2013 First Quarter Financial Statement Announcement

Transcription

1 Corporation Limited (Company Registration No W) 2013 First Quarter Financial Statement Announcement PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY, HALFYEAR AND FULL YEAR RESULTS Financial statements on consolidated results for the First Quarter ended 31 March 2013 These figures have not been audited. 1(a)(i) Income statement Group Group Three Months ended 31 March First Quarter ended 31 March Change * Change $ '000 $ '000 % $ '000 $ '000 % (restated) Revenue (31,672) (3,139) ,999 12, Cost of sales 19,431 (418) (4,749) (9,613) (7,686) 25 Gross profit (12,241) (3,557) 244 6,386 5, Other gains (net) Miscellaneous (981) (74) 1, Expenses Distribution 1,081 (168) (743) (489) (597) (18) Administrative 5,176 (685) (856) (2,742) (2,472) 11 Finance 1, N/M (458) (688) (33) Profit before share of loss of associated companies and joint venture Share of loss of associated companies and joint venture (net) (5,887) 8,509 (169) 3,285 1, (89) (329) (60) (135) (56) Profit before income tax (5,683) 8,420 (167) 3,225 1, Income tax expense 1, (1,038) (478) 117 Net profit (4,399) 9,105 (148) 2,187 1, Attributable to: Equity holders of the Company (4,098) 9,036 (145) 2,187 1, NonControlling Interest (301) 69 N/M 69 (100) * Note (4,399) 9,105 (148) 2,187 1, The Q1 FY 2012 results previously announced was based on provisional purchase price allocation ("PPA) to assess the fair values of the net identifiable assets at Dormitory Investment Pte Ltd. Subsequently, when the PPA was finalised and disclosed in FY 2012 audited financial statements, an amortisation charge of $ 412,000 and its corresponding tax effect was included in the income statement for the period 1 January to 31 March 2012, and bank charges arising from the acquistion was reclassified from administrative expense to finance expenses. Therefore, the Q1 FY2012 results was restated to reflect the change. Page 1 of 12

2 1(a)(ii) Statement of Comprehensive Income Three Months ended 31 March First Quarter ended 31 March Change Change $ '000 $ '000 % $ '000 $ '000 % (restated) Net profit for the period Currency translation differences Financial assets, availableforsale Fair value loss (4,399) 9,105 (148) 2,187 1, , N/M 352 (507) N/M (70) (38) (26) 46 1, (533) N/M Total comprehensive income for the period (2,513) 9,361 (127) 2, Attributable to: Equity holders of the Company (2,212) 1,980 (212) 2, NonControlling Interest (301) (8) N/M 69 N/M (2,513) 1,972 (227) 2, (a)(iii) Notes to Income Statement After (charging) / crediting: Three Months ended 31 March First Quarter ended 31 March Change Change $ '000 $ '000 % $ '000 $ '000 % Interest expense 1, ,046 (458) (688) (33) Depreciation and amortisation 5,442 (166) (3,378) (3,747) (1,960) 91 (Allowance) / write back for doubtful debts (net) ,408 (21) 1 N/M Currency exchange gains / (loss) (net) 419 (366) N/M 68 (129) N/M Net loss on sale of property, plant & equipment 1 (49) (102) (6) N/M The miscellaneous gains (net) comprise the following: Three Months ended 31 March First Quarter ended 31 March Change Change $ '000 $ '000 % $ '000 $ '000 % Other rental income (523) 98 (634) Interest income (190) 26 (831) Dividend income (95) 15 (733) Currency exchange gain / (loss) (net) 419 (366) N/M 68 (129) N/M Others (592) (47) 1, N/M Other miscellaneous gains net (981) (74) 1, Page 2 of 12

