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Financials

Unaudited Financial Statements and Related Announcement for the Third Quarter and Three Months ended 31 March 2018

Financials Archive

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Consolidated Statement of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance

STATEMENT OF COMPREHENSIVE INCOME

3QFY2018 vs 3QFY2017

9MFY2018 vs 9MFY2017

Revenue

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

The Group posted revenue of approximately S$6.65 million in 3QFY2018 as compared to S$107.94 million in the previous corresponding period in 3QFY2017. The difference in the reported revenue in the said quarter was attributed largely to the Group's development project, ACE@Buroh obtaining its temporary occupancy permit ("TOP") in 3QFY2017.

In 3QFY2018, revenue from Property Development was approximately S$2.96 million which was attributed to units sold in our completed development projects as compared to S$105.04 million largely due to the TOP of the project ACE@Buroh as mentioned above. Revenue from Property Investment for 3QFY2018 was S$3.69 million, 4.0% higher as compared to S$2.91 million in 3QFY2017. The increment was attributed mainly to rental income received from additional leased units in Tai Seng Link and ACE@Buroh.

For 9MFY2018, the Group posted revenue of approximately S$16.40 million as compared to S$126.31 million in 9MFY2017. The decrease was largely attributed to revenue from Property Development, amounting to S$117.64 million in 9MFY2017 as compared to S$5.55 million in 9MFY2018 due to the revenue contribution from the development project ACE@Buroh upon obtaining TOP and coupled with the sale of some units over at the development project Loyang Enterprise. There is no new third parties construction contracts in 9MFY2018 as such no revenue reported for Construction Services. Revenue recognised from Property Investment increased from S$8.51 million in 9MFY2017 to S$10.84 million in 9MFY2018, the increment was attributed primarily to rental income received from additional leased units in Loyang Enterprise, Tai Seng Link and ACE@Buroh.

Gross (Loss) Profit / Gross Profit Margin

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

The Group recorded a gross loss of approximately S$0.27 million in 3QFY2018, as compared to a gross profit of S$2.15 million in 3QFY2017. The gross loss in 3QFY2018 was due to the bulk sale of several units of the completed project compared to the higher costs incurred in the development of the project.

For 9MFY2018, gross profit recorded was S$5.29 million as compared to S$7.64 million in 9MFY2017. The reason for the lower gross profit achieved in 9MFY2018 was due to higher cost incurred in the development projects.

Other Income

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

Other income for 3QFY2018 was lower at approximately S$.0.54 million as compared to S$0.77 million in 3QFY2017. The decrease in other income was largely attributed to one-off income derived from government grants in 3QFY2017.

For 9MFY2018, other income recorded was S$4.59 million as compared to S$4.46 million in 9MFY2017. The higher other income for 9MFY2018 was largely attributed to one-off income derived from the sale of assets held for sale, liquidated damages levied due to non-completion of a divestment by the purchaser and gain from disposal of investment properties.

General and Administrative Expenses

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

General and administrative expenses for the period was down by 93.6% from approximately S$26.57 million in 3QFY2017 to S$1.71 million in 3QFY2018. The factors contributing to the reduction were largely due to lower bank charges, depreciation of fixed assets, repair and maintenance cost, sales commission, staff and related costs and impairment loss on property, plant and equipment. For 9MFY2018, general and administrative expenses decreased by 82.6% to S$5.63 million as compared to S$32.37 million in 9MFY2017, due to similar reasons mentioned above.

Finance Costs

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

Finance costs decreased by 4.0% from approximately S$2.04 million in 3QFY2017 to S$1.95 million in 3QFY2018. The decrease was mainly due to lower outstanding bank loans. For 9MFY2018, finance cost was lower by 14.3% at approximately S$5.88 million compared to S$6.86 million in 9MFY2017. The lower finance cost in 9MFY2018 was due mainly to lower outstanding bank loans.

