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Q1 2017 Financial Statement Announcement

Financials Archive

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Income Statement

Profit and loss

Comprehensive Income Statement

Comprehensive Income Statement

Statement of Financial Position

Balance Sheet

Review of Performance

Overview

Q1 2017 compared with Q1 2016

Revenue decreased 30% to $101.4 million in Q1 2017 from $144.8 million in Q1 2016 mainly due to lower revenue from property development following the completion of Eight Riversuites project. As a result, gross profit decreased 13% to $44.7 million in Q1 2017.

Interest income increased 101% to $0.8 million in Q1 2017 from $0.4 million in Q1 2016 mainly due to higher interest income from fixed deposits.

Other income decreased 19% to $0.9 million in Q1 2017 from $1.1 million in Q1 2016 mainly due to the absence of an insurance claim recorded by an overseas subsidiary in Q1 2016.

Finance costs decreased 37% to $6.4 million in Q1 2017 from $10.1 million in Q1 2016 mainly due to lower borrowings.

Other expenses increased 34% to $2.1 million in Q1 2017 from $1.5 million in Q1 2016 mainly due to higher foreign exchange losses recorded in Q1 2017.

Share of profit from equity-accounted associates and joint ventures decreased 66% to $0.6 million in Q1 2017 from $1.6 million in Q1 2016 mainly due to lower contributions from the overseas associates and joint ventures.

Income tax expense increased 11% to $1.6 million in Q1 2017 from $1.5 million in Q1 2016 mainly due to lower tax credit recognised on tax losses of certain subsidiaries.

The Group's attributable profit on continuing operations decreased 12% to $8.3 million in Q1 2017 from $9.5 million in Q1 2016.

Financial position review

Cash flow review

As at 31 March 2017, the Group had cash and cash equivalents of $496 million. In Q1 2017, the Group received $116 million mainly from the collection of remaining receivables upon obtaining the Certificate of Statutory Completion for Eight Riversuites project and utilised $252 million for the repayment of external borrowings. Apart from the above, the Group's components of cash flow and changes in these components from 31 December 2016 to 31 March 2017 were mainly due to the Group's other ongoing operations.

Operation review

Property Rental & Services

Revenue decreased 3% to $32.8 million in Q1 2017 from $33.9 million in Q1 2016. Operating profit before interest decreased 5% to $17.2 million in Q1 2017 from $18.2 million in Q1 2016 mainly due to lower revenue from property rental.

Property Development

Revenue decreased 81% to $8.2 million in Q1 2017 from $43.7 million in Q1 2016 mainly due to lower revenue recognition from the property sales at Eight Riversuites. Operating loss before interest increased to $3.0 million in Q1 2017 from $0.4 million in Q1 2016 mainly due to lower revenue.

Engineering & Distribution

Revenue decreased 9% to $27.9 million in Q1 2017 from $30.5 million in Q1 2016 mainly due to lower contribution from the systems integration business, O'Connor's in Malaysia. Operating profit before interest decreased 61% to $0.9 million in Q1 2017 from $2.3 million in Q1 2016 mainly due to lower profit contribution from the distribution businesses.

Manufacturing

Revenue decreased 4% to $21.4 million in Q1 2017 from $22.3 million in Q1 2016. Operating profit before interest decreased 53% to $0.9 million in Q1 2017 from $1.9 million in Q1 2016 mainly due to lower revenue and gross margin arising from changes in product mix.

Commentary

Global economic and geopolitical uncertainties as well as the weak economic outlook in Singapore will continue to weigh on the sentiment of the property market in Singapore. Hence, the Group is likely to face downward pressure on rental income in Singapore amid softening demand and increased supply of office and industrial space. The Group's China Property division continues to operate in challenging conditions against the backdrop of slower economic growth and patchy recovery in the property market in China. Nonetheless, Chengdu Orchard Villa Phase 4 development which is almost fully sold will contribute to the Group's performance over the next 12 months.

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