Investor Relations
 

Email This Print ThisFinancials

Unaudited Financial Statements And Dividend Announcement For The Financial Year Ended 31 December 2017 ("FY2017")

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Profit & Loss

Click to zoom

Profit & Loss

Balance Sheet

Click to zoom

Balance Sheet

Review of Performance

Review of results of operations

Revenue

The Group’s revenue for FY2017 decreased by 40.7% or US$6.2 million to US$9.0 million, from US$15.1 million for FY2016. This was mainly due to the significant decrease in revenue contribution by the Ports and Offshore segment (please refer to paragraph 16(a) Note 1 for the explanation of this segment) of US$8.0 million. Oil price volatility continued to impact this segment in FY2017. However, the significant decrease was partially offset by the increase in revenue contribution by the Renewables segment of US$1.8 million which represents an increase of approximately 353% as compared to FY2016.

Gross profit and gross profit margin

The Group’s gross profit for FY2017 decreased by 46.5% or US$3.4 million to US$3.9 million, from US$7.2 million for FY2016. The significant decrease was mainly due to decrease in gross profit from the Ports and Offshore segment of US$4.1 million. The decrease was partially offset by increase in gross profit generated from the Renewables segment of US$0.7 million. The movements in gross profit was consistent with the movements in revenue as explained earlier.

The Group’s gross profit margin for FY2017 decreased by 4.7 percentage points, from 48.0% for FY2016 to 43.3% for FY2017.

Distribution expenses

The Group’s distribution expenses increased by US$0.2 million or 44.1%, from US$0.3 million in FY2016 to US$0.5 million in FY2017. The increase was mainly due to a one-off reversal of sales commission of US$0.2 million in relation to a Ports and Offshore project in FY2016.

Administrative expenses

The Group’s administrative expenses increased by US$2.6 million or 51.5%, from US$5.0 million in FY2016 to US$7.6 million in FY2017 primarily due to the provision for doubtful debts of US$2.9 million in FY2017 as compared to US$0.4 million in FY2016. The provision for doubtful debts were made for those long outstanding arrears due from the customers. The increase was partially offset by the decrease in office related costs, such as office rental.

Other income

Other income decreased by US$0.3 million or 80.4%, from US$0.4 million in FY2016 to US$0.1 million in FY2017. In FY2016, the other income comprised primarily the one-off insurance claim of US$0.1 million and one-off income arising from the forfeiture of Goodwill Commitment in relation to lapse of the Proposed Placement of US$0.1 million.

Finance costs

The Group’s finance costs increased by US$0.1 million or 41.0%, from US$0.3 million in FY2016 to US$0.4 million in FY2017. The increase is mainly due to higher interest expenses arising from other trade banking facilities.

Income tax expense

The Group suffered income tax expense of US$0.1 million and US$0.3 million in FY2017 and FY2016 respectively, mainly due to the write-off of withholding tax.

(Loss) Profit after tax

As a result of the above, the Group suffered a loss for the year from continuing operations of US$4.6 million in FY2017 as compared to a profit for the year of US$1.6 million in FY2016.

Review of results of discontinued operations

Loss for the year from discontinued operations

The Group’s loss for the year from discontinued operations increased by US$0.6 million or 62.6%, from US$1.0 million in FY2016 to US$1.6 million in FY2017. The increase is mainly due to higher losses suffered as compared to FY2016 as a result of the slowdown in the business activities.

Review of Consolidated Statement of Financial Position

Non-current assets

The Group’s non-current assets decreased by US$1.4 million, from US$10.3 million as at 31 December 2016 to US$8.9 million as at 31 December 2017. The decrease was mainly due to the following:

  1. the goodwill and deferred tax asset impairment of US$0.3 million and US$0.6 million respectively as a result of the liquidation of a subsidiary; and
  2. the decrease in property, plant and equipment of US$0.8 million mainly due to the depreciation charge

The decrease was partially offset by the increase in intangibles of US$0.3 million in relation to the Company’s Materials Development Project.

