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 2016 HIGHLIGHTS: ($ million) Q1 16 Q1 15 Growth Sales % Operating EBITDA % Profit before tax % Profit after tax % Basic earnings per share 1.1 cts 1.8 cts Interim dividend per share NIL 1 ct Challenge to maintain margins amid rising fixed cost pressures No interim dividend declared for the quarter Cash & Cash Equivalents and Fixed Income Investments as at 31 March 2016: $395 million (net $208 million) 1

2 REVIEW OF PERFORMANCE OF THE GROUP COMMENTARY ON CURRENT YEAR PROSPECTS Another quarter of declining sales across the core countries as markets remain soft and the challenge will be to maintain margins amid rising fixed cost pressure. Due to prolonged soft market conditions, we will also adopt a cautious approach to invest for growth and continue to rationalize unprofitable stores. We remain cautiously optimistic on the prospects for the remainder of the year with new products including umagic, uinfinity Luxe, udiva Classic and upamper2 to sustain our position in the market. Q1 sales were $138 million with a profit before tax of $11 million. OSIM outlets were reduced to 516 outlets and GNC/RichLife to 194 outlets, mainly from the exit of the Australian nutrition market. Meanwhile TWG Tea outlets remains unchanged at 52 outlets with a cautious approach to open new outlets for the year. 2

3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Amounts in Singapore dollars) 3 months ended 31 Mar Note $'000 $'000 Revenue 138, ,816 Other income 2,695 3,984 Changes in inventories of trading goods (3,146) 3,312 Trading goods purchased (33,974) (47,357) Employee benefits expense (33,100) (31,559) Depreciation and amortisation expenses (5,642) (5,517) Other operating expenses (53,751) (55,106) Interest expenses (1,260) (1,205) Interest income 662 1,170 Share of results of associates Profit before taxation 11,434 17,971 Taxation D (4,253) (4,935) Profit for the period 7,181 13,036 Other comprehensive income: Items that will not be reclassified to profit or loss Loss on fair value changes of available-for-sale financial assets (3,015) (341) Items that may be reclassified subsequently to profit or loss Foreign currency translation: Net effect of exchange difference during the period (4,374) 9,636 Other comprehensive income for the period, net of tax (7,389) 9,295 Total comprehensive income for the period (208) 22,331 Profit attributable to: Equity holders of the Company 7,842 13,522 Non-controlling interests (661) (486) 7,181 13,036 Total comprehensive income attributable to: Equity holders of the Company ,800 Non-controlling interests (640) (469) (208) 22,331 Earnings per share (cents) - Basic F Diluted F

4 REVIEW OF PERFORMANCE OF THE GROUP Revenue by Region Q1 FY 2016 Q1 FY 2015 Region $m % $m % North Asia 76 55% 78 52% South Asia 58 42% 63 42% Americ a/africa/europe/ Middle East/Oc eania 4 3% 9 6% Total % % Today OSIM operates in 23 countries around the world. For the 3 months ended 31 March 2016, sales remained soft due to the overall weaker environment. Profitability Profit before tax for Q1 was $11 million impacted by declining sales coupled with startup and operational cost pressures at TWG Tea. Profit after tax was $8 million. 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 11,434 17,971 Adjustments for: Share of results of associates (647) (433) Depreciation of fixed assets 3,248 3,116 Depreciation of investment properties 9 9 Amortisation of intangible assets 2,385 2,392 Loss on disposal of fixed assets Fair value gain on short term investments, net (323) (72) Fair value loss on long term investments, net 1,444 - Write-off of fixed assets 3 2 Rental income from investment properties (40) (9) Interest income (662) (1,170) Interest expenses 1,260 1,205 Provision for warranties 25 - Unrealised exchange loss Operating cash flows before working capital changes 18,877 23,188 (Increase) / decrease in: Stocks 3,262 (3,341) Trade debtors 9,688 4,565 Other debtors, deposits and prepaid operating expenses 4,029 1,617 Due from associates 440 1,668 Increase / (decrease) in: Trade creditors (8,955) (827) Other creditors and accruals (7,823) (7,457) Due to associates (5,316) 4,504 Cash flows generated from operations 14,202 23,917 Income tax paid, net of refund (2,900) (5,024) Net cash flow generated from operating activities 11,302 18,893 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 (1,217) (3,512) Proceeds from disposal of fixed assets - 32 Interest received 662 1,170 Rental income from investment properties 40 9 Acquisition of intangible assets (5) (68) Increase in investment securities, net (3,874) (917) Net cash flow used in investing activities (4,394) (3,286) Cash flows from financing activities Dividend paid to non-controlling interests (505) - Increase in bills payable to banks 590 3,192 Repayment of finance lease obligations - (3) Purchase of treasury shares - (398) Dividends paid on ordinary shares (Note B) (7,416) (7,744) Interest paid (124) (98) Net cash flow used in financing activities (7,455) (5,051) Net (decrease) / increase in cash and cash equivalents (547) 10,556 Net effect of exchange rates changes (3,775) 7,487 Cash and cash equivalents at beginning of period 358, ,566 Cash and cash equivalents at end of period (Note A) 353, ,609 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-15 $ 000 $ 000 Cash and bank balances 106, ,960 Fixed deposits 246, , , ,609 Note B: Dividend paid on ordinary shares During the period ended 31 March 2016, the paid dividend of $7,416,000 (31 March 2015: $7,744,000) which was declared out of profits in the previous year ended 31 December

