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Unaudited Financial Statements for the 2nd Quarter and Half Year Ended 31 December 2017

Financials Archive

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Profit and Loss Statements

Profit and Loss

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(1): Comparatives have been restated to conform with current year's presentation.

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Balance sheet

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Review of Performance

Second quarter ended 31 December 2017 ("2Q18") vs second quarter ended 31 December 2016 ("2Q17")

Group revenue of USD 95.54 million was 90.3% higher than USD 50.20 million in 2Q17. This was attributable to increase in revenue from electronics manufacturing services and property sales.

Profit after tax of USD 3.24 million was significantly higher than 2Q17 of USD 1.18 million. Increase in profit contribution from electronics manufacturing services was due to higher sales volume. Higher margins were achieved by sales of Concerto apartment units in 2Q18 as compared to margins derived from sales of Unison on Tenth apartment units in 2Q17. Mark-to-market and impairment losses on financial investments amounted to USD 0.64 million.

Employee benefits and other expenses increased in 2Q18 due to higher provision for staff cost and accrual of expenses respectively. Other losses of USD 0.28 million resulted mainly from unrealised foreign exchange losses. Other comprehensive income of USD 0.93 million comprised mainly foreign exchange translation gains from a stronger Singapore dollar against US dollar.

Earnings per share in 2Q18 was US cents 0.25, as compared to US cents 0.06 in 2Q17.

Share of results of associate

Share of results of associate recorded a loss of USD 0.14 million in 2Q18. This related to share of Pacific Star Development Limited's profit for the current quarter, offset by amortization of Puteri Cove project valuation's uplift on acquisition of investment in associate. Share of results in relation to Finbar Group Limited was not recorded in the current quarter as its financial results for half year ended 31 December 2017 was not available on the Australian Securities Exchange at the date of this announcement.

Half year ended 31 December 2017 ("1H18") vs half year ended 31 December 2016 ("1H17")

Group revenue of USD 180.23 million was 69.2% higher than USD 106.51 million in 1H17. This was attributable to an increase in electronics manufacturing services revenue of 59.5% and revenue from sales of Concerto apartment units in 1H18.

Profit after tax of USD 7.68 million was significantly higher than 1H17 of USD 3.41 million. This stemmed from an increase in electronics manufacturing services business activities. In addition, higher property profit was derived in 1H18 from 20% of Concerto apartment units sold and ongoing sales of Unison on Tenth units. Other operating expenses were reduced, in line with estate management activities. Valuation of financial investments were impacted by reduction in fair value of USD 0.51 million and impairment provision of USD 0.3 million.

Increase in employee benefits expense of 48.6% related to provision for staff cost. Higher depreciation expense resulted from factory equipment acquired. Other expenses of USD 1.76 million was lower due to the absence of restructuring costs provided for in 1Q17. Other gains amounted to USD 0.42 million in 1H18, as compared to other losses in 1H17 of USD 0.99 million, due to lower foreign exchange loss. Finance cost in 1H18 related to leveraged unquoted fund investments. Other comprehensive income of USD 3.65 million was attributed to foreign exchange translation gains from stronger Singapore and Australian dollars against US dollar.

Review of financial position and cash flow

As at 31 December 2017, the Group continued to be in a healthy position. Net assets attributable to equity holders of the Company decreased by 3.8% to USD 284.14 million.

Group total assets of USD 421.59 million as at 31 December 2017 had decreased by USD 24.74 million from 30 June 2017. There was a decrease in non-current assets of USD 18.69 million as other receivables were reduced by property development loan repayments and a reclassification to current assets. Decrease in current assets amounted to USD 6.05 million. Sales achieved in 1H18 lowered stock held in relation to Concerto and Unison on Tenth by USD 21.33 million. This decrease was offset by a total increase of USD 31.64 million in relation to additional investments in quoted equities, raised levels of electronic manufacturing services' inventory and trade receivables, as well as a reclassification of loan from non-current other receivables of USD 8.16 million. Cash and cash equivalents had decreased by 16.0% to USD 86.27 million. Net cash outflows resulted mainly from FY2017 dividend payments and an increase in operating activities, partly offset by property development loan repayments.

Group total liabilities of USD 116.18 million as at 31 December 2017 had decreased by 11.0% from 30 June 2017. A decrease in accrual for property development costs was partially offset by an increase in electronics manufacturing services' trade and other payables.

Net asset value per share was US cents 30.61, lower than US cents 31.82 as at 30 June 2017.

Commentary

While property sales are likely to benefit from moderate improvement in Perth property market conditions, demand for electronic manufacturing services may be affected by geopolitical tensions, increased trade regulatory barriers and tightening of US monetary policies. As such, the directors remain cautiously optimistic about the economic outlook in 2018, and will continue to exercise prudence when considering new investments.

Save as disclosed herein, there are no known material factors or events which may affect the earnings of the Group between this date up to which the report refers and the date on which the report is issued.