OSIM INTERNATIONAL LTD

Transcription

1 OSIM INTERNATIONAL LTD (Incorporated in the Republic of Singapore) (Registration No.: N) ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE QUARTER ENDED 31 MARCH 2015 HIGHLIGHTS: ($ million) Q1 15 Q1 14 Growth Sales % Operating EBITDA % Profit before tax % Profit after tax % Basic earnings per share 1.8cts 4.0cts Interim dividend per share 1ct 1ct Despite challenging quarter, maintain gross profit margin and cash generative business Continue to invest for growth supported by a strong balance sheet Q1 Operating cash flow of $18 million Interim dividend of 1 cent per share Cash & Cash Equivalents and Fixed Income Investments as at 31 March 2015: $482 million (net $292 million) 1

2 REVIEW OF PERFORMANCE OF THE GROUP COMMENTARY ON CURRENT YEAR PROSPECTS This has been a challenging quarter where retail sales across the core countries has been soft and there have been no new major OSIM product launches. Despite these challenges, our dominant brand has enabled us to maintain a stable gross margin and highly cash generative business. We are continuing to invest for growth supported by a strong balance sheet. Q1 sales was $150 million and Q1 profit before tax of $18 million. We have 560 OSIM outlets. China continues to be our No.1 market where we are in 45 cities with 252 outlets. New products including uinfinity Luxe, udiva, uhip, usqueez Air, utrek and ushape Music have sustained our dominant position in the market. We have just launched a new massage chair umagic in April with favourable response and will be introducing more innovative products this year. Our GNC outlets are doing well. We have a total of 233 GNC/RichLife outlets in ONI Global and we are growing our sales through new product launches. TWG Tea has 44 outlets. We are targeting to open about 15 new outlets this year. With the upcoming planned new product launches we remain positive about the outlook for the remainder of the year. The directors are pleased to recommend an interim dividend of 1 cent per share. 2

3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Amounts in Singapore dollars) 3 months ended 31 Mar Note $'000 $'000 Revenue 149, ,615 Other income 3,984 3,707 Changes in inventories of trading goods 3,312 4,061 Trading goods purchased (47,357) (54,680) Employee benefits expense (31,559) (30,438) Depreciation and amortisation expenses (5,517) (5,428) Other operating expenses (55,106) (53,416) Interest expenses (1,205) (1,364) Interest income 1,170 1,292 Share of results of associates Profit before taxation 17,971 36,826 Taxation D (4,935) (7,837) Profit for the period 13,036 28,989 Other comprehensive income: Items that may be reclassified subsequently to profit or loss Loss on fair value changes of available-for-sale financial asset (341) - Foreign currency translation: Net effect of exchange difference during the year 9,636 (5,471) Other comprehensive income for the period, net of tax 9,295 (5,471) Total comprehensive income for the period 22,331 23,518 Profit attributable to: Equity holders of the Company 13,522 28,844 Non-controlling interests (486) ,036 28,989 Total comprehensive income attributable to: Equity holders of the Company 22,800 23,373 Non-controlling interests (469) ,331 23,518 Earnings per share (cents) - Basic F Diluted F

4 REVIEW OF PERFORMANCE OF THE GROUP Profit in Q Q1 sales were $150 million due to softer markets across the region. Profit before tax was $18 million impacted by startup and operational cost pressures at TWG Tea and increases in wages and rental. Profit after tax was $14 million. Revenue by Region Q1 FY 2015 Q1 FY 2014 Region $m % $m % North Asia 78 52% 91 53% South Asia 63 42% 73 42% Americ a/afric a/europe/ Middle East/Oceania 9 6% 9 5% Total % % Today OSIM operates in 22 countries around the world. For the 3 months ended 31 March 2015, sales were softer due to the overall weaker environment. 4

