Financial Statement for the First Quarter and Three months Ended 31 March 2018
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Profit & Loss
|First quarter ended 31 March|
|Cost of sales||(36,962)||(24,651)||49.9|
|Other operating income||582||749||(22.3)|
|Other operating costs||(4,353)||(4,688)||(7.1)|
|Share of results of joint ventures||733||622||17.8|
|Share of results of associates||86||5,781||(98.5)|
|(Loss)/profit before taxation||(1,819)||5,011||N.M|
|Income tax expense||(46)||(14)||228.6|
|(Loss)/profit for the period||(1,865)||4,997||N.M|
|Other comprehensive income:|
|Items that may be reclassified subsequently to profit or loss|
|Foreign currency translation gain/(loss)||513||(402)||N.M|
|Other comprehensive income for the year||513||(402)||N.M|
|Total comprehensive income for the year||(1,352)||4,595||N.M|
|(Loss)/profit attributable to:|
|Equity holders of the Company||(1,598)||4,850||N.M|
|Total comprehensive income attributable to:|
|Equity holders of the Company||(1,084)||4,526||N.M|
N.M - Not meaningful
|Property, plant and equipment||37,620||38,816||42,979|
|Investments in subsidiaries||-||-||-|
|Investments in associates||16,231||16,145||10,162|
|Investment in a joint ventures||2,707||2,003||-|
|Deferred tax assets||-||-||424|
|Loans to associates||-||-||20,136|
|Loans to a joint venture||25,455||24,537||20,525|
|Loans to an associate||13,490||13,490||-|
|Amounts due from subsidiaries||-||-||-|
|Properties held for sale||1,159||1,057||9,463|
|Cash and bank balances||28,296||30,435||58,730|
|Income tax recoverable||7||510||-|
|Amounts due to subsidiaries||-||-||-|
|Trade and other payables||35,949||42,179||44,372|
|Loans and borrowings||1,647||1,607||3,201|
|Income tax payable||682||1,026||4,679|
|Net current assets||152,494||156,471||54,868|
|Trade and other payables||3,783||3,447||5,699|
|Deferred tax liabilities||245||308||239|
|Loans and borrowings||99,132||99,428||14,710|
|Equity attributable to equity holders of the Company|
|Foreign currency translation reserve||876||362||-|
Review of Performance
Income Statement Review – First Quarter 2018 ("1Q2018") vs First Quarter 2017 ("1Q2017")
The Group achieved revenue of S$40.7 million in 1Q2018 which was an improvement of S$11.2 million or 37.8% over S$29.5 million achieved in 1Q2017. The increase was underpinned by higher revenue from the Specialised Engineering Segment which mitigated the impact of lower revenue from the General Construction Segment and the Property Development Segment which did not register any sales this quarter as all development units were sold.
Gross profit margin was reduced from 16.5% to 9.1% as in this current quarter due to different project mix and generally more competitive margins.
Other operating income decreased by 22.3% due to lower interest and equipment rental income over the two quarters in comparison. Other expense which comprised foreign exchange differences and fair value gain or loss on derivatives amounted to a gain of S$0.1 million in 1Q2018 as compared to a loss of 0.2 million in 1Q2017.
Administrative costs increased marginally by 2.9% over the two quarters in comparison. Other operating costs were down by 7.1% as an allowance for inventory obsolescence of S$0.3 million was made in 1Q2017.
Finance cost increased by S$0.5 million as interest was incurred on the term loan obtained from the bank to finance for the purchase of Goh & Goh Building.
Share of results of joint ventures of S$0.7 million was mainly from the progressive recognition of income from the sale of condominium units of The Wisteria.
Share of results of associates for the period was considerably reduced as the profits from the sale of Lake Life Executive Condominium were almost entirely recognised in the last financial year.
The Group had a loss attributable to equity holders of the Company of S$1.6 million for 1Q2018.
Statement of Financial Position and Cash Flow Review
The Group's total assets decreased from S$308.4 million to S$305.8 million and total liabilities decreased from S$170.4 million to S$169.1 million.
Contract assets decreased by S$6.8 million as revenue recognised on contracts with customers were billed subsequent to the last financial year end. Consequently the current and non-current trade receivables which includes retention receivables, also increased.
Contract liabilities increased by S$5.0 million as there were excess of progress billings over revenue recognised on other projects.
Current trade and other payables decreased by S$6.2 million following payment settlement to suppliers and subcontractors subsequent to the last financial year end.
In the current quarter, the Group used S$0.2 million in operations. Net cash used in operating activities amounted to S$1.1 million after interest and income tax payments. The Group had also extended a further loan of S$0.8 million a joint venture for its property development project. Repayment of bank borrowings and finance leases amounted to S$0.4 million. As a result, cash and cash equivalents decreased by S$2.3 million for the current quarter.
The Group's cash position remained healthy at S$28.3 million as at 31 March 2018.
On 13 April 2018, the Ministry of Trade and Industry announced that based on advance estimates, the Singapore economy grew by 4.3 per cent on a year-on-year basis in the first quarter of 2018, higher than the 3.6 per cent growth in the fourth quarter of last year. The construction sector contracted by 4.4 per cent on a year-on-year basis in the first quarter, extending the 5.0 per cent decline in the previous quarter. The weak performance of the sector was due to a fall in both private sector and public sector construction activities.
The industry outlook remains challenging in the next 12 months with increasing competition, labour shortages and rising business costs. Although the construction demand is expected to improve due to the anticipated increase in public sector projects, the construction sector currently remains weak. With intense competition, tenders will continue to be challenging in the near term and bid prices will remain competitive at compressed margins.
The Group will continue to focus on its core businesses by leveraging its strong track record in building construction and civil engineering to secure more projects, as well as enhancing cost effectiveness and efficiency optimisation in the management of on-going projects.
On the re-development of Goh & Goh Building, the Group is still in discussions with the relevant authorities to optimise the potential of the development site. The Wisteria, a mixed development project under joint venture arrangement, is expected to obtain its Temporary Occupancy Permit ("TOP") in 2018.
The Group will continue to explore business opportunities both locally and in the region to maintain and sustain its long term growth.
As at the date of this announcement, the Group has an order book of approximately S$184 million in respect of construction projects, predominantly in Singapore and Malaysia.