Financials

Financial Statement for the First Quarter and Three months Ended 31 March 2017

Financials Archive

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

Profit & Loss

  Financial year ended 31 Mar
       
  2017
S$'000
2016
S$'000
Change
%
INCOME STATEMENT      
       
Revenue 33,075 82,093 (59.7)
       
Cost of sales (27,682) (77,232) (64.2)
       
Gross profit 5,393 4,861 10.9
       
Other operating income 749 559 34.0
Other expense (187) (304) (38.5)
       
Administrative costs (2,015) (1,969) 2.3
Other operating costs (4,688) (4,275) 9.7
Finance costs (84) (134) (37.3)
       
Share of results of joint ventures 622 (302) N.M.
       
Share of results of associates 5,781 79 N.M.
       
Profit/(loss) before taxation 5,571 (1,485) N.M.
       
Income tax expense (30) (237) (87.3)
       
Profit/(loss) for the period 5,541 (1,722) N.M.
       
Attributable to:  
  Equity holders of the Company 5,382 (1,682) N.M.
  Non-controlling interests 159 (40) N.M.
       
  5,541 (1,722) N.M.
       
STATEMENT OF COMPREHENSIVE INCOME  
       
(Loss)/profit for the period 5,541 (1,722) N.M.
       
Other comprehensive income:  
 Foreign currency translation differences (402) 700 N.M.
Other comprehensive income for the year (402) 700 N.M.
       
Total comprehensive income for the period 5,139 (1,022) N.M.
       
       
Total comprehensive income attributable to:  
  Owners of the parent 5,058 (1,112) N.M.
  Non-controlling interests 81 90 (10.0)
       
  5,139 (1,022) N.M.

N.M. - Not meaningful

Balance Sheet

  Group
  31-Mar-17
S$'000
31-Dec-16
S$'000
Non-current assets    
Property, plant and equipment 42,803 42,979
Intangible assets 419 419
Investments in subsidiaries - -
Investments in associates 15,857 10,162
Investment in a joint ventures - -
Deferred tax assets 424 424
Trade receivables 5,959 7,355
Loans to associates 20,223 20,136
Loans to a joint venture 21,992 20,525
     
Current assets    
Amounts due from subsidiaries - -
Properties held for sale 7,989 9,463
Gross amount due from customers for work-in-progress 5,041 6,118
Inventories 6,689 7,343
Trade receivables 50,002 55,866
Other receivables 1,789 2,458
Pledged deposits 4,800 4,657
Cash and bank balances (including fixed deposits) 56,781 58,730
  133,091 144,635
     
Current liabilities    
Amounts due to subsidiaries - -
Gross amount due to customers for work-in-progress 35,512 33,635
Trade and other payables 34,694 44,372
Deferred income 159 159
Other liabilities 2,043 2,142
Loans and borrowings 3,195 3,201
Income tax payable 4,623 4,890
  80,226 88,399
     
Net current assets/(liabilities) 52,865 56,236
     
Non-current liabilities    
Trade payables 3,293 5,699
Deferred income 2,893 2,933
Deferred tax liabilities 283 239
Loans and borrowings 14,279 14,710
  139,794 134,655
     
Equity attributable to equity holders of the Company    
Share capital 43,967 43,967
Treasury shares (69) (69)
Retained earnings 94,960 89,578
Foreign currency translation reserve (2,976) (2,652)
  135,882 130,824
     
Non-controlling interests 3,912 3,831
     
Total equity 139,794 134,655

Review of Performance

Income Statement Review - First Quarter 2017 ('1Q17') vs First Quarter 2016 ('1Q16')

Despite a decline in Group revenue from $82.1 million in 1Q16 to $33.1 million in 1Q17, the Group reported net profit attributable to equity holders of the Company of $5.4 million in the current quarter compared to a net loss of $1.7 million in 1Q16, mainly from improved operating performance and share of associates' profits.

The decrease in Group revenue for 1Q17 compared to 1Q16 was mainly due to lower revenue from the General Construction Segment, and partially offset by revenue from sale of one condominium unit at Bliss @Kovan under the Property Development Segment. Work volume for general construction has declined because most of these projects were completed in 2016. The Group's other property development projects are undertaken through an associate and a joint-venture and hence do not contribute to the Group's revenue.

Although there is a decrease in Group revenue, gross profit for 1Q17 rose to $5.4 million from $4.9 million in 1Q16, mainly attributable to improved performance from Pre-finished Pre-fabricated Volumetric Construction (PPVC) projects under the Specialised Engineering Segment, and partially offset by lower profits from General Construction due to a decrease in revenue. Overall gross margin for 1Q17 improved to 16.3% from 5.9% in 1Q16 as a result of difference in project mix.

Other operating income for 1Q17 rose to $0.8 million from $0.6 million in 1Q16, mainly attributable to higher interest income from bank deposits and administrative fees earned from the training and testing centres.

Other expense pertaining to foreign exchange loss on the Group's financial assets and forward currency purchases denominated in USD decreased to $0.2 million in 1Q17 from $0.3 million in 1Q16.

