Financial Statements And Related Announcement - Full Yearly Results 2022

• CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS
  

  Notes:
  n.m.: not meaningful.

• CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
  
• CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
  
• FINANCIAL PERFORMANCE REVIEW

  Comparing 2HY2022 to 2HY2021

  Revenue

  The Group's revenue increased by S$2.2 million or 7.9% to S$30.6 million in 2HY2022 from S$28.4 million in 2HY2021 and gross profit increased by 7.1% from S$11.0 million in 2HY2021 to S$11.8 million 2HY2022. The increase was driven by higher revenue from Marine & Offshore Segment. Gross profit margins of the Group remained relatively stable at 38.6% for 2HY2022 and 38.8% for 2HY2021.
  
  Other operating income

  Other income increased by S$1.1 million or 228.7% to S$1.5 million in 2HY2022 from S$0.4 million in 2HY2021. The increase was mainly due to a global settlement of a legal suit in March 2022.

  Distribution expenses

  Distribution expenses increased by S$0.3 million or 38.5% to S$0.9 million in 2HY2022 from S$0.6 million in 2HY2021. These were mainly attributable to higher freight costs as a result of global supply chain disruptions and resumption of business travel and trade exhibitions following the lifting of border restrictions.

  Administrative expenses

  Administrative expenses increased by S$0.4 million or 6.6% mainly due to higher personnel expenses as a result of an increase in headcount and annual salary revisions.

  Other operating expenses

  Other operating expenses increased by S$0.3 million in 2HY2022. The increase was mainly due to:

  • Foreign exchange loss of S$0.1 million due to fluctuations in United States Dollar ("USD") and Euro Dollar ("EUR") against Singapore Dollar ("SGD").
  • Increase in telecommunication, utilities and general expenses by S$0.2 million due to full resumption of business activities and employees returning to work in the Group's offices.

  Finance income

  The increase in the Group's finance income, comprising mainly interest income from bank deposits, remained relatively constant for 2HY2022 as compared to that of 2HY2021.

  Finance costs

  Finance costs increased by S$0.06 million or 15.3% in 2HY2022 from S$0.4 million in 2HY2021. The increase was mainly due to higher utilisation of borrowings during the period.

  Income tax expense

  In 2HY2022, the Group incurred an income tax expense of S$0.6 million as compared to S$0.4 million in 2HY2021.

  Profit for the year

  Combining the profit before tax of S$3.0 million for the Marine & Offshore Segment, profit before tax of S$0.3 million for the Property Segment and the unallocated head office expenses of S$0.3 million, the Group's profit before tax was S$3.0 million in 2HY2022 as compared to a profit before tax of S$2.3 million in 2HY2021. Overall, the Group reported profit after taxation of S$2.4 million for 2HY2022.
  
  Comparing FY2022 to FY2021

  Revenue

  Revenue decreased by S$4.6 million or 7.5% to S$57.2 million for FY2022 from S$61.8 million for FY2021. The decrease was mainly attributable to the absence of sale of landed property. Notwithstanding this, the Group's gross profit of S$22.6 million in FY2022 was an increase of S$0.8 million or 3.6% from S$21.8 million in FY2021. The Group's gross profit margin also increased to 39.5% in FY2022 as compared to 35.3% in FY2021. The increase in gross profit margin was driven by higher revenue from Marine & Offshore Segment.

  Other operating income

  Other income increased by S$0.1 million or 8.0% to S$1.5 million in FY2022 from S$1.4 million in FY2021. The increase was mainly due to global settlement of a legal suit in March 2022 amounting to S$0.8 million, and this was partially offset by the decrease in government grant income.

  Distribution expenses

  Distribution expenses increased by S$0.4 million or 29.2% to S$1.6 million in FY2022 from S$1.2 million in FY2021. These were mainly due to higher freight costs as a result of global supply chain disruptions and resumption of business travel and trade exhibitions following the lifting of border restrictions.

  Administrative expenses

  Administrative expenses increased by S$0.4 million or 3.2% mainly due to higher personnel expenses as a result of an increase in headcount and annual salary revisions.

  Other operating expenses

  Other operating expenses increased by S$0.6 million in FY2022. The increase was mainly due to:

  • Foreign exchange loss by S$0.4 million due to fluctuation in United States Dollar ("USD") and Euro Dollar ("EUR") against Singapore Dollar ("SGD").
  • Increase in telecommunication, utilities and general expenses by S$0.2 million due to full resumption of business activities and employees returning to work in the Group's offices.

  Finance income

  The increase in the Group's finance income, comprising mainly interest income from bank deposits, remained relatively constant for FY2022 as compared to that of FY2021.

  Finance costs

  Finance costs decreased by S$0.05 million or 5.5% from S$969,000 in FY2021 to S$915,000 in FY2022. The decrease was mainly due to the decrease in lease liabilities in FY2022.

  Income tax expense

  In FY2022, the Group incurred an income tax expense of S$0.8 million as compared to S$0.9 million in FY2021.

