Email This Print ThisFinancials

Second Quarter and Half Year 2017 Financial Statements Announcement

Financials Archive

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

INCOME STATEMENT FOR THE SECOND QUARTER ("2Q2017") AND HALF YEAR ENDED 31 DECEMBER 2016 ("1H2017")

Statement of Comprehensive Income for the Second Quarter and Half Year Ended 31 December 2016

Balance Sheet

Review of the performance

Review on Group's Financial Results

6 months ended 31 December 2016 (1H2017) vs 6 months ended 31 December 2015 (1H2016)

The Group reported revenue of $62.0 million in 1H2017, a decrease of $37.5 million or 37.7% from $99.5 million in 1H2016. The revenue contribution from the Group's bored piling operations decreased by $30.7 million or 53.2% from $57.7 million in 1H2016 to $27.0 million in 1H2017. The revenue contribution from its eco-friendly piling, geoservices and other operations decreased by $5.5 million or 14.0% from $39.3 million in 1H2016 to $33.8 million in 1H2017. The decrease was mainly due to lower value of work undertaken in the current period as mostly of the on-going projects are in the initial stage of work.

Cost of sales decreased by $37.5 million or 41.3% to $53.3 million in 1H2017 from $90.8 million in 1H2016, in tandem with the decrease in business activities.

Despite the decrease in revenue, the Group registered a comparable gross profit of $8.7 million in 1H2017. This is mainly due to the increase in gross profit margin from 8.7% in 1H2016 to 14.0% in 1H2017 as a result of lower cost incurred for certain projects in 1H2017.

Other income increased from $1.0 million in 1H2016 to $1.5 million in 1H2017, was mainly due to the increase in rental income and premium gained from derivative financial instruments.

The decrease in administrative expenses from $9.8 million in 1H2016 to $9.5 million in 1H2017 was mainly due to a reduction in professional fee.

The Group reversed from other losses of $7.1 million in 1H2016 to other gains of $1.7 million in 1H2017. The other losses in 1H2016 was mainly due to a one-off unrecoverable progress claim written off of $7.4 million. The other gains in 1H2017 was mainly due to foreign exchange gain of $1.7 million. The exchange gain was derived as a result of the appreciation of Australian Dollar and Vietnamese Dong against Singapore Dollar during the period.

Finance costs decreased from $1.4 million in 1H2016 to $1.2 million in 1H2017 was in line with the decreased in borrowing.

The income tax expense was in relation to the profitable entities within the group. The higher effective tax rate was mainly due to certain losses which cannot be offset for income tax purpose.

As a result of the above, the Group reported a profit before income tax of $1.1 million in 1H2017 as compared to loss before tax of $8.6 million in 1H2016. The profit for the period was $0.5 million as compared to a loss of $8.7 million in 1H2016.

3 months ended 31 December 2016 (2Q2017) vs 3 months ended 31 December 2015 (2Q2016)

The Group reported revenue of $33.8 million in 2Q2017, a decrease of $20.3 million or 37.5% from $54.1 million in 2Q2016. The revenue contribution from the Group's bored piling operations decreased by $18.1 million or 56.2% from $32.2 million in 2Q2016 to $14.1 million in 2Q2017. The revenue contribution from its eco-friendly piling, geoservices and other operations decreased by $1.4 million or 6.8% from $20.7 million in 2Q2016 to $19.3 million in 2Q2017. The decrease was mainly due to lower value of work undertaken for the projects in the current period as mostly of the on-going projects are in the initial stage of work.

Cost of sales decreased by $22.9 million or 44.1% to $29.0 million in 2Q2017 from $51.9 million in 2Q2016, in tandem with decrease in business activities.

Gross profit increased by $2.5 million or 113.6% from $2.2 million in 2Q2016 to $4.7 million in 2Q2017, mainly due to lower cost incurred for certain projects in 2Q2017. Accordingly, the gross profit margin increase from 4.1% in 2Q2016 to 14.0% in 2Q2017.

Other income increased from $0.5 million in 2Q2016 to $0.7 million in 2Q2017, was mainly due to the increase in rental income and premium gained from derivative financial instruments.

The increase in administrative expenses from $4.5 million in 2Q2016 to $4.8 million in 2Q2017 was mainly due to increase in administrative staff costs and rental on premises.

The Group reversed from other losses of $6.3 million in 2Q2016 to other gains of $0.7 million in 2Q2017. This was mainly due to a one-off unrecoverable progress claim written off of $7.4 million in 2Q2016. The other gains in 2Q2017 was mainly due to foreign exchange gain of $0.8 million which was derived as a result of the appreciation of Vietnamese Dong against Singapore Dollar during the period.

The income tax expense was in relation to the profitable entities within the group. The higher effective tax rate was mainly due to certain losses which cannot be offset for income tax purpose.

As a result of the above, the Group reported a profit before income tax of $0.7 million in 2Q2017 as compared to a loss before tax of $8.9 million in 2Q2016. The profit for the period was $0.2 million as compared to a loss of $8.9 million in 2Q2016.

Review of Statements of Financial Position and Cash Flow

Current Assets

Current assets decreased by $5.0 million were mainly attributable to the followings:

  1. Positive cash flow generated from operations of $3.3 million was offsetted with cash flow used in investing activities and financing activities of $1.2 million and $10.1 million respectively, resulting in decrease in cash and cash equivalents of $8.0 million in 1H2017.

  2. Decrease in amount due from customers on construction contracts of $4.2 million as a result of decrease in business activities during the period.

Partially offset by:

  1. Increase in trade receivables of $3.8 million mainly due to progress billings issued to customers towards the end of the financial period.

  2. Increase in construction work-in-progress of $2.6 million mainly due to higher costs incurred in excess of value of work done for the on-going projects.

Non-Current Assets

Non-current assets decreased by $5.3 million were mainly attributable to the followings:

  1. Decrease in property, plant and equipment of $4.2 million as a result of depreciation charge of $7.9 million which was partially offset by additions in property, plant and equipment of $3.8 million.

  2. Decrease in available-for-sale financial assets of $1.4 million mainly due to repayment of funds received.

Current Liabilities (excluding borrowings)

Decrease in trade payables was in line with decrease in business activities and repayment made in the current period.

Total Borrowings

Net decrease in total borrowings were mainly due to repayment made in the current period.

Commentary

Outlook

According to the media release issued by the Building and Construction Authority on 6 January 2017, the total construction demand or the value of construction contracts to be awarded this year is projected to reach between $28.0 billion and $35.0 billion.

The Group's net order book as at 31 December 2016 stood at $193.9 million, comprising projects from public infrastructure, public housing, residential, commercial and geoservices.

The Group expects public infrastructure projects to be the key support for construction sector in 2017. The Group remains cautious about the local and regional markets where it operates and will continue to secure more projects. External factors such as keen competition, rising costs and the tight labour market will continue to add pressure on the Group's performance.

Click here for Financial Highlights