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Condensed Interim Financial Statements For The Six Months Ended 30 November 2023

Financials Archive

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Condensed interim consolidated income statement

Condensed interim consolidated statement of comprehensive income

Condensed Interim Balance Sheet

Review Of performance Of The Group

Sales

1HFY24 vs 1HFY23

Revenue

The Group recorded a 2.1% increase in revenue from S$54.4 million in 1H FY23 to S$55.5 million in 1H FY24. The increase was mainly due to higher revenue from Fair Chem Industries Pte Ltd (“Fair Chem”) by S$1.3 million in 1H FY24.

Cost of sales

Cost of sales increased by 0.7% from S$38.8 million in 1H FY23 to S$39.0 million in 1H FY24. This was mainly due to higher operating costs from warehouse and logistics segment, which was in line with the increase in sales.

Gross profit

The Group’s gross profit increased by 5.6% from S$15.6 million in 1H FY23 to S$16.5 million in 1H FY24. Correspondingly, the Group’s gross profit margin increased from 28.7% in 1H FY23 to 29.7% in 1H FY24.

Other income

Other income increased by 4.2% from S$542,000 in 1H FY23 to S$565,000 in 1H FY24. This was mainly due to late payment interest of S$97,000 paid by customer from the infrastructural materials and services segment. The increase was partially offset by the decrease in grant income from government from warehouse and logistics segment.

Marketing and distribution costs

Marketing and distribution costs decreased marginally from S$237,000 in 1H FY23 to S$188,000 in 1H FY24, due to lower expenses incurred on marketing activities.

Administrative expenses

Administrative expenses decreased by 0.5% to S$12.0 million in 1H FY24 from S$12.1 million in 1H FY23. The decrease in 1H FY24 was mainly due to decrease in the allowance of expected credit loss for receivables in China by S$0.7 million. This was offset by the increase in staff cost by S$0.2 million and utilities expenses by S$0.2 million.

Other expenses

Other expenses incurred in 1H FY24 was mainly due to net foreign exchange loss.

Finance costs

Finance costs decreased marginally by 4.7% from S$1.5 million in 1H FY23 to S$1.4 million in 1H FY24. This was mainly due to lower outstanding bank loans despite an increase in interest rate.

Share of results of associates

Share of result from associate, Cenxi Haoyi Recycling Co., Ltd, contributed a gain of S$19,000 in 1H FY24, a decrease from S$63,000 in 1H FY23, was mainly due to decrease in sales volume in 1H FY24.

Tax expenses

The effective tax rate has decreased from 46.9% in 1H FY23 to 42.4% in 1H FY24 mainly due to the decrease of loss from certain subsidiaries.

Profit before tax

The increase in profit before tax was mainly due to decrease in loss from infrastructural materials and services segment by S$1.2 million because of the decrease in provision for allowance of expected credit loss by S$0.7 million as well as decrease of loss from agriculture segment by S$0.1 million resulting from the increase of production and sales volume.

Other comprehensive income

Other comprehensive income mainly comprises change in fair value of cash flow hedges and foreign currency translation of subsidiaries and associates.

Condensed interim statements of Financial Position

Non-current assets decreased by S$6.2 million from S$131.0 million as at 31 May 2023 to S$124.8 million as at 30 November 2023. The decrease was mainly due to depreciation of property, plant and equipment, amortisation of intangible assets, foreign currency devaluation on the investment in associate. The decrease was offset with the increase in value of the financial assets at fair value through profit or loss.

Current assets decreased by S$1.0 million from S$69.2 million as at 31 May 2023 to S$68.2 million as at 30 November 2023. This was mainly due to decrease in derivative financial assets and cash and cash equivalents. The decrease was offset with increase in inventories, trade and other receivables and prepaid operating expenses.

Non-current liabilities decreased by S$6.9 million from S$63.9 million as at 31 May 2023 to S$57.0 million as at 30 November 2023. The decrease was mainly due to reclassification of borrowings and lease liabilities to current liabilities due to repayment.

Current liabilities did not change significantly as it remained approximately same S$43.8 million as at 31 May 2023 and 30 November 2023. The increase in its trade and other payables and tax payable were offset by the decrease in other liabilities and repayment of borrowings and principal portion of lease liabilities.

Shareholders’ equity decreased from S$92.4 million as at 31 May 2023 to S$92.3 million as at 30 November 2023. This was mainly due to dividend payment of S$1.6 million and decrease in other reserves due to foreign currency translation, offset by profit for the period.

Condensed interim consolidated statement of cash flows

During 1H FY24, the net cash generated from operations amounted to approximately S$9.4 million. This comprises positive operating cash flows before changes in working capital of S$13.7 million, adjusted by net working capital outflow of S$3.2 million and taxes paid of S$1.7 million.

Net cash used in investing activities of S$1.5 million was mainly due to purchase of property, plant and equipment amounting to S$1.5 million.

Net cash used in financing activities of S$10.6 million was mainly due to the repayment of loans and borrowings, payment of principal portion of lease liabilities and dividends paid.

After taking into consideration of the above movements, cash and cash equivalents increased by S$2.3 million to S$26.8 million as at 30 November 2023.

Commentary

The global economy is expected to continue to confront challenges of moderate growth and elevated inflation, with a mild slowdown from 2.9% in 2023 to 2.7% in 2024(1). While the long term economic outlook for China and Asia is relatively optimistic, the Group remains prudent and mindful of the inflationary pressure on its business operations in both Singapore and China.

Infrastructural materials and services segment in Guangxi, China, continues to progress gradually. The Group will continue to maintain stringent cost management and regular credit assessment on its customers.

Warehousing & logistics segment in Singapore is likely to continue to drive growth through further enhancement of assets to offer higher value-add supply chain management solutions and services to customers. The enhancement of assets comprises of maximising usable areas and enhancing capabilities for storage and logistics of higher-value goods and cargoes. This also enhances the Group’s competitive edge in the warehousing & logistics industry.

The Group will update shareholders on any material developments as and when appropriate.

Reference:
(1) https://www.oecd.org/newsroom/economic-outlook-a-mild-slowdown-in-2024-and-slightly-improved-growth-in2025.htm#:~:text=The%20Outlook%20projects%20global%20GDP,as%20it%20has%20in%202023