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Latest Financial Announcement

FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE FINANCIAL PERIOD ENDED 31 MARCH 2017

Financials Archive

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Income Statement

Balance Sheet

Review of Performance

Statement of Comprehensive Income Review

Revenue

Revenue decreased by $8.2 million or 37.9% from $21.6 million in 2QFY2016 to $13.4 million in 2QFY2017. The decrease was mainly due to decrease in revenue from customers in the Energy and Marine Sectors, partly offset by an increase in revenue from Trading Sector. The same reason accounted for the year on year decrease in revenue of $10.6 million or 27.1% from $38.8 million in 1HY2016 to $28.2 million in 1HY2017. Revenue from Energy Sector had decreased by $4.6 million or 21.1% from $22.1 million in 1HY2016 to $17.5 million in 1HY2017. Meanwhile, revenue from Marine Sector had decreased by $9.9 million or 75.3% from $13.2 million in 1HY2016 to $3.3 million in 1HY2017. On the other hand, revenue from Trading Sector had increased by $4.3 million or 157.6% from $2.7 million in 1HY2016 to $7.0 million in 1HY2017.

Geographically, revenue had increased in all markets with the exception of Singapore, Malaysia, Vietnam and Brunei, quarter on quarter and year on year. Despite the decrease in revenue, Singapore is the main contributor at 44.7% of the revenue generated in 1HY2017.

Gross Profit and Gross Profit Margin

In tandem to the decrease in revenue, gross profit had decreased by $2.7 million or 53.8% from $4.9 million in 2QFY2016 to $2.2 million in 2QFY2017. Gross profit margin decreased by 5.7 percentage point from 22.4% in 2QFY2016 to 16.7% in 2QFY2017 due to margin pressure from the market. Likewise, year on year, gross profit had decreased by $2.5 million or 30.1% from $8.2 million in 1HY2016 to $5.7 million in 1HY2017 while gross profit margin had decreased by 0.8 percentage points from 21.0% in 1HY2016 to 20.2% in 1HY2017.

Financial Income and Expense

Financial income had increased marginally by $1 thousand and $9 thousand quarter on quarter and year on year respectively from interest earned on fixed deposits.

On the other hand, financial expense had decreased by $0.1 million from $0.2 million in 2QFY2016 to $0.1 million in 2QFY2017 mainly due to lower interest paid on reduced borrowings. Similarly, financial expense had decreased by $0.2 million from $0.4 million in 1HY2016 to $0.2 million in 1HY2017 as per the reason contributing to the quarter on quarter decline.

Operating Expenses

Distribution costs had decreased by $0.2 million or 12.8% from $1.6 million in 2QFY2016 to $1.4 million in 2QFY2017 mainly from decreases in entertainment expenses and employee benefits expenses. Year on year, distribution costs had decreased by $0.3 million or 11.2% from $3.2 million in 1HY2016 to $2.9 million in 1HY2017 as per the reason contributing to the quarter on quarter decline.

Administrative expenses had decreased by $0.2 million or 9.9% from $2.0 million in 2QFY2016 to $1.8 million in 2QFY2017 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 $0.2 million or 4.6% from $3.7 million in 1HY2016 to $3.5 million in 1HY2017.

Depreciation expense had increased by $0.1 million or 12.1% from $1.4 million in 2QFY2016 to $1.5 million in 2QFY2017 mainly from higher depreciation on properties which also resulted in the year on year increase of $0.4 million or 12.3% from $2.7 million in 1HY2016 to $3.1 million in 1HY2017.

Other (Charges)/Credits

Other charges had increased by $3.0 million or 165.4% from a credit of $1.8 million in 2QFY2016 to a charge of $1.2 million in 2QFY2017 mainly from provision for slow moving inventories and foreign exchange loss. Year on year, other charges had increased by $2.4 million or 144.1% from a credit of $1.7 million in 1HY2016 to a charge of $0.7 million in 1HY2017 mainly from provision for slow moving inventories.

