OKH Banner

Email This Print ThisFinancials

Unaudited Financial Statements and Related Announcement for the Second Quarter and Half Year ended 31 December 2017

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Consolidated Statement of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance

STATEMENT OF COMPREHENSIVE INCOME

2QFY2018 vs 2QFY2017

HY2018 vs HY2017

Revenue

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

The Group posted revenue of approximately S$6.28 million in 2QFY2018 as compared to S$2.89 million in the previous corresponding period in 2QFY2017. The difference in the reported revenue in the said quarter was attributed largely to a higher income from sale of units from completed projects.

In 2QFY2018, revenue from Property Development was approximately S$2.59 million which was attributed to units sold in our completed development project as compared to no revenue in the corresponding period 2QFY2017 as there were no additional sales from completed projects during the quarter. Revenue from Property Investment for 2QFY2018 was S$3.69 million, 28.4% higher as compared to S$2.87 million in 2QFY2017. The increment was attributed mainly to rental income received from additional leased units in Loyang Enterprise, Tai Seng Link and ACE@Buroh.

For HY2018, the Group posted revenue of approximately S$9.75 million as compared to S$18.36 million in HY2017. The decrease was largely attributed to revenue from Property Development, amounting so S$12.60 million in HY2017 as compared to S$2.6 million in HY2018 due to the higher number of sales of completed development projects in HY2017. There is no new third parties construction contracts in HY2018 as such no revenue reported for Construction Services. Revenue recognised from Property Investment increased from S$5.61 million in HY2017 to S$7.16 million in HY2018, the increment was attributed primarily to rental income received from additional leased units in Loyang Enterprise, Tai Seng Link and ACE@Buroh.

Gross Profit ("GP") / Gross Profit Margin ("GPM")

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

The Group recorded a gross profit of approximately S$3.61 million in 2QFY2018, as compared to S$1.35 million in 2QFY2017. The higher gross profit in 2QFY2018 was due to higher occupancy in the Group's investment properties. The higher gross profit was also due to sale of units from our completed development projects.

For HY2018, gross profit recorded was S$5.56 million as compared to S$5.49 million. The reason for the higher gross profit achieved in HY2018 was due to the increased revenue from the Property Investment segments however it was offset by the decreased in revenue from the Property Development segment.

Other Income

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

Other income for 2QFY2018 was lower at approximately S$2.37 million as compared to S$3.62 million in 2QFY2017. The decrease in other income was largely attributed to one-off income derived from discounts and goodwill received for our previously completed projects in 2QFY2017.

For HY2018, other income recorded was S$4.04 million as compared to S$3.69 million in HY2017. The higher other income was largely attributed to one-off income derived from the sale of assets held for sale and liquidated damages levied due to non-completion of a divestment by the purchaser.

General and Administrative Expenses

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

General and administrative expenses for the period was down by 33.3% from approximately S$2.76 million in 2QFY2018 to S$1.84 million in 2QFY2018. The factors contributing to the reduction were largely due to lower bank charges, depreciation of fixed assets, repair and maintenance cost, sales commission and staff and related costs. For HY2018, general and administrative expenses decreased by 32.3% to S$3.93 million as compared to S$5.79 million in HY2017. Lower lower bank charges, depreciation of fixed assets, repair and maintenance cost and staff and related costs contributed to the decrease in HY2018.

Finance Costs

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

Finance costs increased by 19.6% from approximately S$1.74 million in 2QFY2017 to S$2.08 million in 2QFY2018. The increase was mainly due to interest from third party loans. For HY2018, finance cost was lower by 18.6% at approximately S$3.93 million compared to S$4.83 million in HY2017. The lower finance cost in HY2018 was due mainly to lower outstanding bank loans.

Share of Profits of Associate

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

There was no share of profits of associate for 2QFY2018 and HY2018 as the investments in associate has been classified as assets held for sale and the Group no longer equity account for the said investment.

Income Tax Credit (Expense)

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

Income tax for 2QFY2018 was a credit at approximately S$0.95 million as compared to a credit of S$0.28 million in 2QFY2017. The credit in the quarter was due to adjustments made to prior year taxation based on the Estimated Chargeable Income statement received from the tax authorities which resulted in a tax refund.

For HY2018, income tax was a credit as explained above. HY2017 recorded an income tax of S$0.24 million due to the sale of a couple of units in our completed development project.