3 ACQUISITION OF SKYHUTCH INTELLIGENT SDN BHD On 8 March 2013, the Group acquired 100% equity interest in Skyhutch Intelligent Sdn Bhd which is the owner of 2 plots of land, together with 2 dormitory blocks erected thereon, undergoing refurbishment at Pasir Gudang, Malaysia. Consequently, Skyhutch Intelligent Sdn Bhd became a subsidiary of the Group. The acquisition was accounted for as an acquisition of assets. The total consideration was allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values as follows : $ '000 Cash & cash equivalents * Investment property 1,480 Total assets 1,480 Accruals & other payables Loan from shareholders (1,480) Total liabilities (1,480) Identifiable net assets Consideration paid for 100% equity interest * Subsequent to the acquisition, the Group repaid the loan to the previous shareholders. The effects of the acquisition of subsidiaries on the cash flows of the Group for the financial year ended 31 March 2013 were as follows : $ '000 Cash paid 1,480 Less: cash and cash equivalents in subsidiary acquired * Cash outflow on acquisition 1,480 * Less than $1,000 ACQUISITION OF TWICE MODERATE SDN BHD On 8 March 2013, the Group acquired 100% equity interest in Twice Moderate Sdn Bhd which is the owner of a piece of land at Senai, Malaysia. Consequently, Twice Moderate Sdn Bhd became a subsidiary of the Group. The acquisition was accounted for as an acquisition of assets. The total consideration was allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values as follows : $ '000 Cash & cash equivalents * Investment Property 2,199 Total assets 2,199 Trade & other payables (2) Loan from shareholders (2,137) Total liabilities (2,139) Identifiable net assets 60 Consideration paid for 100% equity interest 60 Subsequent to the acquisition, the Group repaid the loan to the previous shareholders. The effects of the acquisition of subsidiaries on the cash flows of the Group were as follows : $ '000 Cash paid 2,197 Less: cash and cash equivalents in subsidiary acquired * Cash outflow on acquisition 2,197 * Less than $1,000 Page 3 of 12

4 1(b)(i) Balance Sheet Group Company 31 Mar Dec Mar Dec 12 $ '000 $ '000 $ '000 $ '000 Current assets Cash and cash equivalents 41,921 41,027 3,971 4,235 Trade and other receivables 12,394 14,065 11,809 12,085 Inventories 1,554 1,592 Other current assets 1,988 1, ,857 58,538 15,869 16,344 Noncurrent assets Trade and other receivables 176, ,353 Financial assets, availableforsale 4,212 4,250 4,212 4,250 Investments in associated companies 1,381 1,363 1,298 1,298 Investments in joint venture 4,184 4,255 Investments in subsidiaries 9,946 9,946 Investment properties 125, ,534 Property, plant & equipment 12,334 12, Deferred income tax assets Intangible assets 20,441 21, , , , ,963 Total assets 226, , , ,307 Current liabilities Trade and other payables (25,569) (26,186) (1,666) (1,904) Current income tax liabilities (7,396) (6,253) (301) (294) Borrowings (14,551) (12,710) (47,516) (45,149) (1,967) (2,198) Noncurrent liabilities Borrowings (65,888) (63,290) Other payables (979) (929) Deferred income tax liabilities (4,147) (4,399) (10) (29) (71,014) (68,618) (10) (29) Total liabilities (118,530) (113,767) (1,977) (2,227) Net assets 107, , , ,080 Equity Share capital 89,431 89, , ,742 Other reserves 15,796 15, Retained profits 2,729 1,308 4,981 5, , , , ,080 NonControlling Interest 3,702 Total equity 107, , , ,080 Total borrowings 80,439 76,000 Gearing ratio * 43% 41% Gearing ratio (adjusted)** 29% 27% * The gearing ratio is computed as borrowings divided by total capital. Total capital is calculated as borrowings plus net assets of the Group. ** The gearing ratio (adjusted) is computed as borrowings divided by total adjusted capital. Total ajusted capital is calculated as borrowings plus adjusted net asset value. The adjusted net asset value is the aggregate of net assets of the Group as at 31 March 2013 and the difference arising from the market value and the carrying value of the investment properties as at 31 December The market value is based on valuation made by external independent professional valuers. The difference between the market value and the carrying value of the investment properties as at 31 December 2012 is not recorded in the financial statements but is used only for the computation of the gearing ratio (adjusted). Page 4 of 12

5 1(b)(ii) Group's borrowings and debt securities (a) Amount repayable in one year or less, or on demand As at 31 Mar 13 $'000 As at 31 Dec 12 $'000 Secured 14,523 12,707 Unsecured 28 3 SubTotal 14,551 12,710 (b) Amount repayable after one year As at 31 Mar 13 $'000 As at 31 Dec 12 $'000 Secured 65,888 63,290 Unsecured SubTotal 65,888 63,290 Total Debt 80,439 76,000 (c) Details of any collateral The Group's secured borrowings includes bank borrowings and lease liabilities. The borrowings are secured by fixed charges over the investment properties and certain property, plant and equipment of the subsidiaries. Page 5 of 12