5 CONSOLIDATED STATEMENT OF CASH FLOW (Amounts in Singapore dollars) 3 months ended 31 Mar $ 000 $ 000 Cash flows from operating activities Profit before taxation 17,971 36,826 Adjustments for: Share of results of associates (433) (477) Depreciation of fixed assets 3,125 3,055 Amortisation of intangible assets 2,392 2,373 Loss on disposal of fixed assets 58 - Fair value gain on short term investments, net (72) (756) Reversal of impairment loss on quoted equity shares (341) - Write-off of fixed assets 2 2 Dividend income from quoted equity shares - (152) Interest income (1,170) (1,292) Interest expenses 1,205 1,364 Operating cash flows before working capital changes 22,737 40,943 (Increase) / decrease in: Stocks (3,341) (3,991) Trade debtors 4,707 1,756 Other debtors, deposits and prepaid operating expenses 3,143 (5,040) Increase / (decrease) in: Trade and other creditors and provisions (4,375) (11,267) Deferred revenue Cash flows generated from operations 23,466 23,065 Income tax paid, net of refund (5,024) (3,117) Net cash flow generated from operating activities 18,442 19,948 5

6 CONSOLIDATED STATEMENT OF CASH FLOW (Continued) (Amounts in Singapore dollars) Cash flows from investing activities 3 months ended 31 Mar $ 000 $ 000 Purchase of fixed assets (3,512) (1,431) Proceeds from disposal of fixed assets 32 - Interest received 1,170 1,292 Dividend income from investment securities Acquisition of intangible assets (68) (104) Increase in investment securities, net (917) (674) Net cash flow used in investing activities (3,295) (765) Cash flows from financing activities Acquisition of non-controlling interests - (4) Increase / (decrease) in bills payable to banks 3,192 (2,875) Repayment of bank loans - (6,030) Repayment of finance lease obligations (3) (4) Purchase of treasury shares (398) - Dividends paid on ordinary shares (Note B) (7,744) (7,227) Interest paid (98) (199) Net cash flow used in financing activities (5,051) (16,339) Net increase in cash and cash equivalents 10,096 2,844 Net effect of exchange rates changes 7,947 (4,972) Cash and cash equivalents at beginning of period 427, ,347 Cash and cash equivalents at end of period (Note A) 445, ,219 6

7 CONSOLIDATED STATEMENT OF CASH FLOW (Continued) (Amounts in Singapore dollars) Note A: Cash and cash equivalents Cash and cash equivalents included in the consolidated statement of cash flow comprise the following balance sheet amounts: 31-Mar Mar-14 $ 000 $ 000 Cash and bank balances 141, ,778 Fixed deposits 303, , , ,219 Note B: Dividend paid on ordinary shares During the period ended 31 March 2015, the paid $7,744,000 (31 March 2014: $7,227,000) which was declared out of profit in the previous year ended 31 December

8 REVIEW OF PERFORMANCE OF THE GROUP ( CASH FLOW ) Cash Flow 3 months net cash flow from operating activities was $18 million. During the quarter, we invested $3.5 million to open new outlets, upgrade existing outlets and expand TWG Tea outlets in North Asia. Financing cash outflow decreased primarily because there was a bank loan repayment in Q As at 31 March 2015, cash and cash equivalents of the stood at $446 million. Including fixed income investments of $36 million, total cash & cash equivalents and fixed income investments were $482 million. Global Network of Outlets Region 31-Mar Dec Sep Jun Mar-14 North Asia South Asia America/Africa/Europe/ Middle East/Oceania Total OSIM Outlets GNC/RichLife Outlets TWG Tea outlets Total We monitor continuously the performance of our outlets. Total capital expenditure for the quarter was $3.5 million. 8

