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The Group registered revenue of S$66.9 million FY2016, 29.8% higher than the previous corresponding year with S$51.5 million. Project Sales contributed to most of this increase with a revenue increase of 47.8% in FY2016 compared to FY2015 (S$47.6 million vs S$32.2 million). Project Management and Maintenance Services Segment recorded a marginal decrease of 0.2% in FY2016 compared to FY2015 (S$19.31 million vs S$19.34 million).
The major contributing factor for the strong increase in the Project Sales revenue was the completion of major projects in Vietnam and Singapore.
The Project Management and Maintenance Services recorded a marginal decrease of S$0.03 million. This segment has provided the Group with a steady stream of recurring income.
Overall, in FY2016 the Group achieved a net profit before Minority Interest of S$2.9 million which is 40.7% improvement, compared to S$2.0 million in FY2015.
The Group’s maintains its strategy focusing on core business of Project Sales augmented by Project Management and Maintenance for the Vietnam, Singapore and Myanmar markets. The Group has continued to achieve profit for 2 consecutive years.
The Group recorded revenue of S$66.9 million in FY2016, representing an increase of 29.8% or, S$15.4 million over the previous corresponding year.
Revenue derived from Project Sales Segment increased by 47.8% or S$15.4 million over the previous corresponding year. The increase was mainly attributable to the completion of major projects in Vietnam and Singapore despite a drop of revenue from the Myanmar sector.
Revenue derived from Project Management and Maintenance Services Segment decreased by 0.2% or S$0.03 million over the previous corresponding year. Project Management and Maintenance Services remains one of the Group’s core businesses.
The Group posted gross profit of S$11.8 million in FY2016 representing an increase of 7.1% or S$0.8 million over the previous corresponding year.
Gross profit from Project Sales increased by 3.5% or S$0.1 million from S$3.58 million in FY2015 to S$3.7 million in FY2016. The slight increase in gross profit for this segment was mainly due to the mix of overseas project with different contributions.
Although revenue for Project Management and Maintenance Services Segment decreased marginally, gross profit improved by 8.8% or S$0.7 million in this segment from S$7.4 million in FY2015 to S$8.1 million in FY2016. The Group has managed to control expenses more effectively.
The Group’s strategies on focusing on core and recurring businesses have once again been validated.
Equipment and consumables used
In tandem with the increase in Group revenue, equipment and consumables cost increased by S$14.9 million or 37.4% from S$39.9 million in FY2015 to S$54.8 million in FY2016.
Freight charges increased by 11.8% from S$221,000 in FY2015 to S$247,000 in FY2016 in line with the increase in sales
Commission and consultancy
Commission and consultancy charges decreased by S$144,000 or 58.5% from S$246,000 in FY2015 to S$102,000 in FY2016. The Group’s order book remains solid (see Note 10 below) and services of external consultants were not needed as much.
Changes in inventories and contract work-in-progress
Inventories and contract work-in-progress decreased by S$0.2 million or 102.4% from S$205,000 in FY2015 to S$5,000 in FY2016, with the completion of major projects.
Interest-bearing deposits with financial institutions was S$13,000 an increase of S$7,000 or 116.7%, compared to S$6,000 in FY2015.
Other gains - net
Other gains increased by S$23,000 or 3.6% from S$631,000 in FY2015 to S$654,000 in FY2016 due to a foreign currency translation gain, miscellaneous claims and the recognition of gain on disposal of subsidiary corporation.
Distribution and marketing expenses
Distribution and marketing expenses decreased by S$115,000 or 46.0% from S$250,000 in FY2015 to S$135,000 in FY2016 due mainly to tighter control in expenses.
Administrative expenses increased by S$192,000 or 2.1%. A further breakdown of the costs is tabled below:-
Finance costs increase by S$6,000 or 6.8% from S$88,000 in FY2015 to S$94,000 in FY2016. This is largely due to increased borrowings from financial institutions in the beginning of the financial year.
Property, plant and equipment
Property, plant and equipment increased from S$1.2 million as at 31 December 2015 to S$1.5 million as at 31 December 2016. This increase was attributable to the purchase of plant and equipment amounting to S$0.8 million and partially offset by depreciation charges of S$0.46 million and a write off of S$34,000.
Cash and cash equivalent
Cash and cash equivalents increased from S$10.9 million as at 31 December 2015 to S$15.6 million as at 31 December 2016 mainly due to an increase in financing activities. Please refer to paragraph (e) under the Statement of Cash Flow.
Trade and other receivables
Trade and other receivables increased by S$22.3 million from S$25.3 million as at 31 December 2015 to S$47.7 million as at 31 December 2016. The increases was mainly due to the completion of a major project in the last quarter of the year and is still not due as per the Group’s usual business terms.
Inventories decreased marginally from S$395,000 as at 31 December 2015 to S$363,000 as at 31 December 2016 due to utilization of inventories for sales.
Trade and other payables
Trade and other payables increased by S$18.8 million from S$9.9 million as at 31 December 2015 to S$28.7 million as at 31 December 2016. The increases were due to project specific purchases for a major project completed in the last quarter of the year, which are also not due for payment as at the end of the financial year, in accordance with agreed supply terms.
Current and non-current borrowings
Current borrowings increased by S$4.3 million from S$10.9 million as at 31 December 2015 to S$15.2 million as at 31 December 2016. This was due mainly to the increase in bank financing to support the increase in sales.
Non-current borrowings increased by S$87,000 from S$202,000 as at 31 December 2015 to S$289,000 as at 31 December 2016. This is due to increase in finance leases by the Group.
Cash and cash equivalent increased by S$4.7 million from S$10.9 million as at 31 December 2015 compared to S$15.6 million as at 31 December 2016.
Net cash provided by operating activities as at 31 December 2015 amounted to S$0.8 million compared to net cash of S$1.5 million used in operating activities for 31 December 2016. This was mainly as a result of:
Net cash used in investing activities amounted to S$368,000 as at 31 December 2015 compared to S$879,000 as at 31 December 2016. The net cash was used mainly for the purchase of property, plant and equipment and disposal of subsidiary, net of cash.
Net cash provided by financing activities of S$4.8 million was made up of:
The outstanding order book as at 31 December 2016 is S$36.2 million. The secured contracts are from the Group’s repeat customers in the markets of Singapore, Vietnam and Myanmar.
The Group’s strategy of focusing on its core business has been validated by its performance during the year. We will continue to maintain this strategy of focusing on the recurring revenue streams generated from Project Management and Maintenance Service Segment, as well as developing new Projects sales from repeat and new customers in our target countries of Singapore, Vietnam and Myanmar.
Barring any unforeseen circumstances, the Group is confident on its strategy moving forward.