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Q1 2018 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 2018 compared with Q1 2017

Revenue decreased marginally to $105.2 million in Q1 2018 from $106.1 million in Q1 2017. Gross profit increased 2% to $46.2 million in Q1 2018.

Other income decreased 51% to $0.4 million in Q1 2018 from $0.9 million in Q1 2017 mainly due to the absence of license fee from the liquefied petroleum gas (LPG) business which was divested toward the end of 2017.

Distribution costs decreased 10% to $6.4 million in Q1 2018 from $7.1 million in Q1 2017 mainly due to the absence of expenses from the LPG business which was divested toward the end of 2017.

Finance costs decreased 15% to $5.4 million in Q1 2018 from $6.4 million in Q1 2017 mainly due to lower borrowings.

Other expenses decreased 55% to $0.9 million in Q1 2018 from $2.1 million in Q1 2017 mainly due to the absence of foreign exchange losses recorded in Q1 2017.

Share of profit from equity-accounted associates and joint ventures increased 70% to $0.9 million in Q1 2018 from $0.6 million in Q1 2017 mainly due to higher contributions from the overseas associates.

Income tax expense increased 96% to $3.2 million in Q1 2018 from $1.6 million in Q1 2017 mainly due to higher operating profit and under provision of prior years' income tax.

The Group's attributable profit increased 3% to $9.0 million in Q1 2018 from $8.7 million in Q1 2017.

Financial position review

Current trade and other receivables decreased by approximately $9 million mainly due to collection of outstanding receivables and the receipt of the balance $4.6 million proceed from the disposal of a business unit and liquidation of a subsidiary.

Cash flow review

As at 31 March 2018, the Group had cash and cash equivalents of $395 million. In Q1 2018, the Group received the balance $4.6 million proceed from the disposal of a business unit and liquidation of a subsidiary. Apart from this, the Group's components of cash flow and changes in these components from 31 December 2017 to 31 March 2018 were mainly due to the Group's ongoing operations.

Operation review

Property Rental & Services

Revenue decreased 5% to $31.3 million in Q1 2018 from $32.8 million in Q1 2017. Operating profit before interest decreased 5% to $16.4 million in Q1 2018 from $17.2 million in Q1 2017 mainly due to lower revenue and profit contribution from UE Bizhub WEST.

Property Development

Revenue decreased 2% to $12.7 million in Q1 2018 from $12.9 million in Q1 2017. Operating loss before interest decreased 81% to $0.5 million in Q1 2018 compared with operating loss of $2.7 million in Q1 2017 mainly due to improved contribution from the sale of property units from completed phases of Chengdu Orchard Villa.

Engineering & Distribution

Revenue increased 7% to $29.9 million in Q1 2018 from $27.9 million in Q1 2017 mainly due to higher contribution from the systems integration business, O'Connor's. Operating profit before interest increased 200% to $2.7 million in Q1 2018 from $0.9 million in Q1 2017 mainly due to project completion with higher profit margin from the systems integration business.

Manufacturing

Revenue decreased 11% to $19.0 million in Q1 2018 from $21.4 million in Q1 2017. Operating profit before interest decreased 78% to $0.2 million in Q1 2018 from $0.9 million in Q1 2017. The decline in revenue and operating profit was mainly due to certain existing precision engineering manufacturing programs reaching their end-of-life, whereas new programs have yet to reach mass production volumes.

Commentary

The global economic environment has showed signs of strengthening and the Group believes that this improved outlook will continue to bode well for Singapore's property market. The Group intends to embark on asset enhancement initiatives for its investment properties in Singapore and may make selective acquisitions if and when such opportunities arise. In China, the property cooling measures have brought about a relative slowdown in activity in certain cities, but the demand for good quality housing remains and the property market may continue to see sustainable growth in the longer term.