Financials
Condensed Interim Financial Statements For The Six Months Ended 30 November 2024
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
1HFY25 vs 1HFY24
Revenue
The Group recorded a 13.8% increase in revenue from S$55.5 million in 1H FY24 to S$63.2 million in 1H FY25. The increase in revenue was primarily due to an increase in income from container trucking, freight forwarding services, and marine logistics in the warehouse and logistics segment, higher sales volume of ready-mix concrete in the infrastructure materials and services segment, as well as higher sales from the agriculture segment.
Cost of sales
Cost of sales increased by 11.9% from S$39.0 million in 1H FY24 to S$43.7 million in 1H FY25. This was mainly due to higher operating costs in the warehouse and logistics and infrastructural materials and services segment, which were in line with the increase in revenue.
Gross profit
The Group’s gross profit increased by 18.1% from S$16.5 million in 1H FY24 to S$19.5 million in 1H FY25. Correspondingly, the Group’s gross profit margin increased from 29.7% in 1H FY24 to 30.8% in 1H FY25.
Other income
Other income increased by 180.0% from S$0.6 million in 1H FY24 to S$1.6 million in 1H FY25. This was mainly due to a net gain on the disposal of intangible assets amounted to a pre-tax amount of S$1.1 million in 1H FY25.
Marketing and distribution costs
Marketing and distribution costs increased marginally from S$188,000 in 1H FY24 to S$245,000 in 1H FY25, due to higher expenses incurred on marketing activities.
Administrative expenses
Administrative expenses increased by 6.3% to S$12.8 million in 1H FY25 from S$12.0 million in 1H FY24. The increase was mainly due to an increase in the allowance of expected credit loss for receivables in PRC by S$0.2 million and an increase in staff cost by S$0.3 million during the financial period.
Other expenses
Other expenses of S$69,000 incurred in 1H FY25 were mainly due to net foreign exchange loss.
Finance costs
Finance costs decreased by 16.4% from S$1.4 million in 1H FY24 to S$1.2 million in 1H FY25. This was mainly due to lower outstanding bank loans and a decrease in interest expenses on lease liabilities.
Share of results of associates
The associate, Cenxi Haoyi Recycling Co., Ltd, contributed a loss of S$53,000 in 1H FY25, which marked a reversal from a profit of S$19,000 in 1H FY24. This was mainly due to a decrease in sales volume in 1H FY25.
Tax expenses
The effective tax rate has decreased from 42.4% in 1H FY24 to 34.3% in 1H FY25 mainly due to higher profit from the warehouse and logistics segment which has a lower average effective tax rate of the Group.
Profit before tax
Profit before tax increase by 103.9% from S$3.3 million in 1H FY24 to S$6.7 million in 1H FY25, mainly due to a S$1.1 million net gain on disposal of intangible assets and an increase in profit from warehouse and logistics segment by S$2.2 million on the back of higher revenue.
Other comprehensive income
Other comprehensive income mainly comprises changes 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$3.7 million from S$118.2 million as at 31 May 2024 to S$114.5 million as at 30 November 2024. The decrease was mainly due to depreciation of property, plant and equipment, disposal of intangible assets and financial assets at fair value through profit or loss, as well as foreign currency devaluation on the investment in associate. The decrease was offset with the increase in deferred tax assets arising from increase in the allowance of expected credit loss for receivables in China.
Current assets increased by S$4.0 million from S$66.9 million as at 31 May 2024 to S$70.9 million as at 30 November 2024. This was mainly due to increase in inventories, trade and other receivables, prepaid operating expenses and cash and cash equivalents. The increase was offset with the decrease in derivative financial assets.
Non-current liabilities decreased by S$4.6 million from S$49.5 million as at 31 May 2024 to S$44.9 million as at 30 November 2024. The decrease was mainly due to reclassification of borrowings and lease liabilities to current liabilities due to repayment.
Current liabilities increased by S$2.3 million from S$41.3 million as at 31 May 2024 to S$43.6 million as at 30 November 2024. This was mainly due to increase in trade and other payables, lease liabilities and tax payable. The increase was offset by the decrease in other liabilities and repayment of borrowings.
Shareholders’ equity increased from S$94.3 million as at 31 May 2024 to S$96.9 million as at 30 November 2024. This was mainly due to profit for the period, partially offset by the decrease in other reserves due to foreign currency translation.
Condensed interim consolidated statement of cash flows
During 1H FY25, the net cash generated from operations amounted to approximately S$10.3 million. This comprises positive operating cash flows before changes in working capital of S$16.0 million, adjusted by net working capital outflow of S$4.2 million and taxes paid of S$1.5 million.
Net cash used in investing activities of S$0.5 million was mainly due to purchase of property, plant and equipment amounting to S$3.3 million, partially offset with the proceed from disposal of intangible assets of S$2.6 million.
Net cash used in financing activities of S$8.9 million was mainly due to the repayment of loans and borrowings, repayment of principal portion of lease liabilities and dividends paid.
After taking into consideration of the above movements, cash and cash equivalents increased by S$0.9 million from May 2024.
Commentary
In recent months, the Chinese government has stepped in to bolster the real estate industry with stimulus packages and measures(1). However, the Group will remain vigilant in its infrastructural materials and services businesses amid gradual economic recovery.
As a result of prior efforts and focus on improving storage and logistics capabilities for higher-value cargoes and enhancing assets to maximise usable areas, the Group's warehousing and logistics business segment continues to stabilise and grow moderately. The Group incorporated a wholly-owned subsidiary, GKE Logistics (Middle East) Pte. Ltd., on 29 October 2024, with the goal of exploring and growing its warehousing and logistics businesses outside of Singapore, leveraging its established market position and competitiveness in Singapore as well as the Singapore government's commitment to advancing the logistics sector(2).
The Group announced its plan on 9 January 2025 to diversify into the sales and distribution of telecommunications mobile handsets and accessories in wholesale and retail businesses in Singapore (the “Proposed Business Diversification”). The Proposed Business Diversification would require the approval of shareholders at the extraordinary general meeting to be held on 27 January 2025. Further information can be found in the circular dated 10 January 2025.
The Group believes that these business initiatives, which have strong long-term growth potential, aim to generate sustainable growth by diversifying revenue streams and would thereby enhance shareholders’ value and returns.
The Group will update shareholders on material developments as and when they arise.
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