9 BALANCE SHEETS (Amounts in Singapore dollars) Company 31-Mar Dec Mar Dec-14 Note $ 000 $ 000 $ 000 $ 000 Assets Non-current assets Fixed assets 32,866 31,370 2,170 2,469 Investment properties 5,160 5, Subisidiaries , ,762 Associates 19,696 18,411 2,657 2,657 Intangible assets 178, , Deferred tax assets 5,145 4, Long-term investments 15,264 15,264 15,264 15,264 Long-term receivables 9,183 10,172 1, Current assets 265, , , ,096 Stocks 74,956 71,644 6,612 5,205 Trade debtors 38,073 42,637 3,911 4,276 Other debtors, deposits and prepaid operating expenses 14,349 14,977 5,839 3,286 Due from associates 1,125 2,793 1,125 2,793 Due from subsidiaries - - 2,737 10,112 Short-term investments 29,827 28,838 29,827 28,838 Fixed deposits 303, , , ,729 Cash and bank balances 141, ,234 46,096 58, , , , ,216 Total assets 869, , , ,312 Equity and liabilities Current liabilities Trade and other creditors and 74,593 83,489 14,431 25,542 provisions Deferred revenue 4,793 4, Due to associates 25,590 21,085 18,571 16,686 Due to subsidiaries ,559 Dividend payable - 7,744-7,744 Provision for income tax 25,268 24,416 7,043 6,184 Obligations under finance leases B current portion Bills payable to banks (unsecured) B 20,343 17,152 20,343 17, , ,101 61,218 79,867 Net current assets 453, , , ,349 9

10 BALANCE SHEETS (Continued) (Amounts in Singapore dollars) Company 31-Mar Dec Mar Dec-14 Note $ 000 $ 000 $ 000 $ 000 Non-current liabilities Liability component of convertible B bonds (unsecured) 169, , , ,259 Obligations under finance leases non-current portion B Provision for pension benefits 2,690 2, Deferred tax liabilities 33,004 33, , , , ,867 Total liabilties 355, , , ,734 Net assets 513, , , ,578 Equity attributable to equity holders of the Company Share capital A 114, , , ,459 Treasury shares A (12,431) (12,033) (12,431) (12,033) Equity component of convertible bonds Accumulated profits 320, , , ,065 Enterprise expansion funds Capital reserves 28,460 28,460 23,112 23,112 Fair value adjustment reserve Revaluation reserve 2,724 2, Discount on purchase of noncontrolling interests' (NCIs') shares 2,142 2, Foreign currency translation reserve 3,672 (5,947) , , , ,578 Non-controlling interests 53,098 53, Total equity 513, , , ,578 Total equity and liabilities 869, , , ,312 10

11 REVIEW OF PERFORMANCE OF THE GROUP ( BALANCE SHEET ) Strengthened Balance Sheet Net Cash Position As at 31 March 2015, we were in a net cash position of $256 million. Including fixed income investments of $36 million, the total net cash and fixed income investments was $292 million. Net assets as at 31 March 2015 were $514 million. The Board is pleased to propose an interim dividend of 1 cent per share. 11

12 STATEMENTS OF CHANGES IN EQUITY (Amounts in Singapore dollars) Attributable to equity holders of the Company 2015 Equity component Discount on Foreign of Enterprise purchase of Fair value currency Non- Share Treasury convertible Accumulated expansion Capital Revaluation NCIs' adjustment translation controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 January ,459 (12,033) , ,460 2,724 2, (5,947) 438,373 53, ,940 Profit for the period , ,522 (486) 13,036 Other comprehensive income Foreign currency translation ,619 9, ,636 Loss on fair value changes of availablefor-sale financial asset Other comprehensive income for the period Total comprehensive income for the period Contributions by and distributions to equity holders (341) - (341) - (341) (341) 9,619 9, , , (341) 9,619 22,800 (469) 22,331 Purchase of treasury shares - (398) (398) - (398) Total contributions by and distributions to equity holders - (398) (398) - (398) At 31 March ,459 (12,431) , ,460 2,724 2,142-3, ,775 53, ,873 12

13 STATEMENTS OF CHANGES IN EQUITY (Continued) (Amounts in Singapore dollars) Attributable to equity holders of the Company 2014 Equity component of convertible Premium on purchase of NCIs' Foreign currency translation Enterprise Fair value Non- Share Treasury Accumulated expansion Capital Revaluation adjustment controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 January ,036 (36,962) 3, , ,206 2,724 (14,532) 341 (7,156) 271,227 72, ,924 Profit for the period , , ,989 Other comprehensive income Foreign currency translation (5,471) (5,471) - (5,471) Other comprehensive income for the period (5,471) (5,471) - (5,471) Total comprehensive income for the period , (5,471) 23, ,518 Contributions by and distributions to equity holders Lapse of employees share options (5) Treasury shares reissued pursuant to convertible bonds conversion - 23,898 (1,161) , ,895-36,895 Total contributions by and distributions to equity holders - 23,898 (1,161) 5-14, ,895-36,895 13