8 REVIEW OF PERFORMANCE OF THE GROUP ( CASH FLOW ) Cash Flow Net cash and cash equivalent was negative $0.5m for the quarter. 3 months net cash flow from operating activities was $11.3 million. During the quarter, we invested $1.2m to open new and upgrade existing outlets and $3.9m in investment securities. Financing cash outflow also increased quarter on quarter, primarily due to lower utilisation of bills payable and dividends paid for the quarter. As at 31 March 2016, cash and cash equivalents of the stood at $354 million. Including fixed income investments of $42 million, total cash & cash equivalents and fixed income investments were $395 million. Global Network of Outlets Region 31-Mar Dec Sep Jun Mar-15 North Asia South Asia America/Africa/Europe/ Middle East/Oceania Total OSIM Outlets GNC/RichLife Outlets TWG Tea outlets Total We continue to monitor the performance of our outlets Total capital expenditure for the quarter was $1.2 million. 8

9 BALANCE SHEET (Amounts in Singapore dollars) Company 31-Mar Dec Mar Dec-15 Note $ 000 $ 000 $ 000 $ 000 Assets Non-current assets Fixed assets 30,709 33,148 2,069 1,923 Investment properties 4,889 5, Subisidiaries , ,782 Associates 22,164 22,380 5,231 5,231 Intangible assets 168, , Deferred tax assets 6,028 6, Long-term investments 21,030 23,794 21,030 23,794 Long-term receivables 9,768 10,362 1,215 1,070 Current assets 263, , , ,800 Stocks 75,015 78,160 4,253 5,854 Trade debtors 27,910 37,598 2,011 2,983 Other debtors, deposits and prepaid operating expenses 14,154 17,401 7,152 2,342 Due from associates Due from subsidiaries - - 3,250 7,898 Short-term investments 29,267 26,766 29,267 26,766 Fixed deposits 246, , , ,758 Cash and bank balances 106, ,651 43,514 41, , , , ,592 Total assets 763, , , ,392 Equity and liabilities Current liabilities Trade and other creditors 59,516 76,533 49,058 14,205 Deferred revenue 4,415 3, Provisions 6,660 6,780 3,097 3,077 Due to associates 12,736 18,052 9,127 13,919 Due to subsidiaries ,295 Dividend payable - 7,416-7,416 Provision for income tax 15,313 14,157 4,432 4,351 Bills payable to banks (unsecured) B 13,797 13,207 13,797 13, , ,139 80,041 86,470 Net current assets 387, , , ,122 9

10 BALANCE SHEET (Continued) (Amounts in Singapore dollars) Company 31-Mar Dec Mar Dec-15 Note $ 000 $ 000 $ 000 $ 000 Non-current liabilities Liability component of convertible bonds (unsecured) B 173, , , ,735 Provision for pension benefits Deferred tax liabilities 28,643 28, , , , ,162 Total liabilities 315, , , ,632 Net assets 447, , , ,760 Equity attributable to equity holders of the Company Share capital A 114, , , ,459 Treasury shares A (62,625) (62,625) (62,625) (62,625) Equity component of convertible bonds Accumulated profits 322, , , ,502 Enterprise expansion funds Capital reserves 28,460 28,460 23,112 23,112 Fair value adjustment reserve (7,337) (4,322) (7,337) (4,322) Revaluation reserve 2,724 2, Discount on purchase of noncontrolling interests' (NCIs') shares 2,093 2, Foreign currency translation reserve (3,416) , , , ,760 Non-controlling interests 49,778 50, Total equity 447, , , ,760 Total equity and liabilities 763, , , ,392 10

11 REVIEW OF PERFORMANCE OF THE GROUP ( BALANCE SHEET ) Balance Sheet Net Cash Position As at 31 March 2016, we were in a net cash position of $166 million. Including fixed income investments of $42 million, the total net cash and fixed income investments was $208 million. Net assets as at 31 March 2016 were $448 million. 11

12 STATEMENTS OF CHANGES IN EQUITY (Amounts in Singapore dollars) 2016 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 At 1 January ,459 (62,625) , ,460 2,724 2,093 (4,322) ,675 50, ,598 Profit for the period , ,842 (661) 7,181 Other comprehensive income Foreign currency translation (4,395) (4,395) 21 (4,374) Loss on fair value changes of availablefor-sale financial assets (3,015) - (3,015) - (3,015) Other comprehensive income for the period (3,015) (4,395) (7,410) 21 (7,389) Total comprehensive income for the period , (3,015) (4,395) 432 (640) (208) Contributions by and distributions to equity holders Dividend paid to NCI (505) (505) Total contributions by and distributions to equity holders (505) (505) At 31 March ,459 (62,625) , ,460 2,724 2,093 (7,337) (3,416) 398,107 49, ,885 12

