4th Quarter and Full Year Financial Statements And Dividend Announcement For The Period/ Year Ended 31 December 2017
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Review of Group Performance
For 4Q2017, the Group’s revenue decreased by 37.5% to S$45.5 million as compared with revenue for 4Q2016 due to the decrease in contribution from the Hospitality and commercial segment. During the quarter, fewer projects were being completed as compared with 4Q2016.
The gross margin decreased from 22.9% in 4Q2016 to 1.2% for 4Q2017, impacted by project cost overruns, prolongation on project construction durations and impairment of inventory as described in Key Matters above.
Marketing and distribution expenses decreased from S$2.1 million in 4Q2016 to S$1.7 million in 4Q2017, mainly due to a decrease in staff-related costs.
General and administrative expenses increased from S$3.1 million in 4Q2016 to S$3.9 million in 4Q2017. The increase was mainly due to the impairment on receivables.
As a result, the Group incurred a loss before tax of S$5.0 million for 4Q2017, as compared with a profit before tax of S$11.6 million for 4Q2016. After taking into account tax credit, the Group’s net loss after tax was S$4.0 million for 4Q2017.
The Group’s revenue for FY2017 decreased by 20.6% to S$142.0 million as compared with the revenue for FY2016. The decrease was a result of decrease in contribution from the Residential property and Hospitality and commercial segments.
The gross margin decreased from 22.3% in FY2016 to 13.1% for FY2017, impacted by project cost overruns, prolongation on project construction durations, lower revenue and impairment of inventory as described in Key Matters above.
For FY2017, marketing and distribution expenses increased by 7.1% to S$6.5 million as compared with S$6.1 million in FY2016, mainly due to an increase in showroom expenses, travelling expenses and depreciation.
General and administrative expenses increased from S$8.9 million in FY2016 to S$10.9 million in FY2017. The increase was mainly due to the impairment on receivables.
The Group’s profit before tax was S$1.5 million for FY2017, as compared with a profit before tax of S$25.3 million for FY2016. After taking into account the tax expenses, the Group’s net profit after tax was S$1.2 million for FY2017.
Balance Sheet (31 December 2017 vs 31 December 2016))
Property, plant and equipment decreased by S$0.5 million mainly due to depreciation charges, offset by the leasehold improvements during the period.
Inventories decreased by S$5.2 million to S$8.0 million. This was in part due to the inventories written down during the year.
Non-current trade receivables decreased by S$2.9 million to S$11.9 million [Note 1(b)(1)] as at 31 December 2017 due to movement of retention sums.
Total current trade receivables decreased to S$50.5 million [Note 1(b)(1)] as at 31 December 2017 as compared with S$66.2 million as at 31 December 2016. The decrease is mainly due to slower collections from customers during the current period and the decrease in revenue for 4Q2017 as compared to 4Q2016.
Unbilled receivables increased to S$10.8 million [Note 1(b)(1)] as at 31 December 2017. The increase was due to work done, but pending certification by clients as at 31 December 2017.
>Other receivables and deposits decreased by S$1.8 million to S$5.0 million [Note 1(b)(1)]. The decrease was mainly due to lesser deposits made to suppliers and subcontractors.
Trade payables decreased by S$24.1 million to S$36.1 million [Note 1(b)(5)]. The decrease was mainly due to payment made to creditors during the year and lower accruals of project-related expenses due to less projects in the current year.
4Q2017 vs 4Q2016
For 4Q2017, there was net cash inflow of S$0.23 million. There was a $2.1m net inflow from operating activities and a net outflow of $1.6m for investing activities.
FY2017 vs FY2016
For FY2017, there was net cash outflow of S$25.9 million. The net cash outflow is mainly due to payment of dividends during FY2017 of $16.9 million, working capital outflows of S$5.0 million and investing outflows of S$2.9m.
The Group secured new projects worth S$57.4 million in the second half of FY2017, bringing its order book to S$131.4 million.
We are cautiously optimistic about continuing to strengthen our business in the Singapore market overall, Malaysia’s hospitality sector and other international markets where we are making a concerted effort to further expand into. We expect to keep up the momentum we have built in securing projects from the second half of 2017.
Following the management and structural changes we will continue to focus on building our order book and operational productivity efficiencies to reinforce our competitiveness and sustainability. We remain cognizant that our reputation is key to new business opportunities, and will seek to enhance our relationships with new and existing clients in our various markets of operation.