14 STATEMENTS OF CHANGES IN EQUITY (Continued) (Amounts in Singapore dollars) Attributable to equity holders of the Company 2014 (cont'd) Equity component of convertible Discount on purchase of NCIs' Foreign currency translation Enterprise Fair value Non- Share Treasury Accumulated expansion Capital Revaluation adjustment controlling Total capital shares bonds profits funds reserves reserve shares reserve reserve Total interests equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Changes in ownership interests in subsidiaries that do not result in a loss of control Discount on purchase of NCIs' shares , ,926 (16,926) - Acquisition of NCIs' shares (3) (3) Total changes in ownership interests in subsidiaries that do not result in a loss of control Total transactions with equity holders in their capacity as equity holders , ,926 (16,929) (3) - 23,898 (1,161) 5-14,153-16, ,821 (16,929) 36,892 At 31 March ,036 (13,064) 2, , ,359 2,724 2, (12,627) 348,421 55, ,334 14

15 STATEMENTS OF CHANGES IN EQUITY (Continued) (Amounts in Singapore dollars) 2015 Company Share capital Treasury shares Equity component of convertible Accumulated bonds profits Capital reserves Fair value adjustment reserve Total equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 January ,459 (12,033) ,065 23, ,578 Profit for the year , ,481 Other comprehensive income Loss on fair value changes of availablefor-sale financial asset Other comprehensive income for the year Total comprehensive income for the year (341) (341) (341) (341) ,481 - (341) 1,140 Contributions by and distributions to equity holders Purchase of treasury shares - (398) (398) Total transactions with equity holders in their capacity as equity holders - (398) (398) At 31 March ,459 (12,431) ,546 23, , Company Share capital Treasury shares Equity component of convertible Accumulated bonds profits Capital reserves Fair value adjustment reserve Total equity $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 At 1 January ,036 (36,962) 3,773 31, ,958 Profit for the year , ,476 Contributions by and distributions to equity holders Lapse of employees' share options (5) - - Treasury shares reissued pursuant to - 23,898 (1,161) - 14,158-36,895 convertible bonds conversion Total transactions with equity holders in their capacity as equity holders - 23,898 (1,161) 5 14,153-36,895 At 31 March ,036 (13,064) 2,612 38,393 15, ,329 15

16 NOTES TO THE FINANCIAL STATEMENTS (Amounts in Singapore dollars) A. SHARE CAPITAL (i) Share capital and Company and Company 3 months ended 31 Mar 3 months ended 31 Mar Number of ordinary shares Issued and fully paid up ( 000) ($ 000) Issued and fully paid At beginning and end of year 779, , ,459 65,036 (ii) Treasury shares Number of treasury shares ( 000) ($ 000) At beginning of year (6,260) (30,544) (12,033) (36,962) Acquired during the financial year (209) - (398) - Treasury shares reissued pursuant to conversion of convertible bonds and Company and Company 3 months ended 31 Mar 3 months ended 31 Mar - 19,749-23,898 At end of year (6,469) (10,795) (12,431) (13,064) and Company and Company 3 months ended 31 Mar 3 months ended 31 Mar Number of shares excluding treasury shares Issued and fully paid Share capital ( 000) 779, ,264 ($ 000) 114,459 65,036 Less: Treasury shares held (6,469) (10,795) (12,431) (13,064) Share capital excluding treasury shares 772, , ,028 51,972 As at 31 March 2015, total number of issued shares excluding treasury shares was 772,683,000 (31 December 2014: 722,892,000). 16

