FINANCIAL Information

Financial Information

3rd Quarter and 9 Months Financial Statements And Dividend Announcement For The Period Ended 30 September 2018

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Comprehensive Income

Review of Group Performance

3Q2018 vs 3Q2017

The Group is reporting a loss after tax of S$11.5 million for 3Q2018, as compared with a profit after tax of S$2.6 million for 3Q2017. The loss in 3Q2018 mainly due to the following key items:

• S$6.0 million arising from cost-overruns from delays, resulting in a provision for foreseeable loss made on a project in United Arab Emirates;

• S$2.5 million provision made relating to the consolidation of manufacturing operations in the Group

For 3Q2018, the Group’s revenue increased by 13.4% to S$36.2 million as compared with revenue for 3Q2017 mainly due to increased revenue from Singapore business unit. Raw materials and consumables used decreased from S$10.0 million in 3Q2017 to S$7.9 million in 3Q2018, mainly due to the current composition of projects having lower material costs and lower activity in manufacturing operations. Subcontractors’ costs increased from S$5.3 million in 3Q2017 to S$24.3 million in 3Q2018, mainly due to more related subcontract works incurred for current projects. Staff costs increased from S$7.1 million in 3Q2017 to S$8.2 million in 3Q2018 due to increased projects activities. Other expenses increased from S$3.8 million in 3Q2017 to S$7.0m in 3Q2018 mainly due to the provision taken up in relation to the consolidation of manufacturing operations. Tax expenses reduced in 3Q2018 by S$0.9 million due to losses in the current quarter as compared with S$0.6 million tax expenses in 3Q 2017.

Balance Sheet (30 September 2018 vs 31 December 2017)

Inventories decreased by S$0.4 million to S$7.6 million [Note 1(b)(3)]. The decrease was mainly due to lower activity levels in manufacturing operations. Contract assets increased by S$38.8 million to S$55.0 million [Note 1(b)(4)] as at 30 September 2018 due to higher amount of work in progress related to costs being incurred ahead of billings. Other receivables and deposits increased by S$3.2 million to S$9.4 million [Note 1(b)(1)]. The increase was mainly due to more deposits made to suppliers and subcontractors in the current period. Trade payables increased to S$75.5 million [Note 1(b)(5)]. The increase was mainly due to more project related costs in the current period.

Balance Sheet

Cash Flow

3Q2018 vs 3Q2017

For 3Q2018, there was net cash outflow of S$6.8 million. The cash outflow is mainly due to the cash outflows for operating activities and purchase of equipment.

Commentary

In line with the profit warning announcement dated on 19 October 2018, the Group is expected to report a loss for the full year ending 31 December 2018. The Group secured S$144.8 million of new work in 9MFY18. This brings the order book to S$158.7 million as at 30 September 2018.

2nd Quarter and Half Year Financial Statements And Dividend Announcement For The Period Ended 30 June 2018

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Review of Group Performance 2Q2018 vs 2Q2017

For 2Q2018, the Group’s revenue increased by 43.7% to S$48.6 million as compared with revenue for 2Q2017 mainly due to increased revenue from Malaysia, China and International business units. Other income increased due to writeback of doubtful receivables for payment received in 2Q2018. Raw materials and consumables used decreased from S$12.2 million in 2Q2017 to S$11.2 million in 2Q2018, mainly due to the current composition of projects having lower material costs. Subcontractors’ costs increased from S$10.2 million in 2Q2017 to S$25.7 million in 2Q2018, mainly due to more related subcontract works incurred for current projects. Staff costs increased from S$7.2 million in 2Q2017 to S$7.4 million in 2Q2018 due to increased projects activities. The Group achieved a higher profit before tax of S$1.4 million for 2Q2018, an increase of 317.0% as compared with S$0.3 million for 2Q2017. After taking into account tax expenses, the Group’s net profit after tax was S$1.0 million for 2Q2018.

Balance Sheet (30 June 2018 vs 31 December 2017)

Property, plant and equipment decreased by S$0.2 million mainly due to depreciation charges, offset by the plant and equipment purchased in 1H2018. Inventories increased by S$0.9 million to S$8.9 million [Note 1(b)(3)]. The increase was mainly due to increase in finished goods pending delivery. Net contract assets increased by S$38.8 million to S$48.9 million [Note 1(b)(4)] as at 30 June 2018 due to higher amount of work in progress related to costs being incurred ahead of billings. Total current trade receivables decreased to S$47.6 million [Note 1(b)(1)] as at 30 June 2018 as compared with S$50.3 million as at 31 December 2017. The decrease is mainly due to collections from customers and lesser billings in the current period. Other receivables and deposits increased by S$3.9 million to S$10.1 million [Note 1(b)(1)]. The increase was mainly due to more deposits made to suppliers and subcontractors in the current period. Trade payables increased by S$34.3 million to S$67.5 million [Note 1(b)(5)]. The increase was mainly due to more project related costs in the current period.

Cash Flow

2Q2018 vs 2Q2017

For 2Q2018, there was net cash outflow of S$0.1 million. There was a S$0.6 million net outflow from investing activities and a net inflow of $0.5 million from operating activities.

Commentary

Despite the additional property cooling measures implemented by the Singapore government, which we are monitoring, we remain optimistic on continuing our momentum in securing new work. The Group secured S$109.5 million of new work in 1H2018, which is an increase from S$13.5 million in 1H2017. This brings the order book to S$157.1 million as at 30 June 2018.

1st Quarter Financial Statements And Dividend Announcement For The Period Ended 31 March 2018

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.

Dear Shareholders,

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.

Balance Sheet

Cash Flow 1Q2018 vs 1Q2017

For 1Q2018, there was net cash outflow of S$4.0 million. There was a S$4.8 million net outflow from operating activities and a net inflow of $1.0 million from financing activities from the return of a security deposit pledge reaching maturity.

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.

Commentary

The Group completed the first phase of its restructuring in 2017 and underwent a series of measures including the appointment of a strengthened executive management team, in line with the Group’s strat egic roadmap. The Group secured S$59.0 million of new projects in 1Q2018, which is an incre ase in wins from nil in 1Q2017.

This brings the order book to S$149.5 million as at 31 March 2018. We are cautiously optimistic about the outlook in our key markets of Singapore and Malaysia, as well as our ongoing expansion int o other international markets. We anticipate continuing our momentum in securing projects for the remainder of FY2018.

Notes

1. Adjusted Fundamental Data is data that is adjusted for share splits, bonus issues, share consolidations, rights issues and other changes in share capital (such as placement shares). The latest number of shares is used to calculate these adjusted ratios and is applied right across all the full year results. ShareInvestor updates the total number of shares in issue on a best effort basis.

2. Share splits, bonus issues, share consolidations and rights issues are updated on the ex-date whereas other changes in share capital are updated within 7 working days of the release of the company's latest Results Announcement.

Up Coming Events

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No. Date & Time Location Event

Previous Events

No. Date & Time Location Event
1 Oct 26, 2018 Annual Reports And Related Documents
2 Oct 25, 2018 Third Quarter Results
3 Aug 03, 2018 Second Quarter And/ Or Half Yearly Results
4 Jul 19, 2018 Second Quarter And/ Or Half Yearly Results
5 Apr 19, 2018 Annual General Meeting
6 Apr 19, 2018 Extraordinary/Special General Meeting
7 Apr 19, 2018 First Quarter Results
8 Mar 27, 2018 Extraordinary/ Special General Meeting
9 Feb 26, 2018 Full Yearly Results