Profit (Loss) for the period, net of tax

2QFY2018 vs 2QFY2017 / HY2018 vs HY2017

As a result of the foregoing, the Group registered a net profit of approximately S$3.01 million in 2QFY2018 as compared to that of S$0.86 million in 2QFY2017 and a net profit of S$2.71 million in HY2018 as compared to a net loss of S$1.03 million in HY2017.

STATEMENT OF FINANCIAL POSITION

As at 31 December 2017, total current assets stood at approximately S$134.83 million as compared to S$173.60 million as at 30 June 2017. The reduction in total current assets was attributed largely to the sales and the leasing of completed properties held for sale, cash and cash equivalents and assets held for sale.

Total non-current assets increased to approximately S$163.96 million as at 31 December 2017 as compared to approximately S$142.85 million as at 30 June 2017. The increment was attributed solely to an increase in investment properties from approximately S$129.58 million to approximately S$150.696 million due to additional units of completed projects being leased out.

As at 31 December 2017, total current liabilities reduced to approximately S$138.83 million as compared to approximately S$164.83 million as at 30 June 2017. This was a result of repayment in bank loans and a reduction in total trade and other payables and income tax payables. In addition, the reduction in current liabilities was also due to a re-classification of a bank loan from current liabilities to non-current liabilities. The overall reduction in current liabilities was partially offset by the additional loan from third party taken up during the period under review and a re-classification of loan from controlling interests from non-current liabilities to current liabilities.

Total non-current liabilities increased to approximately S$69.55 million as at 31 December 2017 as compared to approximately S$63.93 million as at 30 June 2017. The increase was mainly due to a re-classification of a bank loan from current liabilities to non-current liabilities which was partially offset by a re-classification of loan from controlling interests from non-current liabilities to current liabilities.

STATEMENT OF CASH FLOWS

Net cash outflow/inflow from operating activities

For the financial period 3 months ended 31 December 2017, the Group generated net cash outflow from operating activities of approximately S$0.91 million as compared to a net cash inflow of approximately S$4.74 million in 2QFY2017. The net cash outflow was primarily due to repayment in trade and other payables and income interest paid which was partially offset by a tax refund received.

For HY2018, the Group generated net cash outflow from operating activities of approximately S$9.02 million mainly due to repayment of trade and other payables and income tax paid.

Net cash inflow/outflow in investing activities

The Group recorded net cash inflow of approximately S$0.02 million for 2QFY2018 from investing activities as compared to net cash outflow of approximately S$5.95 million in the corresponding period last year. The net cash inflow in 2QFY2018 was mainly attributed to the proceeds received from the disposal of property, plant and equipment and interest received.

For HY2018, the Group recorded a net cash inflow from investing activities of approximately S$8.83 million as compared to a net cash outflow of S$23.35 million in HY2017. The net cash inflow was largely attributed to the proceeds received from the disposal of assets held for sale.

Net cash outflow from financing activities

The Group recorded net cash outflow of approximately S$0.09 million from financing activities in 2QFY2018 as compared to a net cash inflow of S$9.84 million in the corresponding period last year. The net cash outflow was largely due to the repayment of bank loans and finance leases which was largely offset by additional loan received from third party.

For HY2018, the Group recorded a net cash outflow of S$5.38 million from financing activities as compared to a net cash inflow of S$1.25 million in the corresponding period. The net cash outflow was mainly attributed to repayment of bank loans which was partially offset by additional loan from third party.

As a result of the above, the Group recorded a net decrease in cash and cash equivalents of approximately S$0.97 million in 2QFY2018.

Cash and cash equivalents as at 31 December 2017 stood at approximately S$5.21 million (including bank overdraft and fixed deposits pledged that totalled approximately S$3.66 million).

Commentary

Notwithstanding the current state of the industrial real estate market in Singapore, the Group has started looking for attractive industrial land for development opportunities. Given its success in Addition & Alteration ("A&A") works and rental income from its Kim Yam Road, Herencia property, the Group will continue to look out for opportunities to undertake A&A to similar buildings to generate a recurrent income stream. The Group is pursuing overseas businesses in the region and has recently signed a Strategic Cooperation Agreement with Ping An Industrial and Logistics Co., Ltd to develop and manage warehouses in various cities in China.

The Group owns a diverse portfolio of development and investment properties as well as fixed assets. As part of its continuous review, the Group is assessing the relevance of the properties and fixed assets against its overall strategies. The Group may monetise some of these assets through sales so as to further strengthen the financial strength of the Group as it explores new business opportunities.