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Financial Statements And Related Announcement - Second Quarter And/ Or Half Yearly Results

Financials Archive

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Consolidated Statement of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance

STATEMENT OF COMPREHENSIVE INCOME

Revenue

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

The Group posted revenue of approximately S$2.89 million in 2QFY2017 as compared to S$3.33 million in the previous corresponding period in 2QFY2016. The difference in the reported revenue in the said current quarter was attributed largely to a lower income from third party construction contracts.

In 2QFY2017, revenue from Construction Services was approximately S$0.02 million as compared to S$0.83 million in 2QFY2016. This was due to the completion of most of the third party construction contracts in the earlier quarters. There was no revenue from Property Development in 2QFY2017 as none of the Group's development projects achieved any temporary occupancy permit ("TOP") during the quarter and no additional sales from the completed projects during the quarter. Revenue from Property Investment for 2QFY2017 was S$2.87 million, 14.9% higher as compared to S$2.50 million in 2QFY2016. The increment was attributed mainly to rental income received from the leased units in Loyang Enterprise.

For HY2017, the Group posted revenue of approximately S$18.36 million as compared to S$5.88 million in HY2016. The increase in revenue was essentially attributed to revenue from Property Development, amounting to approximately S$12.60 million as compared to no revenue being recognised in the corresponding period. The revenue contribution from Property Development arose from the sale of a couple of units in our completed development project. The Group has completed all its third parties construction contracts in HY2017 as compared to multiple on-going third party construction contracts in HY2016 hence the lower revenue recognised in HY2017. Revenue recognised from Property Investment increased marginally from approximately S$5.05 million in HY2016 to approximately S$5.61 million in HY2017. The increment was attributed mainly to rental income received from the leased units in Loyang Enterprise.

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

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

The Group recorded a gross profit of approximately S$1.35 million in 2QFY2017, as compared to S$0.95 million in 2QFY2016. The reason for the higher gross profit achieved in 2QFY2017 was due to lower cost incurred to generate income for our investment properties.

For HY2017, gross profit recorded was at S$5.49 million as compared to S$1.92 million in HY2016. The reason for the higher gross profit achieved in HY2017 was due to the increase in revenue from both the Property Development and Property Investment segments.

Other income

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

Other income for 2QFY2017 was higher at approximately S$3.62 million as compared to S$0.26 million in 2QFY2016. For HY2017, other income was also higher at approximately S$3.69 million as compared to S$0.29 million in HY2016. The increase was largely attributed to one-off income derived from discounts and goodwill received for our previously completed projects.

General and Administrative Expenses

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

General and administrative expenses increased by 62.4% to approximately S$2.76 million in 2QFY2017 as compared to approximately S$1.70 million in 2QFY2016. The higher general and administrative expenses for 2QFY2016 was due to an absence of a reversal of professional fees which took place in the quarter 2QFY2016. For HY2017, general and administrative expenses was lower by 10.4% to approximately S$5.79 million as compared to S$6.47 million in HY2016. The factors contributing to the drop were mainly due to, amongst others, lower other staff and related costs.

Finance Costs

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

Finance costs decreased by 10.9% from approximately S$1.96 million in 2QFY2016 to S$1.74 million in 2QFY2017. The decrease is due to the absence of interest from REPS that was redeemed in 1QFY2017 and lower outstanding bank loans. The decrease was partially offset by a lower interest capitalisation rate due to the lesser on-going projects as compared to 2QFY2016.

For HY2017, finance costs increased by 28.3% from approximately S$3.76 million in HY2016 to S$4.83 million in HY2017. The increments were mainly due to interest from third party loans and lower project capitalisation rate as most of the Group's projects had obtained TOP. The increase was partially offset by reduction in interest from bank loans due to the lower outstanding bank loans.

Share of profits of associate

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

The share of profits of associate for 2QFY2017 was approximately S$0.12 million as compared to S$0.34 million in 2QFY2016. The decrease was due to certain reservation cost incurred by the subsidiary of the associate in Malaysia to secure land space for their on-going project. For HY2017, the share of profits of associate was approximately S$0.64 million, increased from S$0.30 million in HY2016 due to increase in rental income from the subsidiaries of the associate.