17 NOTES TO THE FINANCIAL STATEMENTS (Continued) B. GROUP BORROWINGS AND DEBT SECURITIES Amount repayable in one year or less, or on demand Company 31-Mar Dec Mar Dec-14 $'000 $'000 $'000 $'000 Obligations under finance lease (secured) Bills payable to banks (unsecured) 20,343 17,152 20,343 17,152 20,360 17,170 20,343 17,152 Amount repayable after one year Obligations under finance lease (secured) Liability component of convertible bonds (unsecured) 169, , , , , , , ,259 As at 31 March 2015, the outstanding number of convertible debt securities that may be issued as shares was 48,226,950 (31 December 2014: 48,226,950) at a conversion price of S$3.525 (31 December 2014: S$3.525). 17

18 NOTES TO THE FINANCIAL STATEMENTS (Continued) C. NET ASSETS VALUE PER SHARE Company 31-Mar Dec Mar Dec-14 Net assets value per share based on existing issued share capital as at end of respective year 59 cents 56 cents 30 cents 30 cents D. TAXATION This comprises: 3 months ended 31 Mar $'000 $'000 Current tax - Current period 5,522 7,484 Deferred tax - Movement in temporary differences (911) 58 - (Over) / under provision in respect of previous period Income tax expenses recognised in profit or loss 4,935 7,837 E. INTERESTED PERSON TRANSACTIONS Aggregate value of all interested person transactions conducted under shareholder's mandate pursuant to Rule 920 (excluding transactions < $100,000) 3 months ended 31 Mar $'000 $'000 Sales FK Marketing Ltd

19 NOTES TO FINANCIAL STATEMENTS (Continued) F. EARNINGS PER SHARE The weighted average number of ordinary shares is determined as follows: Basic earnings per share: 3 months ended 31 Mar No. of shares No. of shares ('000) ('000) Weighted average number of shares used in calculation of basic earnings per share 772, ,659 Basic earnings per share (cents) Diluted earnings per share: Weighted average number of shares used in calculation of basic earnings per share 772, ,659 Effects of dilution: - Share options Convertible bonds 48,227 57,232 Weighted average number of shares used in calculation of diluted earnings per share 820, ,898 Diluted earnings per share (cents) Adjusted profit used for calculation of diluted earnings per share: 3 months ended 31 Mar $'000 $'000 Profit attributable to equity holders 13,522 28,844 Add: Interest expense for convertible bonds 1,107 1,165 Adjusted profit used for calculation of diluted earnings per share 14,629 30,009 19

20 NOTES TO FINANCIAL STATEMENTS (Continued) G. DIVIDENDS Details of the dividend for present year are appended below: (i) Present Year Name of Dividend: Dividend Rate Date Payable 1 st Interim 1 cent per ordinary share 8 July 2015 Dividend Type: Cash (ii) Previous corresponding year Name of Dividend: Dividend Rate Date Paid 1 st Interim 1 cent per ordinary share 24 July 2014 (iii) Book Closure Date for Interim Dividend The Share Transfer Books and Register of Members of OSIM International Ltd ( the Company ) will be closed on 5pm, 1 July (iv) Date Payable The 1 st interim dividends will be paid on 8 July

21 NOTES TO FINANCIAL STATEMENTS (Continued) H. USE OF PROCEEDS The proceeds of S$167,970,000 (net) from the issue of Convertible Bonds due 2019 have been utilized as follows: $'000 Net proceeds of the Convertible Bonds 167,970 Balance of proceeds as at 1 January ,156 Enhancment of well-being and lifestyle business (2,233) Use of proceeds during the period (2,233) Balance of proceeds as at 31 March ,923 21

22 ACCOUNTING POLICIES The has applied the same accounting policies and methods of computation in the preparation of financial statements for the current reporting period compared with the audited financial statements as at 31 December 2014, except for the adoption of the Financial Reporting Standards (FRS) and INT FRS that are mandatory for financial years beginning on or after 1 January The adoption of these FRS and INT FRS has no significant impact on the financial statements. AUDIT The figures have not been audited or reviewed by the Company s auditor. 22

23 CONFIRMATION BY THE BOARD We, Ron Sim and Peter Lee, being two directors of OSIM International Ltd (the Company), do hereby confirm on behalf of the directors of the Company 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 1 st quarter 2015 financial results to be false or misleading. 23