Current assets

The Group’s current assets decreased by US$9.2 million, from US$15.7 million as at 31 December 2016 to US$6.5 million as at 31 December 2017. The significant decrease was mainly due to the following:

  1. a decrease in trade and other receivables of US$11.5 million mainly due to the provision for doubtful debts and the disposal of subsidiaries following the administration and liquidation during the year; and
  2. a decrease in cash and bank balances of US$0.3 million (please refer to the review of cash flows below). The decrease was partially offset by the increase in asset held for sale of US$2.5 million.

Non-current liabilities

The Group’s non-current liabilities increased by US$1.5 million, from US$3.6 million as at 31 December 2016 to US$5.1 million as at 31 December 2017. The increase was mainly due to the issuance of US$1.0 million of convertible notes during FY2017 and the loan from directors of US$0.5 million.

Current liabilities

The Group’s current liabilities decreased by US$5.7 million, from US$15.3 million as at 31 December 2016 to US$9.5 million as at 31 December 2017. The decrease was mainly due to the following:

  1. a decrease in trade and other payables, and tax payable of US$2.9 million and US$0.4 million respectively as a result of the disposal of subsidiaries following the administration and liquidation during the year; and
  2. a decrease in liabilities for trade bills discounted with recourse, and bank loan and advances of US$1.9 million and US$0.3 million respectively due to repayments during FY2017.

Working capital and going concern assessment

The Group reported a negative working capital of US$3.0 million as at 31 December 2017 as compared to a positive working capital of US$0.5 million as at 31 December 2016. However, as at the date of this announcement, the Board is of the opinion that the continuing use of the going concern assumption in the preparation of the financial information is appropriate on the basis that the Group has continuous support from the existing bankers, is able to generate sufficient cash flows from its operations based on the internal budget, as well as it is able to dispose a wholly owned subsidiary which has been classified as assets held for sale at the balance sheet date. Furthermore, the Group is currently negotiating with certain third parties to secure additional funding for the Group. The Company will update shareholders when necessary.

Review of cash flows

Operating activities

Net cash from operating activities in FY2017 amounted to US$0.8 million as compared to US$1.7 million in FY2016. The Group had a net cash outflow of US$1.9 million from its operating activities before changes in working capital. Working capital movement included a decrease in trade and other receivables of US$3.8 million, an increase in trade and other payables of US$1.4 million, partially offset by a decrease in trade bills discounted with recourse of US$1.9 million and increase in inventories of US$0.1 million.

Investing activities

Net cash used in investing activities in FY2017 amounted to US$1.5 million as compared to US$4.7 million in FY2016, mainly due to the investment in joint venture of US$1.2 million.

Financing activities

Net cash from financing activities for FY2017 amounted to US$0.8 million mainly due to proceeds from bank borrowing, issuance of convertible notes and director loans of US$1.4 million, US$0.7 million and US$0.3 million respectively which were partially offset by the repayment of bank borrowings and finance lease payables of US$1.6 million and US$0.1 million respectively.

As a result of the above, the Group’s cash and cash equivalents increased by US$0.1 million, from a deficit of US$0.3 million as of 31 December 2016 to a deficit of US$0.2 million as of 31 December 2017, net of fixed deposit pledged and bank overdrafts.

Commentary On Current Year Prospects

FY2017 saw a continuation of the challenging business environment for the oil and gas upstream segment. This led to a discontinuation of the Group’s Subsurface and Wells and Facilities engineering and consultancy business segments.

The Renewables segment saw more than 300 percent increase in revenue from FY2016 to FY2017, primarily through the sale of Ultra High Performance Cementitious (“UHPC”) materials for onshore or land-based wind turbine foundations. The business outlook for the Renewables segment remains encouraging.

The Group has developed UHPC applications for the civil construction and the downhole markets and expect the sales for these markets to take place in FY2018.