3rd Quarter and 9 Months Financial Statements And Dividend Announcement For The Period Ended 30 September 2017
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Review of Group Performance
For 3Q2017, the Group’s revenue decreased by 22.8% to S$33.6 million as compared with revenue for 3Q2016 as a result of decrease in contribution from Hospitality and commercial segments. During the quarter, fewer projects were completed as compared with 3Q2016.
The gross margin decreased from 23.1% in 3Q2016 to 22.9% for 3Q2017, as a result of lower margins recorded in projects completed during the quarter.
Marketing and distribution expenses increased from $1.6 million in 3Q2016 to S$1.7 million in 3Q2017. This was attributed to increase in travelling expenses and increase in staff costs relating to restructuring.
General and administrative expenses increased from S$2.3 million in 3Q2016 to S$2.6 million in 3Q2017.The increase was mainly due to increase in foreign exchange losses and impairment loss on doubtful receivables.
As a result, the Group achieved lower profit before tax of S$3.4 million for 3Q2017, a decrease of 45.4% as compared with S$6.2 million for 3Q2016. After taking into account tax expenses, the Group’s net profit after tax was S$2.8 million for 3Q2017.
The Group’s revenue for 9M2017 decreased by 9.0% to S$96.6 million as compared with the revenue for 9M2016. The decrease was mainly a result of decrease in contribution from the Residential Property segment.
The gross margin decreased from 21.8% in 9M2016 to 18.8% for 9M2017, as a result of lower margins recorded in projects completed during the period.
For 9M2017, marketing and distribution expenses increased by 19.6% to S$4.8 million as compared with S$4.0 million in 9M2016. This was attributed to increase in staff costs relating to restructuring, travelling expenses and showroom related expenses.
General and administrative expenses increased from S$5.7 million in 9M2016 to S$7.0 million in 9M2017. The increase was mainly due to exchange loss in 9M2017 as compared with an exchange gain in 9M2016, increase in staff costs relating to restructuring and recruitment expenses.
As a result, the Group achieved a lower profit before tax of S$6.5 million for 9M2017, as compared with S$13.7 million for 9M2016. After taking into account the tax expenses, the Group’s net profit after tax was S$5.2 million for 9M2017.
Balance Sheet (30 September 2017 vs 31 December 2016))
Property, plant and equipment decreased by S$1.4 million mainly due to depreciation charges, offset by the purchase of equipment and construction-in-progress during the period.
Contracts work-in-progress increased by S$6.8 million to S$12.0 million [Note 1(b)(4)] as at 30 September 2017. The increase was due to higher amount of work in progress pending certification by client as at 30 September 2017.
Total current trade receivables decreased to S$46.5 million [Note 1(b)(1)] as at 30 September 2017 as compared with S$66.2 million as at 31 December 2016. The decrease is mainly due to collections from customers during the current period and the decrease in revenue for 3Q2017 as compared to 4Q2016.
Other receivables and deposits decreased by S$2.7 million to S$4.1 million [Note 1(b)(1)]. The decrease was mainly due to lesser deposits made to suppliers and subcontractors..
Trade payables decreased by S$27.3 million to S$32.9 million [Note 1(b)(5)]. The decrease was mainly due to payment made to creditors during the period and lower accruals of project-related expenses due to less projects in the current period.
3Q2017 vs 3Q2016
For 3Q2017, there was net cash outflow of S$14.9 million. The cash outflow is mainly due to the payment of dividends in 9M2017 and cash outflows for operating activities.
9M2017 vs 9M2016
For 9M2017, there was net cash outflow of S$26.1 million. The cash outflow is mainly due to the payment of dividends in 9M2017 and cash outflows for operating activities.
As at 30 September 2017, the Group’s order book is S$146 million with a strong balance sheet and cash position.
As the Singapore residential and hospitality market picks-up and Malaysia, Thailand and China maintain their growth momentum; the Group is optimistic about its performance in these countries leading into FY2018. The Group’s focus is to regain its market share in Singapore, and expand its international footprint organically in a measured and disciplined manner, aligned with the Group’s core business and strategy.