Financials
Financial Statements And Related Announcement - Half Yearly Results 2024
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CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Notes:
(1) HY2023: 6 months ended 31 December 2022
(2) HY2024: 6 months ended 31 December 2023 -
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
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FINANCIAL PERFORMANCE REVIEW
Revenue
Revenue decreased by S$7.9 million or 21.9% to S$28.2 million for the financial period from 1 July 2023 to 31 December 2023 (“HY2024”) from S$36.1 million for the financial period from 1 July 2022 to 31 December 2022 (“HY2023”).
- Marine & Offshore Segment revenue decreased by S$2.3 million or 7.6% in HY2024 as compared to HY2023. This was mainly due to the decrease in revenue contribution from the mooring and rigging business.
- Revenue contribution from Property Segment decreased by S$5.6 million or 91.3% in HY2024 as compared to HY2023. The decrease was mainly due to the absence of sale of a semi-detached landed property. This had also resulted in the decrease in cost of sales for this segment.
Gross profit
The Group's gross profit of S$10.6 million in HY2024 decreased by S$0.6 million or 5.4% compared to HY2023. The Group's gross profit margin improved to 37.7% in HY2024 from 31.1%in HY2023.
- Marine & Offshore Segment contributed gross profit of S$10.2 million to the Group in HY2024 as compared to S$10.6 million in HY2023. The gross profit margin increased to 37.1% in HY2024 from 35.6% in HY2023, mainly due to higher gross profit margin from the mooring and rigging business.
- Property Segment contributed gross profit of S$0.4 million to the Group in HY2024, mainly from the Group's property consultancy business.
Other operating income
Other operating income increased by S$395,000 to S$590,000 in HY2024 from S$195,000 in HY2023. The increase was mainly due to the (i) gain on disposal of asset held for sale and (ii) foreign exchange gain.
Distribution expenses
Distribution expenses decreased by S$59,000 or 6.9% to S$789,000 in HY2024 from S$848,000 in HY2023 due to lower freight costs as a result of easing in supply chain disruptions.
Administrative expenses
Administrative expenses increased marginally by S$0.2 million or 3.2% in HY2024, mainly due to higher manpower costs, driven by necessary salary adjustments to enhance our competitiveness in the market.
Other operating expenses
Other operating expenses decreased marginally by S$14,000 or 0.6% in HY2024.
Finance income
Finance income, comprising mainly interest income from bank deposits, remained insignificant for HY2024.
Finance costs
Finance costs increased by S$70,000 or 11.9% to S$652,000 in HY2024 from S$582,000 in HY2023, due to higher interest rates in HY2024 compared to HY2023.
Income tax expense
In HY2024, the Group incurred an income tax expense of S$0.3 million as compared to S$0.1 million in HY2023. The increase was due to additional provision of deferred tax liabilities for prior year.
Profit for the period
Combining the profit before tax of S$1.1 million for the Marine & Offshore Segment, loss before tax of S$0.2 million for the Property Segment and the unallocated head office expenses of S$0.5 million, the Group's profit before tax was S$0.4 million in HY2024 as compared to a profit before tax of S$0.8 million in HY2023. After accounting for income tax expense of S$0.3 million in HY2024, the Group's profit for HY2024 is S$0.1 million as compared to a profit of S$0.7 million in HY2023.
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FINANCIAL POSITION REVIEW
Non-current assets
Non-current assets increased by S$0.5 million to S$15.2 million as at 31 December 2023 from S$14.7 million as at 30 June 2023. The increase of S$0.5 million was mainly due to the acquisition of plant and equipment of S$2.0 million partially offset by (i) depreciation of property, plant and equipment of S$0.9 million; and (ii) the effect of movements in exchange rates for property, plant and equipment of foreign subsidiaries of S$0.2 million.
The non-current assets increase stated above was partially offset by (i) deferred tax assets decreased by S$0.2 million; and (ii) trade and other receivables decreased by S$0.2 million mainly due to monthly repayments from the global settlement of a legal suit.
Current assets
Current assets decreased by S$0.3 million from S$42.4 million as at 30 June 2023 to S$42.1 million as at 31 December 2023. The decrease was mainly due to the following:
- Trade and other receivables decreased by S$1.3 million, which is in line with the decrease in Marine & Offshore Segment revenue in HY2024;
- Assets held for sale decreased by S$0.6 million as at 31 December 2023 following the disposal of a leasehold property owned by TEHO Water & Envirotec Pte Ltd; and
- Cash and cash equivalents decreased by S$1.1 million from S$8.1 million as at 30 June 2023 to S$7.0 million as at 31 December 2023. Please refer to the “Cash Flows Review” section below for details.
The decrease in current assets stated above was partially offset by the following:
- Inventory increased by S$2.6 million from S$22.9 million as at 30 June 2023 to S$25.5 million as at 31 December 2023. This increase was attributed to proactive measures taken in anticipation of extended lead times for the supply of inventory within the Marine & Offshore Segment.
- Contract costs increased by S$0.1 million.
Non-current liabilities
Non-current liabilities decreased marginally by S$0.1 million to S$8.8 million as at 31 December 2023 from S$8.9 million as at 30 June 2023. This was mainly due to the decrease of deferred grant income by $0.1 million arising from the amortisation of grant received over the useful life of the process improvement projects for mooring and rigging business.
Current liabilities
Current liabilities increased by S$0.6 million to S$25.7 million as at 31 December 2023 from S$25.1 million as at 30 June 2023. This increase resulted from a rise of S$0.8 million in contract liabilities attributed from higher advance payments from customers; partially offset by the decrease in trade and other payables of S$0.2 million as a result of utilisation of trade facility to pay the suppliers.
Equity
As a result of the above, total equity of the Group decreased by S$0.3 million to S$22.8 million as at 31 December 2023 from S$23.1 million as at 30 June 2023.
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CASH FLOWS REVIEW
The Group's net cash flows generated from operating activities was S$0.9 million in HY2024 compared to net cash generated from operating activities of S$6.2 million in HY2023. The decrease was mainly due higher inventory levels in Marine & Offshore Segment's business and absence of sale proceeds from development properties.
Net cash flows from investing activities amounted to S$0.6 million in HY2024 was mainly due to proceeds from disposal of asset held for sale of S$0.8 million, partially offset by capital expenditure on the acquisition of property, plant and equipment of S$0.2 million.
Net cash flows used in financing activities amounted to S$2.7 million in HY2024 was mainly due to dividend payment of S$0.2 million, interest payment of S$0.7 million, repayment of loans and borrowings of S$9.7 million, and payment of lease liabilities of S$0.5 million, partially offset by proceeds from the drawdowns of bank loans and borrowings of S$8.4 million.
As at 31 December 2023, the Group had cash and cash equivalents of S$7.0 million as compared to S$5.2 million as at 31 December 2022.
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COMMENTARY
In light of prevailing macro-economic headwinds, encompassing challenges such as inflation, escalating costs, and high interest rates, the Group maintains a cautious outlook for the upcoming twelve months. The Group will take steps to control its operating costs to ensure that its business remains sustainable.