Share of Profits of Associate

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

There was no share of profits of associate for 3QFY2018 and 9MFY2018 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 (Expense) Credit

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

Income tax expense for 3QFY2018 was at approximately S$0.18 million as compared to a credit of S$0.22 million in 3QFY2017. The tax expense for 3QFY2018 was due to previously under provided income tax payable.

For 9MFY2018, income tax was a credit of S$0.77 million as compared to a tax expense of S$0.02 million for 9MFY2017. The tax credit for 9MFY2018 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.

Loss for the period, net of tax

3QFY2018 vs 3QFY2017 / 9MFY2018 vs 9MFY2017

As a result of the foregoing, the Group registered a net loss of approximately S$3.57 million in 3QFY2018 as compared to that of S$25.01 million in 3QFY2017 and a net loss of S$0.86 million for 9MFY2018 as compared to a net loss of S$26.04 million for 9MFY2017.

STATEMENT OF FINANCIAL POSITION

As at 31 March 2018, total current assets stood at approximately S$123.56 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$163.95 million as at 31 March 2018 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$151.19 million due to additional units of completed projects being leased out, the increase was partially offset by the sale of some property, plants and equipment.

As at 31 March 2018, total current liabilities reduced to approximately S$144.43 million as compared to approximately S$164.83 million as at 30 June 2017. This was a result of repayment in loan due to associate, a reduction in total trade and other payables, income tax payables and also the reclassification of loan from third party from current liabilities to non-current liabilities due to an extension obtained. The overall reduction in current liabilities was partially offset by the re-classification of loan from controlling interests and bank loan from non-current liabilities to current liabilities.

Total non-current liabilities decreased to approximately S$56.24 million as at 31 March 2018 as compared to approximately S$63.93 million as at 30 June 2017. The decrease was mainly due to the re-classification of bank loan and loan from controlling interests from non-current liabilities to current liabilities which was partially offset by a re-classification of loan from third party from current liabilities to non-current liabilities.

STATEMENT OF CASH FLOWS

Net cash outflow/inflow from operating activities

For the financial period 3 months ended 31 March 2018, the Group generated net cash outflow from operating activities of approximately S$5.39 million as compared to a net cash inflow of approximately S$9.35 million in 3QFY2017. The net cash outflow was primarily due to repayment in trade and other payables, income tax and interest paid which was partially offset by proceeds from sale of completed properties held for sale.

For 9MFY2018, the Group generated net cash outflow from operating activities of approximately S$14.40 million mainly due to repayment of trade and other payables, interest paid and income tax paid.

Net cash inflow/outflow in investing activities

The Group recorded net cash inflow of approximately S$4.66 million for 3QFY2018 from investing activities as compared to net cash outflow of approximately S$4.13 million in the corresponding period last year. The net cash inflow in 3QFY2018 was mainly attributed to the proceeds received from the disposal of property, plant and equipment and investment properties.

For 9MFY2018, the Group recorded a net cash inflow from investing activities of approximately S$13.49 million as compared to a net cash outflow of S$24.55 million in 9MFY2017. The net cash inflow was largely attributed to the proceeds received from the disposal of assets held for sale, property plant and equipment and investment properties.

Net cash outflow/inflow from financing activities

The Group recorded net cash outflow of approximately S$0.43 million from financing activities in 3QFY2018 as compared to a net cash inflow of S$1.44 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 9MFY2018, the Group recorded a net cash outflow of S$5.81 million from financing activities as compared to a net cash inflow of S$2.69 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 and the reduction in fixed deposits pledged.

As a result of the above, the Group recorded a net decrease in cash and cash equivalents of approximately S$1.16 million in 3QFY2018.

Cash and cash equivalents as at 31 March 2018 stood at approximately S$7.75 million (including bank overdraft and fixed deposits pledged that totalled approximately S$3.72 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 is currently exploring various cities for the potential collaboration with Ping An Industrial and Logistics Co., Ltd.

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.

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