Loss Before Income Tax

Loss before income tax had increased by $5.3 million or 337.0% from a profit of $1.6 million in 2QFY016 to a loss of $3.7 million in 2QFY2017. Year on year, loss before income tax had increased by $4.4 million or 1,746.9% from $0.3 million in 1HY2016 to $4.7 million in 1HY2017 due to reasons as aforementioned.

Other Comprehensive Loss

Other comprehensive loss had decreased by $9 thousand or 27.3%, quarter on quarter. Year on year, other comprehensive loss had increased by $20 thousand or 46.5%. The decrease and increase in other comprehensive loss mainly from exchange differences on translating foreign operations.

Statement of Financial Position Review

Non-Current Assets

Non-current assets had decreased by $4.5 million or 14.8% from $30.6 million as at 30 September 2016 to $26.1 million as at 31 March 2017 mainly due to depreciation charged in the current financial period and decrease in non-current portion of trade and other receivables.

Current Assets

Current assets had decreased by $4.1 million or 3.6% from $114.7 million as at 30 September 2016 to $110.6 million as at 31 March 2017. The decrease was mainly due to decrease in inventories and cash and cash equivalents. The decrease was partially offset by the increase in trade and other receivables. Inventories had decreased by $3.2 million or 4.1% from $78.8 million as at 30 September 2016 to $75.6 million as at 31 March 2017. Cash and cash equivalents had decreased by $5.5 million or 32.0% from $17.1 million as at 30 September 2016 to $11.6 million as at 31 March 2017. Conversely, trade and other receivables increased by $4.7 million or 28.2% from $16.8 million as at 30 September 2016 to $21.5 million as at 31 March 2017.

Non-Current Liabilities

Non-current liabilities had decreased by $0.5 million or 8.9% from $5.7 million as at 30 September 2016 to $5.2 million as at 31 March 2017 from repayment of bank borrowings.

Current Liabilities

Current liabilities had decreased by $1.9 million or 7.8% from $24.4 million as at 30 September 2016 to $22.5 million as at 31 March 2017 from repayment of bank borrowings. Trade and other payables had increased by $1.8 million or 20.3% from $8.8 million as at 30 September 2016 to $10.6 million as at 31 March 2017. Other financial liabilities, which consist of short-term borrowings and current portion of long-term borrowings and finance leases had decreased by $3.8 million or 24.8% from $15.4 million as at 30 September 2016 to $11.6 million as at 31 March 2017.

Equity

Total equity decreased by $6.2 million or 5.4% from $115.2 million as at 30 September 2016 to $109.0 million as at 31 March 2017 mainly from the loss incurred in 1HY2017 and dividends paid of $1.5 million.

Statement of Cash Flows Review

Cash Flows From/(Used in) Operating Activities

Cash from operating activities had decreased by $4.3 million from $4.6 million in 2QFY2016 to $0.3 million in 2QFY2017 mainly from the operating loss and the working capital changes. Year on year, cash used in operating activities had increased by $2.8 million from an inflow of $2.7 million in 1HY2016 to an outflow of $0.1 million in 1HY2017 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 $158 thousand from $9 thousand in 2QFY2016 to $167 thousand in 2QFY2017 mainly from the capital expenditure in 2QFY2017. Year on year, cash used in investing activities had decreased by $0.2 million from $0.4 million in 1HY2016 to $0.2 million in 1HY2017 due to lower capital expenditure in the first half of the current financial year.

Cash Flows Used In Financing Activities

Cash used in financing activities had decreased by $4.1 million from $6.2 million in 2QFY2016 to $2.1 million in 2QFY2017 mainly from the deduction in repayment of bank borrowings. Similarly, year on year, cash used in financing activities had decreased by $2.4 million from $7.6 million in 1HY2016 to $5.2 million in 1HY2017 as per the reason contributing to the quarter on quarter decrease.

Commentary

In view of the continuing weak demand from the energy industry which affects our ability in generating sufficient revenue to cover fixed operating costs and margin pressure, we expect continuing loss for third quarter ending 30 June 2017.

Our gross profit margin will continue to erode due to margin pressure from the challenging market condition.

In order to lessen the impact of adverse financial performance in FY2017, we will continue to manage our cost effectively and actively identify new potential markets and suitable opportunities for growth.