Income Tax

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

Income tax for the quarter was a credit at approximately S$0.28 million as compared to S$0.03 million as an expense in 2QFY2016. The decrease was due to adjustments made to prior year taxation based on the Estimated Chargeable Income statement received from the tax authorities.

For HY2017, income tax expense was approximately S$0.24 million as compared to S$0.06 million in HY2016. The higher tax expense was due to the sale of a couple of units in our completed development project, Loyang Enterprise, in 1QFY2017.

Profit for the period, net of tax

2QFY2017 vs 2QFY2016/ HY2017 vs HY2016

As a result of the foregoing, the Group registered a net profit of approximately S$0.86 million in 2QFY2017 as compared to a net loss of S$2.15 million in 2QFY2016 and a net loss of S$1.03 million in HY2017 as compared to a net loss of S$7.78 million in HY2016.

STATEMENT OF FINANCIAL POSITION

As at 31 December 2016, total current assets stood at approximately S$254.22 million as compared to S$300.84 million as at 30 June 2016. The reduction in total current assets was attributed to lower cash and cash equivalents from approximately S$44.95 million to approximately S$28.70 million and lower carrying value of completed properties held for sale from approximately S$75.33 million to S$46.77 million. The reduction in the latter was due to additional units of Loyang Enterprise being sold and leased.

Total non-current assets increased to approximately S$236.01 million as at 31 December 2016 as compared to approximately S$213.55 million as at 30 June 2016. The increment was attributed largely to an increase in investment property from approximately S$127.48 million to approximately S$147.05 million.

As at 31 December 2016, total current liabilities reduced significantly to approximately S$303.44 million as compared to approximately S$386.58 million as at 30 June 2016. This was a result of repayment in bank loans and loan due to associate during the period, redemption of the RCPS and REPS and a reduction in total trade and other payables. In addition, approximately S$17.24 million was re-classified as non-current liabilities instead of current liabilities as at 31 December 2016. The reduction was partially offset by the additional loan from third party taken up during the period under review.

Total non-current liabilities increased to approximately S$29.31 million as at 31 December 2016 as compared to approximately S$19.54 million as at 30 June 2016. The increase was mainly due to a reclassification of a bank loan from current liabilities to non-current liabilities.

STATEMENT OF CASH FLOWS

Net cash inflow from operating activities

For the financial period 3 months ended 31 December 2016, the Group generated positive net cash inflow from operating activities of approximately S$4.74 million as compared to approximately S$8.14 million in 2QFY2016.

The net cash inflow was primarily due to proceeds from properties held for sale amounting to approximately S$6.48 million and inflow from trade and other receivables amounting to approximately S$3.97 million but was partially offset by an outflow from trade and other payables amounting to approximately S$6.93 million.

Net cash outflow in investing activities

The Group recorded net cash outflow of approximately S$5.95 million for 2QFY2017 from investing activities as compared to net cash outflow of approximately S$9.96 million in the corresponding period last year. The net cash outflow in 2QFY2017 related mainly to the additions to investment properties.

Net cash inflow from financing activities

The Group recorded net cash inflow of approximately S$9.84 million from financing activities in 2QFY2017 as compared to a net cash inflow of S$11.87 million in the corresponding period last year. The net cash inflow was largely due to increase in loan from third party and was partially offset by the net repayment of bank loans.

As a result of the above, the Group recorded a net increase in cash and cash equivalents of approximately S$8.63 million in 2QFY2017.

Cash and cash equivalents as at 31 December 2016 stood at (including bank overdraft and fixed deposits pledged that totalled approximately S$4.06 million) approximately S$24.65 million.

Commentary

The Group remaining property development project, namely Ace@Buroh is near construction completion. Barring unforeseen circumstances, Ace@Buroh should receive TOP in the 3rd quarter of FY2017.

The industrial property segment continue to be challenging with both leasing and selling activities being subdued. Nevertheless, the Group will continue to focus its effort to market the remaining units of both Loyang Enterprise and Ace@Buroh.