  Profit for the year

  Combining the profit before tax of S$4.2 million for the Marine & Offshore Segment, profit before tax of S$0.1 million for the Property Segment and the unallocated head office expenses of S$0.6 million, the Group's profit before tax was S$3.7 million in FY2022 as compared to a profit before tax of S$4.1 million in FY2021. Overall, the Group reported profit after taxation of S$2.8 million for FY2022.

• FINANCIAL POSITION REVIEW

  Non-current assets

  Non-current assets increased to S$15.4 million as at 30 June 2022 from S$13.3 million as at 30 June 2021. This increase was mainly due to the following:

  • Increase in property, plant equipment of S$1.6 million arising from capital expenditure of S$4.0 million. The increase in capital expenditure was partially offset by the depreciation of property, plant and equipment and right-of-use assets.
  • Other receivables amounting to S$0.5 million from the global settlement of a legal suit.

  The increase stated above was partially offset by the disposal of investment in associate of S$0.1 million, comprising of a 26% equity interest in Paneltec Pte. Ltd., in November 2021.

  Current assets

  Current assets increased by S$1.6 million from S$43.6 million as at 30 June 2021 to S$45.2 million as at 30 June 2022. The increase was mainly due to the following:

  • Inventories increased by S$3.9 million from S$21.2 million as at 30 June 2021 to S$25.1 million as at 30 June 2022. This is in line with Group's strategy to boost its supply chain resilience by increasing its inventories in order to minimise the adverse impact of the global supply chain disruptions.
  • Trade and other receivables increased by S$0.4 million, which is in line with the increase in the Marine & Offshore Segment revenue in FY2022.
  • Development properties increased by S$0.1 million from S$5.4 million as at 30 June 2021 to S$5.5 million as at 30 June 2022. The increase arose from the redevelopment of a landed residential property located at 16 Lorong Salleh in Singapore.

  The increase stated above was offset by the following:

  • Cash and cash equivalents decreased by S$2.5 million from S$7.0 million as at 30 June 2021 to S$4.5 million as at 30 June 2022. Please refer to the "Cash Flows Review" section below for details.
  • Contract assets decreased by S$0.3 million was due to lower unbilled contracts as at 30 June 2021.

  Non-current liabilities

  Non-current liabilities decreased by S$3.1 million to S$9.2 million as at 30 June 2022 from S$12.3 million as at 30 June 2021. The decrease was mainly due to the following:

  • Non-current portion of loans and borrowings decreased by S$3.0 million, due to repayment of term loans and lease liabilities.
  • Fair value adjustment on derivative financial liabilities of S$0.1 million.

  Current liabilities

  Current liabilities increased by S$4.7 million to S$31.1 million as at 30 June 2022 from S$26.4 million as at 30 June 2021. The increase was mainly due to the following:

  • Current portion of loans and borrowings increased by S$3.8 million, due to an increase in the drawdown of short-term revolving credit facilities for working capital purposes and term loan for the acquisition of a warehousing facility. A bank loan of S$1.9 million has been reclassified as a current liability as at 30 June 2022 in light of the subsidiary not meeting a financial covenant. On 22 August 2022, the subsidiary obtained a waiver from the bank.
  • Trade and other payables increased by S$0.7 million due to increase in purchases in tandem with the increase in Marine & Offshore Segment revenue in FY2022 and increase of inventories to boost its supply chain resilience.
  • Contract liabilities increased by S$0.3 million due to increase in deposits received pertaining to orders from customers in the Marine & Offshore Segment.

  Shareholders' equity

  Shareholders' equity increased by S$2.2 million to S$20.3 million as at 30 June 2022 from S$18.1 million as at 30 June 2021. The increase was mainly due to the net profit recorded for FY2022 amounting to S$2.8 million, partially offset by the decrease in other reserves of S$0.6 million.

• CASH FLOWS REVIEW

  The Group's net cash flows generated from operating activities was S$0.9 million in FY2022 compared to S$13.3 million in FY2021. The decrease in net cash flows generated from operating activities was mainly due to lower working capital requirements in FY2022.

  Net cash flows used in investing activities amounted to S$1.4 million in FY2022 was mainly due to capital expenditure on the acquisition of property, plant and equipment.

  Net cash flows used in financing activities amounted to S$2.0 million, mainly attributable to repayments of bank borrowings, lease liabilities, partially offset by proceeds from the drawdowns of bank loans and borrowings.

  As at 30 June 2022, the Group has cash and cash equivalents of S$4.5 million as compared to S$7.0 million as at 30 June 2021.

• COMMENTARY

  Despite the easing of COVID-19 measures globally, the Group continues to see persistent ongoing challenges in its business environment, due to the global supply chain disruption, the Russia-Ukraine conflict, inflation and rising interest rates.

  The Group continues to maintain a cautious outlook for the rest of the year and will step up its efforts in optimizing its business amidst these challenging times. Notwithstanding the current economic climate, the Group will continue to explore strategic investments and remain vigilant in the current business environment.