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Financial Statements And Related Announcement - First Quarter Results

Financials Archive

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Consolidated Statement of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance

Continuing Operations

Revenue

1QFY2017 vs 1QFY2016

The Group posted revenue of approximately S$15.47 million in 1QFY2017 as compared to S$2.55 million in the corresponding period 1QFY2016. The increase in revenue in the said quarter 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 basically from the sale of a few units in our completed development project, Loyang Enterprise which till date, has sold out approximately about 47.1%. The Group has completed all its third parties construction contracts and the revenue from construction services for this quarter arose as a result of a final billing in one of the completed construction projects. Revenue recognised from property investment increased marginally from approximately S$2.55 million in 1QFY2016 to approximately S$2.74 million in 1QFY2017. The increment was attributed mainly to rental income received from the leased units in Loyang Enterprise.

Gross Profit ("GP")

1QFY2017 vs 1QFY2016

The Group recorded a gross profit of approximately S$4.14 million in 1QFY2017 as compared to approximately S$0.97 million in 1QFY2016. The reason for the higher gross profit achieved in 1QFY2017 was similar to the reason for the increase in revenue for the quarter under review, primarily due to the sale of properties from the property development segment.

Other income

1QFY2017 vs 1QFY2016

Other income for the period was higher at S$74,000 as compared to S$29,000 in 1QFY2016. The increment was attributed to higher interest income and other miscellaneous income.

General and Administrative Expenses

1QFY2017 vs 1QFY2016

General and administrative expenses decreased by 36.4% to approximately S$3.03 million in 1QFY2017 as compared to approximately S$4.76 million in 1QFY2016. Contributing to the reduction in general and administrative expenses for the said quarter were, among others, lower professional fees and other staff and related costs.

Finance Costs

1QFY2017 vs 1QFY2016

Finance costs increased by 70.7% to approximately S$3.09 million in 1QFY2017 as compared to approximately S$1.81 million in 1QFY2016. The increment was mainly due to higher outstanding loans.

Share of profit/loss of associate

1QFY2017 vs 1QFY2016

The share of profit of an associate for 1QFY2017 was approximately S$0.53 million as compared to a share of loss of S$35,000 in 1QFY2016.

Income Tax Expense

1QFY2017 vs 1QFY2016

Income tax expense for the quarter was higher at approximately S$0.66 million as compared to a tax expense of S$29,000 in 1QFY2016.

Loss for the period, net of tax

1QFY2017 vs 1QFY2016

As a result of the foregoing, the Group registered a net loss of approximately S$1.89 million in 1QFY2017. This was much lower as compared to a net loss of approximately S$5.64 million registered in 1QFY2016.

STATEMENT OF FINANCIAL POSITION

As at 30 September 2016, total current assets stood at approximately S$260.76 million as compared to S$300.84 million as at 30 June 2016. The reduction in total current assets was mainly attributed to lower cash and cash equivalents from approximately S$44.95 million to approximately S$24.62 million, and completed properties held for sale from approximately S$75.33 million to approximately S$53.25 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$228.97 million as at 30 September 2016 as compared to approximately S$213.55 million as at 30 June 2016. The increment was attributed largely to an increase in investment properties.

As at 30 September 2016, total current liabilities reduced significantly to approximately S$297.02 million as compared to approximately S$386.58 million as at 30 June 2016. This was as a result of repayment in bank loans during the period, redemption of the RCPS and REPS and a reduction in total trade and other payables. In addition, approximately S$16.66 million was re-classified as non-current liabilities instead of current liabilities as at 30 June 2016 due to the rectification of a breach in one of our banks covenant.

Total non-current liabilities increased to approximately S$36.07 million as at 30 September 2016 as compared to approximately S$19.54 million as at 30 June 2016. The increase was due mainly to a re-classification of a bank loan from current liabilities to non-current liabilities.

STATEMENT OF CASH FLOWS

Net cash inflow/outflow from operating activities

For the financial period ended 30 September 2016, the net cash generated from operating activities was approximately S$5.31 million as compared to net cash used in operating activities of approximately S$4.29 million.

The net cash inflow was primarily due to proceeds from properties held for sale amounting to approximately S$22.08 million but was partially offset by an outflow from trade and other receivables of approximately S$1.09 million and trade and other payables of S$10.38 million.

Net cash outflow in investing activities

The Group recorded net cash outflow of approximately S$17.40 million for 1QFY2017 from investing activities as compared to net cash outflow of approximately S$3.73 million in the corresponding period last year. The net cash outflow in 1QFY2017 relate mainly to the increase in the purchase of property, plant and equipment and additions to investment properties.

Net cash inflow/outflow in financing activities

The Group recorded net cash outflow of approximately S$7.92 million from financing activities as compared to a net cash inflow of S$11.50 million in the corresponding period last year. The net cash outflow was largely due to net repayment in bank loans, repayment to controlling interests and the redemptions of the RCPS and REPS. The outflow was partially offset by the proceeds of S$50.00 million from the placement of new ordinary shares in the Company.

As a result of the above, the Group recorded a net decrease in cash and cash equivalent of approximately S$20.01 million in 1QFY2017.

Cash and cash equivalents as at 30 September 2016 stood at (including bank overdraft and fixed deposits pledged that totalled approximately S$8.60 million) approximately S$16.02 million.

Commentary

Property Development Business

With the completion of Loyang Enterprise in FY2016, the Group is focusing on the construction of our remaining property development project, namely Ace@Buroh. Barring unforeseen circumstances, Ace@Buroh is targeted for completion in FY2017.

Notwithstanding the current sluggishness in the industrial property segment, the Group will still continue to focus its effort to market the remaining units of both Loyang Enterprise and Ace@Buroh.

Investment Properties Business

The Group's investment property located at Tai Seng Link has been completed and the Group has embarked on leasing out the units of this investment property. Once all units of this investment property are being leased out, the recurring rental income from this property is expected to contribute positively to the Group's financial performance.