6 1 (c) Consolidated Cash Flow Statement Fourth Quarter First Quarter ended 31 December ended 31 March $ '000 $ '000 $ '000 $ '000 (restated) Cash flows from operating activities Net profit (4,399) 9,105 2,187 1,227 Adjustment for: Tax expense (1,284) (685) 1, Depreciation and amortisation (5,442) 166 3,747 1,960 Allowance for impairment of trade and other receivables (196) (13) 21 (1) Net gain from sale of property, plant and equipment (13) 12 (6) Interest income 190 (26) (102) (101) Dividend income 95 (15) (58) (52) Interest expense (1,078) (26) Share of loss of associated companies and joint venture (net) (204) Currency translation differences (352) (199) (193) (278) Operating cash flow before working capital changes (12,683) (4,759) 7,152 4,056 Changes in operating assets and liabilities, Inventories (503) Trade and other receivables (2,335) 4,298 1,650 2,329 Other current assets 258 (313) (323) (342) Trade and other payables (3,294) 738 (2,679) 1,072 Cash generated from operations (18,557) 501 5,837 7,349 Income tax paid net 3,126 1, (183) Net cash provided by operating activities (15,431) 1,690 5,880 7,166 Cash flows from investing activities Proceeds from sale of property, plant and equipment (61) (66) 6 Purchase of investment property 10,414 5,093 (3,208) (2,159) Purchase of property, plant and equipment 2,833 (2) (137) (56) Acquisition of interest in subsidiaries, net of cash acquired 40,196 (41,707) (3,677) (41,707) Acquisition of additional interest in a subsidiary 953 (2,474) (2,375) (2,474) Interest received (190) Dividend received (95) Net cash used in investing activities 56,226 (56,050) (9,231) (46,243) Cash flows from financing activities Proceeds from borrowings (32,577) 27,452 7,119 34,200 Repayment of borrowings 5,028 1,066 (2,560) (1,547) Interest paid 1, (458) (688) Dividends paid in relation to precompletion dividends 1,095 #REF! (1,095) Net cash provided by financing activities (23,108) #REF! 4,101 30,870 Net (decrease) / increase in cash and cash equivalents held 17,687 #REF! 750 (8,207) Cash and cash equivalents at beginning of the period 19,739 21,607 36,460 36,906 Effects of exchange rate changes on cash and cash equivalents 349 (139) 119 (139) Cash and cash equivalents at end of the period 37,775 #REF! 37,329 28,560 * The consolidated cash and cash equivalents comprise the following: Cash and bank balances 41,921 41,027 41,921 30,273 Bank overdraft (28) (145) (28) (145) Shortterm bank deposits charged as security to bank (820) (1,568) (820) (1,568) Restricted shortterm bank deposits (3,744) (3,744) 37,329 39,314 37,329 28,560 Page 6 of 12

7 1(d)(i) Statement of Changes in Equity As at 31 March 2013 vs 31 March 2012 Attributable to equity holders of the Company Retained Profits/ Share Other Accumulated Total NonControlling Total GROUP Capital Reserves losses Equity Interest Equity 2013 $'000 $'000 $'000 $'000 $'000 $'000 Balance as at 1 Jan ,431 15,482 1, ,221 3, ,923 Acquisition of additional shares in a subsidiary from noncontrolling interest Total comprehensive income for the period Balance as at 31 Mar 2013 (766) (766) (3,702) (4,468) 314 2,187 2,501 2,501 89,431 15,796 2, , ,956 Retained Profits/ Share Other Accumulated Total NonControlling Total GROUP Capital Reserves losses Equity Interest Equity 2012 (restated) $'000 $'000 $'000 $'000 $'000 $'000 Balance as at 1 Jan 2012 Noncontrolling interest's share in a subsidiary Adjustment on acquisition of additional shares in a subsidiary from noncontrolling interest Total comprehensive income / (expense) for the period Balance as at 31 Mar ,431 17,171 (5,565) 101,037 (25) 101,012 2,277 2,277 (19) (19) 19 (533) 1, ,431 16,638 (4,426) 101,643 2, ,983 Retained Profits/ Share Other Accumulated COMPANY Capital Reserves losses 2013 $'000 $'000 $'000 Total $'000 Balance as at 1 Jan 2013 Total comprehensive (expense) / income for the period Balance as at 31 March , ,100 (38) (119) 200, , ,080 (157) 205,923 Share Other Retained COMPANY Capital Reserves Earnings 2012 $'000 $'000 $'000 Balance as at 1 Jan , (1,554) Total $' ,457 Total comprehensive (expense) / income for the period Balance as at 31 March 2012 (26) 3, , ,277 3, ,262 Page 7 of 12

