivables increased by $7.7 million or 28.4% from $27.0 million as at 30 September 2017 to $34.7 million as at 31 March 2018. Meanwhile, cash and cash equivalents had decreased by $10.3 million or 48.2% from $21.3 million as at 30 September 2017 to $11.0 million as at 31 March 2018.

Non-Current Liabilities

Non-current liabilities had decreased by $0.7 million or 23.2% from $2.9 million as at 30 September 2017 to $2.2 million as at 31 March 2018 from repayment of bank borrowings.

Current Liabilities

Current liabilities had increased by $4.0 million or 10.8% from $37.1 million as at 30 September 2017 to $41.1 million as at 31 March 2018, mainly due to increase in trade and other payables. Trade and other payables had increased by $5.8 million or 111.7% from $5.2 million as at 30 September 2017 to $11.0 million as at 31 March 2018. Other financial liabilities, which consist of short-term borrowings and current portion of long-term borrowings and finance leases, had decreased by $1.3 million or 4.4% from $30.6 million as at 30 September 2017 to $29.3 million as at 31 March 2018.

Equity

Total equity decreased by $2.3 million or 2.2% from $103.6 million as at 30 September 2017 to $101.3 million as at 31 March 2018 mainly from the loss incurred in 1HY2018.

Statement of Cash Flows Review

Cash Flows (Used in) /From Operating Activities

Cash from operating activities had decreased by $9.3 million from and inflow of $0.3 million in 2QFY2017 to an outflow of $9.0 million mainly from the working capital changes. Year on year, cash used in operating activities had increased by $8.6 million from $0.1 million in 1HY2017 to $8.7 million in 1HY2018 as per the reason contributing to the quarter on quarter decrease.

Cash Flows Used In Investing Activities

Cash used in investing activities had increased by $2.8 million from $0.2 million in 2QFY2017 to $3.0 million in 2QFY2018 mainly from the capital expenditure in 2QFY2018. Year on year, cash used in investing activities had increased by $6.1 million from $0.2 million in 1HY2017 to $6.3 million in 1HY2018 as per the reason contributing to the quarter on quarter decrease.

Cash Flows From/ (Used In) Financing Activities

Cash used in financing activities had decreased by $6.0 million from an outflow of $2.1 million in 2QFY2017 to an inflow of $3.9 million in 2QFY2018 mainly from increase in new bank borrowings. Similarly, year on year, cash used in financing activities had decreased by $10.0 million from an outflow of $5.2 million in 1HY2017 to an inflow of $4.8 million in 1HY2018 as per the reason contributing to the quarter on quarter decrease.

Commentary

We expect generation of revenue to remain challenging with the volatility of the oil market despite the slow recovery of the economic momentum. Gross profit margin is also expected to continue to come under pressure due to the competitive conditions, which is likely to result in a continuing loss for the period up to 3QFY2018. We are actively sourcing for suitable opportunities for growth and remain cautious in our outlook for the rest of the financial year.