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The Group's revenue of $64.7 million for the financial year ended 30 June 2018 ("FY2018") increased by $6.6 million or 11.3%, from $58.1 million for the financial year ended 30 June 2017 ("FY2017").
Revenue contribution from the Marine & Offshore Segment declined by $0.5 million or 1.0% to $47.5 million in FY2018 as compared to $48.0 million in FY2017. Revenue contribution from the Group's engineering and water treatment businesses declined by $2.9 million, as these businesses faced the negative impact of crude oil prices on customers in the offshore oil & gas industry. However, this decline was offset largely by an increase of $2.4 million or 6.1% in contribution from the Group's mooring and rigging business.
Revenue contribution from the Property Development Segment increased by $7.1 million or 70.9%, from $10.1 million in FY2017 to $17.2 million in FY2018. The increase was mainly due to revenue contribution from the sale of the completed Elite Terrace development project, which was recognised on a percentage-of-completion basis. All remaining units of the project have been sold during the year.
Revenue from the Singapore Segment remained the highest geographical segment, at 64.5% of the Group's revenue in FY2018, a 1.1-percentage-point decline from 65.6% in FY2017.
The Group's gross profit of $16.2 million in FY2018 increased by $2.8 million or 21.1% from $13.4 million in FY2017. The Group's gross profit margin in FY2018 increased by 2.0 percentage points to 25.0% as compared to 23.0% in FY2017.
Other income of $3.5 million in FY2018 increased by $2.3 million or 179.6% from $1.2 million in FY2017 mainly due in part to the global settlement (the "Settlement") in January 2018 between the Group and the two vendors of TIEC Holdings Pte. Ltd., a wholly-owned subsidiary of the Company.
Other items of expense
Distribution expenses of $2.0 million in FY2018 increased by $0.1 million or 4.6% from $1.9 million in FY2017 due to the following:
Administrative expenses of $12.7 million in FY2018 decreased by $0.4 million or 2.6% from $13.1 million in FY2017 due to the following:
However, the decrease was offset by the increase of legal and professional fees by $0.3 million from the professional fees incurred from the Settlement, which has since been reached.
Other operating expenses of $6.4 million in FY2018 decreased by $1.9 million or 23.1% from $8.3 million in FY2017. The Marine & Offshore Segment attributed to the decrease in other operating expenses by $1.9 million mainly due to the following:
The Property Development Segment's overall other operating expenses remained stable:
Finance income and loss
Finance costs of $1.2 million in FY2018 increased by $0.2 million from $1.0 million in FY2017. The increase is mainly attributable to increased short-term interest expenses from the Group's trust receipts and short-term revolving credit facilities. The Group's finance income is insignificant.
Income tax expense
In FY2018, the Group recorded an income tax credits of $0.2 million as compared to income tax expense of $0.1 million incurred in FY2017.
Loss for the year
Combining the profit before tax of $0.9 million for the Marine & Offshore Segment, loss before tax of $2.5 million for the Property Development Segment, and the unallocated head office expenses of $1.1 million, the loss before tax of the Group was $2.7 million. After accounting for income tax credits of $0.2 million, the Group's loss after tax in FY2018 was $2.5 million as compared to a loss of $9.8 million incurred in FY2017.
Non-current assets decreased by $0.9 million or 3.3% to $24.6 million as at 30 June 2018 from $25.5 million as at 30 June 2017. The decrease was mainly due to the decrease of property, plant and equipment by $4.4 million, which arose from the transfer of certain properties with a carrying amount of $3.6 million to investment properties. This decrease was partially offset by the purchases of plant and equipment of $0.7 million by the Marine & Offshore Segment. The investment property of $3.6 million as at 30 June 2018 relates to the Group's properties located at 33 Ubi Avenue 3, #01-14 Vertex, Singapore 408868 and 33 Ubi Avenue 3, #01-15 Vertex, Singapore 408868. During the year, the Group leased the properties to an independent third party. Accordingly, these properties were reclassified and recognised as investment property.
Current assets of $65.7 million as at 30 June 2018 decreased by $16.6 million or 20.1% from $82.3 million as at 30 June 2017. The decrease was mainly due to the following (the figures below do not add up due to rounding):
The decrease was offset by the following:
Non-current liabilities decreased by $15.1 million or 50.4% to $14.9 million as at 30 June 2018 from $30.0 million as at 30 June 2017. The decrease was due to the following:
Current liabilities increased by $2.1 million or 8.4% to $27.0 million as at 30 June 2018 from $24.9 million as at 30 June 2017. The increase was due to the following:
The increase was offset by a $0.5 million decrease in current tax liabilities.
Having considered the market conditions in Phnom Penh and other factors, the Group decided to terminate the JVA relating to the Group's "The Bay" project and to transfer the Group's entire shareholding interest in TDCPL to the joint venture partner's designated transferees. Subsequently on 7 August 2018, the Group entered into agreements with the joint venture partner to implement the termination and share transfer. Accordingly, the Group's interest in TDCPL's liabilities is presented separately as "liabilities directly associated with the assets held for sale". However, these liabilities are not significant.
Shareholders' equity of $48.5 million as at 30 June 2018 decreased by $4.4 million or 8.3% from $52.9 million as at 30 June 2017. The decrease was due to the following:
Cash flows from operating activities
Operating cash outflows before changes in working capital was $3.1 million in FY2018.
Net cash inflow from working capital was $15.0 million due to the following (the figures below do not add up due to rounding):
After deducting income taxes paid of $0.3 million, net cash generated from operating activities in FY2018 was $11.6 million.
Cash flows used in investing activities
Net cash used in investing activities in FY2018 was $0.6 million which was mainly attributable to the purchase of property, plant and equipment by the Marine & Offshore Segment.
Cash flows used in financing activities
Net cash used in financing activities in FY2018 was $14.3 million, mainly attributable to the following:
As a result of the above, cash and cash equivalents decreased by $3.3 million during FY2018. Cash and cash equivalents as at 30 June 2018 were $4.5 million.
Marine & Offshore Segment
Despite the recovery in oil prices, uncertainty in the near term remains. The Group has started seeing activities picking up and viewed this as a positive sign. Coupled with our continued good performance in the Mooring and Rigging Business, we are hopeful for the Marine & Offshore Segment and will look out for new business opportunities in this sector.
Property Development Segment
The Elite Terrace project has been completed in FY2018 and all units have been sold. The Group has acquired a landed residential property for redevelopment. Based on initial plans, the construction for this development is scheduled to be completed in first half of FY2020. The Group intends to market the development a few months before completion. Revenue will be recognised in FY2020 if the development is completed and sold then. The Group's Property Development Segment will continue to focus on landed residential developments and to look for more property development opportunities in Singapore.