8 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buybacks, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. There were no changes in the Company's issued share capital. The Company does not have any outstanding convertibles and treasury shares as at 31 March 2013 and 31 March (d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. 31 Mar 13 Total number of issued shares excluding treasury shares 756,060, Dec ,060,841 1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. Not applicable. There were no treasury shares during the current financial period reported on. 2 Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed by the Company's auditors. 3 Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter). Not applicable. 4 Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied. The Group has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current reporting year compared with the audited financial statements as at 31 December However, the Group is considering to change its accounting policy on measuring its investment properties to fair value model in the current financial year. 5 If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. There are no significant changes in the Group's accounting policies and method of computation. 6 Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. Group Fourth Quarter ended 31 December First Quarter ended 31 March * (restated) Based on weighted average number of ordinary (a) shares on issue (0.54) cent 1.2 cent 0.29 cent 0.15 cent (b) On a fully diluted basis (0.54) cent 1.2 cent 0.29 cent 0.15 cent Note: The earnings per share is calculated based on weighted average number of ordinary shares in issue of 756,060,841 (2012 : 756,060,841) ordinary shares. Page 8 of 12

9 7 Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the : (a) current period reported on; and (b) immediately preceding financial year. Group Company 31 Mar Dec Mar Dec 12 Net asset value per ordinary share cents cents cents cents Revalued net asset value* per ordinary share cents cents * Note The Group and Company net asset per ordinary share is calculated based on existing issued share capital of 756,060,841 (2012: 756,060,841) ordinary shares. Revalued net asset value ("RNAV") is the aggregate of net assets of the Group as at 31 Mar 2013 and the surplus arising from the market value and the carrying value of the investment properties as at 31 December Group Performance Review A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following: (a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. First quarter review Q1 FY2013 vs Q1 FY2012 In Q1 FY2013, the Group recorded a turnover of S$16 million, which is a 23% increase as compared to S$12.98 million in Q1 FY2012. The increase in the Group s turnover was largely attributed to the Group s Accommodation Business which registered a turnover of S$11.14 million in Q1 FY2013, an increase of S$5.52 million from Q1 FY2012. This was largely due to improved occupancy as well as new acquisitions in FY2012. Optical Disc Business revenue was reduced by S$2.50 million as a result of reduced market demand for physical storage media. The Group s gross profit increased approximately 21% from S$5.29 million to S$6.39 million while gross profit margin decreased from 41% to 40% due to higher operating costs incurred from the newly acquired dormitories. Miscellaneous other net gains increased by S$0.28 million, owing to an exchange gain of S$0.07 million in Q1 FY2013 compared to an exchange loss of S$0.13 million in Q1 FY2012. Distribution cost decreased in conjunction with reduced sales from the Optical Disc Business. The Group s administrative expenses in Q1 FY2013 increased S$0.27 million as a result of higher salary costs and professional fees associated with the expansion of the Accommodation Business. Finance cost reduced by $0.23 million due to a nonrecurring Q1FY2012 expense amounting to S$0.43 million relating to the acquisition of a dormitory in Singapore, and offset by higher finance cost incurred in Q1 FY2013 due to increase in borrowings. The share of losses from associated companies and joint ventures arise mainly from the Group s 45% share in Lian Beng (Mandai) Pte Ltd ( LBCM Group ). Overall, the Group reported a net profit of S$2.19 million for Q1 2013, a 78% increase from S$1.23 million in Q The Accommodation Business contributed a net profit of S$2.47 million while the Optical Disc Business experienced a S$0.28 million net loss. Review of Group balance sheet The S$5.45 million increase in investment property was mainly due to the acquisition and development of accommodation projects in Johor, Malaysia and the development of the dormitory at Toh Guan. Intangible assets decreased by S$1.24 million due to the amortization of the favourable lease. Contraction of the Group s Optical Disc Business sales and production activities as compared to year end has resulted in reduced current trade receivables, inventories and trade payables. The Group has also settled payables due for payment relating to the dormitory construction projects. Borrowings increased S$4.40 million largely due to bank loans obtained to finance the Group s dormitory acquisitions in Q1 FY2013. Gearing ratio, adjusted for the revaluation of the investment properties, stood at a comfortable 29%. Page 9 of 12

