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Unaudited Financial Statements for the 3rd Quarter and Nine Months Ended 31 March 2018

Financials Archive

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Profit and Loss Statements

Profit and Loss

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Balance sheet

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Review of Performance

Third quarter ended 31 March 2018 ("3Q18") vs third quarter ended 31 March 2017 ("3Q17")

Group revenue of USD 83.97 million was 69.1% higher than USD 49.67 million in 3Q17. This was attributable to a substantial increase in revenue from electronics manufacturing services, in addition to revenue from property sales of Concerto apartment units.

Profit after tax of USD 1.95 million was lower than 3Q17 of USD 5.42 million. Profit contribution from electronics manufacturing services had risen on the back of increased sales. Higher profit margins were derived from sales of Concerto apartment units in 3Q18, as compared to sales of Unison on Tenth apartment units in 3Q17. Results in the current quarter were impacted by a net drop in mark-to-market valuation of financial investments of USD 1.92 million, as compared to an increase of USD 1.80 million in fair valuation in 3Q17, and foreign exchange loss of USD 0.61 million in 3Q18, mainly due to revaluations against a weaker US dollar. Depreciation expense had risen due to factory equipment acquired. Other expenses were relatively higher in 3Q18 as a provision was written back during the prior quarter. Finance costs related to leveraged unquoted fund investments.

Other comprehensive income of USD 0.11 million comprised foreign exchange translation gains that resulted from stronger Singapore dollar and Renminbi against US dollar in 3Q18, partially offset by mark-to-market loss on available-for-sale financial assets.

Earnings per share in 3Q18 was US cents 0.11, lower than US cents 0.52 in 3Q17.

Share of results of associates

Share of results of associates recorded a loss of USD 0.70 million in 3Q18. Finbar Group Limited's results for half year ended 31 December 2017 reflected a loss as it was adversely impacted by a downward revaluation of investment property. Share of Pacific Star Development Limited's profit for the current quarter was offset by amortization of fair valuation uplift of the Puteri Cove development on acquisition of investment in associate.

Nine months ended 31 March 2018 ("9M18") vs nine months ended 31 March 2017 ("9M17")

Group revenue of USD 264.20 million was 69.2% higher than USD 156.18 million in 9M17. Significant increase in revenue from electronics manufacturing services and property sales were achieved in 9M18. This contributed to higher profit after tax of USD 9.63 million, as compared to 9M17 of USD 8.83 million.

Operating profits were partially offset by the mark-to-market loss on financial assets of USD 2.43 million, as compared to an increase in fair valuation of USD 3.07 million in 9M17. Increase in employee benefits expense of USD 2.55 million related to provision for staff cost.

Other comprehensive income of USD 3.76 million was mainly attributable to the foreign currency translation gain of USD 3.56 million, resulting from weaker US dollar in the current period.

Review of financial position and cash flow

As at 31 March 2018, the Group continued to be in a healthy position. Net assets attributable to equity holders of the Company amounted to USD 285.16 million, as compared to USD 295.40 million as at 30 June 2017.

Group total assets of USD 409.01 million as at 31 March 2018 had decreased by USD 37.33 million from 30 June 2017. There was a decrease in non-current assets of USD 29.09 million as other receivables were reduced by the full repayment of property development loan and a reclassification of loan that is due in less than a year. Current assets had decreased by USD 8.23 million, mainly due to lower stock held of Concerto apartment units and reduced cash balance due to operating activities and FY2017 dividend payment. This was partly offset by increase in electronics manufacturing services' inventories and trade receivables, quoted equities acquired and a loan reclassification from non-current assets.

Group total liabilities of USD 101.54 million as at 31 March 2018 had decreased by 22.2% from 30 June 2017. Decrease in trade and other payables of USD 27.23 million mainly related to lower accrual of property development costs, partially offset by an increase in electronics manufacturing services' trade payables.

Net asset value per share was US cents 30.72, as compared to US cents 31.82 as at 30 June 2017.

Commentary

Despite the growth in manufacturing activities into the current quarter, the Group maintains a cautious business outlook given the implications of ongoing trade tension between the US and China. Moderate improvement in Perth property market sentiment may generate momentum in sales activities.

The directors 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.