Financials
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Profit & Loss
| Group HY2006 S$'000 |
Group HY2005 S$'000 |
% Increase/ (Decrease) | |
|---|---|---|---|
| Revenue | 4,777 | 8,851 | (64) |
| Cost of Sales | (3,739) | (7,596) | (51) |
| Gross Profit | 1,038 | 1,255 | (17) |
| Financial income | 7 | 133 | (95) |
| Financial expense | (94) | (50) | 88 |
| Distribution costs | (127) | (238) | (47) |
| Administrative expenses | (1,896) | (1,773) | 7 |
| Other income | 13 | - | NM |
| Other credits / (charges) | 23 | 58 | (60) |
| Loss before tax | (1,036) | (615) | 68 |
| Income tax expense | - | - | NM |
| Loss after taxation | (1,036) | (615) | 68 |
| Minority interest | 64 | 107 | (40) |
| Net loss for the period | (972) | (508) | 91 |
Balance Sheet
| Group HY2006 S$'000 |
Group HY2005 S$'000 |
% Increase/ (Decrease) | |
|---|---|---|---|
| Revenue | 4,777 | 8,851 | (64) |
| Cost of Sales | (3,739) | (7,596) | (51) |
| Gross Profit | 1,038 | 1,255 | (17) |
| Financial income | 7 | 133 | (95) |
| Financial expense | (94) | (50) | 88 |
| Distribution costs | (127) | (238) | (47) |
| Administrative expenses | (1,896) | (1,773) | 7 |
| Other income | 13 | - | NM |
| Other credits / (charges) | 23 | 58 | (60) |
| Loss before tax | (1,036) | (615) | 68 |
| Income tax expense | - | - | NM |
| Loss after taxation | (1,036) | (615) | 68 |
| Minority interest | 64 | 107 | (40) |
| Net loss for the period | (972) | (508) | 91 |
Review of Performance
Overview
The Group continues to focus in its two core competencies - plastic injection moulding and mould design and fabrication with manufacturing facilities in Singapore and the PRC.
Review
Revenue for the period under review was S$4.8m, $4m or 46% lower as compared to that in the same period last year. The Group generally experienced lower business activities in first half of the year with lower order books from our customers mainly from the consumer electronic industry after the seasonal period, coupled with the following factors for the various operations.
The Singapore operations saw a decreasing order book since late 2005 due to phasing out of products from our major customer. Revenue decreased by S$1.8m or 80% to S$0.5m in 1H2006, as compared to the corresponding period in 2005.
Lower contributions from one of our China operations was expected after it rejected some poorer margin orders following the restructuring exercise in customer and product mix, as explained in FY2005 results announcement released on 28 Feb 2006. Weaker demand for our customer's products and slower ramp up of new programmes also contributed to the lower sales revenue.
While the other newer plant in the PRC continues to pick up its sales orders momentum from its new projects with improved contributions to the Group revenue in 1H2006, machine capacity has yet to be optimised to make up for the lower revenue from other plants.
Sales revenue from the PRC now accounted for 91% of the group revenue in 1H2006 as compared to 74% in the last period.
With lower sales revenue, gross profit decreased by S$0.2m or 18% from S$1.26m in 1H2005 to S$1m in 1H2006. However, gross margin improved to 21% in current period as compared 14% in last period, with improved machine utilisation in the new plants in China, and better customer and product mix.
The lower financial income in current period was due to the foreign exchange differences. The Group recorded an exchange loss of S$7,000 in current period compared to an exchange gain of $118,000 in the previous period.
Higher borrowings and rising interest rates resulted in the increase in finance expenses in the current period.
Administrative expenses were slightly higher with higher staff related expenses in the two new plants in Shanghai to support ramp up of new programmes.
As a result, the Group reported a net loss of $972,000 for current period as compared to a net loss of S$508,000 in 1H2005.
Balance Sheet
The decrease in Group's inventories, trade and other payables was in line with the reduced business activities of the Group in 1H2006, as compared to that as of 31 December 2005. Trade receivables were higher due to slower payment by one of our customers as of 30 Jun 2006. The overdue amount has since been collected in July 2006.
Cash flow
The Group's cash and cash equivalent stood at S$1.2m. The net cash outflow in the current period was mainly due to working capital requirements and repayment of term loans commenced in second half of 2005.
Commentary On Current Year Prospects
Singapore
To reduce the impact of losses incurred by the Singapore operations, the Group has decided to scale down the operations. The JTC building will be sold and excess machineries deployed to plants in China, or for disposal if deemed fit in the second half to improve the overall machine utilisation of the Group.
PRC
The Group continues to face challenges to optimise its capacity with weaker demand for our customer's products and higher raw material prices. As the China plants are participating in several new programmes with new and existing customers, they are expected to increase its contribution to the revenue growth of the Group.