10 Review of Company Balance Sheet The decrease in current trade and other receivables as well as trade and other payables were mainly due to the settlement of amounts due from subsidiaries and payables respectively. Review of Cash Flow Statement In Q1 FY2013, the Group generated positive net cash flow of S$7.15 million from operating activities before working capital changes, an increase of 76% compared to Q1 FY2012. Current year changes in working capital reduced by S$1.27 million compared to an increase of S$3.11 million in Q1 FY2012. The reduction was mainly from the settlement of the payables of construction activities within the Accommodation Business. Net cash of S$9.23 million used in investing activities was mainly attributed to the acquisition of dormitories in Malaysia, acquiring additional interest in a dormitory in Singapore as well as developing existing dormitories. Net cash of S$4.10 million generated from financing activities was mainly due to additional borrowings of S$7.12 million to finance the acquisition of dormitories in Malaysia and Singapore. As a result of the above activities, the Group recorded a net increase in cash and cash equivalents of S$0.75 million. 9 Where a forecast, or a prospect statement has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable 10 A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Accommodation Business The Group s Accommodation Business is expected to remain robust. Backed by strong demand for workers accommodation in Singapore, the workers accommodation at Tuas and Toh Guan (in aggregate of approximately 14,000 beds) are expected to retain their almostfull occupancy rates. The Group s third workers accommodation property in Singapore at Mandai, in which the Group has a 45% interest, has completed construction and development works for the first phase. It opened in April 2013 with 4,750 beds and was able to garner rental contracts and committed bookings for about 50% of its capacity within its first month of operation. Due to the strong market demand for workers accommodation and active preselling of bed spaces, it is expected that close to 70% of its available capacity will be secured with rental contracts and booking commitments by next quarter. Its capacity is expected to increase to 6,290 beds in Q once the second phase of its development is completed. The development of factory units is on track and is expected to receive its temporary occupancy permit towards the end of FY In Malaysia, the Group currently has four operational workers accommodation properties in Johor. The Group expects a steady growth in occupancy levels, contributing positively to profitability in FY2013. The Group s property in Senai, Johor, is currently undergoing construction, and is expected to commence the first phase of operation in Q with 3,000 beds. The Group s plot of land at Port Hedland is still undergoing the rezoning process as the local planning authorities at Port Hedland have reiterated its support for the project, and presented its arguments to the relevant authority in response to the objection raised by the Australian Environment Protection Authority. The Group will provide updates on significant developments that may arise. In accordance with its expansion plans, the Group continues to actively seek and explore acquisition and accommodation management opportunities both in Singapore and overseas. Optical Disc Business The operating environment for the Group s Optical Disc Business is likely to remain challenging with reduced market demand for physical storage media. The Group will carefully calibrate its factory capacity according to demand, and exercise prudent cost management strategies to ensure that the business continues to contribute positively to overall profitability and generate healthy cash flows to meet the Group s expansion needs. Page 10 of 12

11 11 Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? Not applicable (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Name of Dividend: Interim 1tier tax exempt dividend Dividend Type: Cash Dividend Amount per Share (in cents) 0.3 cent Tax Rate: Nil (c) Date Payable Not applicable (d) Books Closure Date Not applicable 12 If no dividend has been declared / recommended, a statement to that effect. Not applicable PART II ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT 13 Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year. Not applicable for first quarter announcement. 14 In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. As explained in note 8 15 Sales and Profit Breakdown Not applicable for first quarter announcement. 16 A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year Not applicable for first quarter announcement. Page 11 of 12

12 17 Interested Person Transactions ("IPTs") The Company does not have a shareholders' mandate for interested person transactions. 18 Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(13) in the format below. If there are no such persons, the issuer must make an appropriate negative statement. Not applicable for first quarter announcement. 19 Negative Assurance Confirmation by the Board On behalf of the Board of Directors of the Company, we, the undersigned, confirm that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the financial statements for the first quarter ended 31 March 2013 to be false or misleading in any material aspect. For and on behalf of the Board of Directors of CENTURION CORPORATION LIMITED Kong Chee Min Chief Executive Officer and Director Lee Kerk Chong Executive Director BY ORDER OF THE BOARD Kong Chee Min Chief Executive Officer and Director 15 May 2013 Page 12 of 12