Administrative costs for both 1Q17 and 1Q16 remained unchanged at approximately $2.0 million with higher depreciation expense from solar leasing assets being partially offset by lower marketing costs in 1Q17. Operating costs increased by $0.4 million to $4.7 million in 1Q17 from $4.3 million in 1Q16, mainly due to impairment losses for inventories.

Finance costs in 1Q17 decreased to $84,000 from $134,000 in 1Q16, mainly due to lower interest expense after full repayment of a term loan in December 2016.

Share of results of associates rose to $5.8 million in 1Q17 compared to $79,000 in 1Q16, attributable to the Group's 35% equity interest in Lakehomes Pte Ltd ("Lakehomes"), the developer for LakeLife Executive Condominium in Jurong Lake district. TOP was obtained on 30 December 2016 and profits for 296 sold units were recognised in financial year 2016 based on financial accounting standards for Executive Condominium development. Lakehomes continues to report profits for another 194 sold units in 1Q17.

The Group reported $0.6 million profits from share of results of joint ventures in 1Q17, mainly attributable to progressive recognition of profits from sales of condominium units at a mixed residential and commercial development at Yishun ("Yishun Mixed Development"). Share of joint venture losses reported in 1Q16 was mainly attributable to fair value loss adjustment on derivative and interest expense accruing to bank borrowings and shareholders' loans to finance the development. The Group has 25% equity interest in Yishun Mixed Development.

Income tax expense for 1Q17 decreased to $30,000 from $237,000 for 1Q16 mainly due to adjustment for overprovision of prior year income tax by the Malaysia subsidiary.

Statement of Financial Position Review

The carrying amount of the Group's property, plant and equipment was unchanged at approximately $43.0 million as at 31 March 2017 and 31 December 2016. Depreciation charges for property, plant and equipment for 1Q17 was offset by construction and equipment installation costs for a PPVC holding yard at the Group's logistics and storage premises in Sungei Kadut.

Investment in associates rose to $15.9 million as at 31 March 2017 from $$10.2 million as at 31 December 2016, due mainly to additional recognition of the Group's share of profits in Lakehomes in 1Q17.

Changes to work-in-progress in the current quarter are not material. Gross amount due to customers for contract workin-progress increased marginally from $33.6 million as at 31 December 2016 to $35.5 million as at 31 March 2017 mainly due to increase in progressive claims in excess of costs incurred for certain major projects in Malaysia.

Properties held for sale decreased by $1.5 million to $8.0 million as at 31 March 2017 from 31 December 2016 due to the sale of one condominium unit at Bliss @Kovan. Inventories decreased to $6.7 million as at 31 March 2017 from $7.3 million as at 31 December 2016, due to disposals as well as provision for obsolescence.

Total current and non-current trade receivables decreased to $56.0 million as at 31 March 2017 from $63.2 million as at 31 December 2016, mainly due to lower volume of general construction work carried out.

Cash and bank balances and pledged deposits stood at $61.6 million as at 31 March 2017 compared to $63.4 million as at 31 December 2016. The decrease was mainly due to payments for renovation and equipment purchases at BBR's storage yard for PPVC works and loans to a joint venture for working capital requirements.

Current and non-current trade and other payables decreased to $38.0 million as at 31 March 2017 from $50.1 million as at 31 December 2016, due to reduced project costs expenditure as a result of lower general construction work volume.

Income tax payable decreased to $4.6 million as at 31 March 2017 from $4.9 million as at 31 December 2016 mainly due to adjustments for overprovision of prior year income tax by the Malaysia subsidiary.

Total bank loans and borrowings decreased by $0.4 million to $17.5 million as at 31 March 2017, due to repayments for term loans and finance leases.

Commentary

On 13 April 2017, the Ministry of Trade and Industry announced that based on advance estimates, the Singapore economy grew by 2.5 per cent on a year-on-year basis in the first quarter of 2017, easing from the 2.9 per cent growth in the previous quarter. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy contracted by 1.9 per cent after posting a strong rebound of 12.3 per cent in the preceding quarter. The construction sector contracted by 1.1 per cent on a year-on-year basis in the first quarter, extending the 2.8 per cent decline in the previous quarter, weighed down by a slowdown in private sector construction activities. On a quarter-on-quarter seasonally-adjusted annualized basis, the sector grew by 5.4 per cent, accelerating from 0.8 per cent growth in the preceding quarter.

The industry outlook remains challenging in the next 12 months with increasing competition and anticipated increase in labour cost due to short supply of foreign workers. The Group will continue to focus on its core business 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. BBR constantly looks for new property development opportunities and will continue to conduct feasibility studies to undertake property development projects.

As an early adopter of the PPVC method of construction, BBR expects to achieve marked improvement in construction productivity. BBR is on track to realise the Singapore Government's push for more efficient building techniques.

As at the date of this announcement, the Group has an order book of approximately $215 million in respect of construction projects, predominantly in Singapore and Malaysia.