13 STATEMENTS OF CHANGES IN EQUITY (Continued) (Amounts in Singapore dollars) Attributable to equity holders of the Company 2015 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 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 (341) - (341) - (341) Other comprehensive income for the period (341) 9,619 9, ,295 Total comprehensive income for the period , (341) 9,619 22,800 (469) 22,331 Contributions by and distributions to equity holders 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 13

14 STATEMENTS OF CHANGES IN EQUITY (Continued) (Amounts in Singapore dollars) 2016 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 (62,625) ,502 23,112 (4,322) 264,760 Profit for the period , ,949 Other comprehensive income Loss on fair value changes of availablefor-sale financial assets (3,015) (3,015) Other comprehensive income for the period (3,015) (3,015) Total comprehensive income for the period ,949 - (3,015) 7,934 At 31 March ,459 (62,625) ,451 23,112 (7,337) 272, 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 period , ,481 Other comprehensive income Loss on fair value changes of availablefor-sale financial asset (341) (341) Other comprehensive income for the period (341) (341) Total comprehensive income for the period ,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, ,320 14

15 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 (ii) Treasury shares and Company and Company 3 months ended 31 Mar 3 months ended 31 Mar Number of treasury shares ( 000) ($ 000) At beginning of year (37,558) (6,260) (62,625) (12,033) Acquired during the year - (209) - (398) At end of year (37,558) (6,469) (62,625) (12,431) 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, ,152 ($ 000) 114, ,459 Less: Treasury shares held (37,558) (6,469) (62,625) (12,431) Share capital excluding treasury shares 741, ,683 51, ,028 As at 31 March 2016, total number of issued shares excluding treasury shares was 741,594,000 (31 December 2015: 741,594,000). 15

16 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-15 $'000 $'000 $'000 $'000 Bills payable to banks (unsecured) 13,797 13,207 13,797 13,207 13,797 13,207 13,797 13,207 Amount repayable after one year Liability component of convertible bonds (unsecured) 173, , , , , , , ,735 As at 31 March 2016, the outstanding number of convertible debt securities that may be issued as shares was 48,226,950 (31 December 2015: 48,226,950) at a conversion price of S$3.525 (31 December 2015: S$3.525). 16

17 NOTES TO THE FINANCIAL STATEMENTS (Continued) C. NET ASSET VALUE PER SHARE Company 31-Mar Dec Mar Dec-15 Net asset value per share based on existing issued share capital as at end of respective year 51 cents 51 cents 35 cents 34 cents D. TAXATION This comprises: 3 months ended 31 Mar $'000 $'000 Current tax - Current year 4,132 5,522 Deferred tax - Movement in temporary differences (182) (911) - Under provision in respect of previous year Income tax expenses recognised in profit or loss 4,253 4,935 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

18 NOTES TO FINANCIAL STATEMENTS (Continued) F. EARNINGS PER SHARE The weighted average number of ordinary shares is determined as follows: Basic earnings per share: Weighted average number of shares used in calculation of basic earnings per share 3 months ended 31 Mar No. of shares No. of shares ('000) ('000) 741, ,683 Basic earnings per share (c ents) Diluted earnings per share: Weighted average number of shares used in calculation of diluted earnings per share 741, ,683 Diluted earnings per share (cents) Note: Convertible bonds were not included in the calculation of diluted earnings per share because they are antidilutive for the periods presented. 18

19 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 NIL Dividend Type: NA (ii) Previous corresponding year Name of Dividend: Dividend Rate Date Paid 1 st Interim 1 cent per ordinary share 8 July 2015 (iii) Book Closure Date for Interim Dividend NA (iv) Date Payable NA 19

20 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 utilised as follows: $'000 Net proceeds of the Convertible Bonds 167,970 Balance of proceeds as at 1 January ,454 Finance Strategic Acquisitions (1,696) Enhancment of well-being and lifestyle business (336) Use of proceeds during the year (2,032) Balance of proceeds as at 31 March ,422 20

21 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 2015, except for: (i) 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. (ii) the adoption of FRS 109 Financial Instruments. FRS 109 replaces the provisions of FRS 39 Financial Instruments: Recognition and Measurement that relate to the classification and measurement of financial assets and impairment of financial assets. Retrospective application of FRS 109 is required. Management has determined that there is no impact arising from the retrospective application. AUDIT The figures have not been audited or reviewed by the Company s auditor. 21

22 CONFIRMATION BY THE BOARD We, Ron Sim and Charlie Teo, 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 2016 financial results to be false or misleading. 22