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Profit & Loss
Revenue had decreased by S$4.2 million to S$5.1 million for the six months period ended 31 December 2009. The decrease in revenue was mainly due to the economic downturn and all our sales were affected.
The Group's gross profit margin had decreased from 20.4% to 10.7%. The decrease in the Group's gross profit margin was mainly due to the economic downturn.
The Group had incurred a loss from continuing operations of S$1.81 million for this financial period as compared to a loss of S$0.9 million in the last corresponding financial period. The main reason is due to the drop in gross profit margin despite the reduction of the following expenses:
a) A decrease in distribution and selling expenses
Distribution & selling expenses had decreased by S$0.66 million to S$0.17 million which was mainly due to cost cutting measures implemented.
b) A decrease in administrative expenses
Administrative expenses had decreased by S$0.32 million to S$1.39 million for this financial period. The decrease was mainly due to the cost cutting measures implemented by the Group during the financial period. As part of the cost cutting measures, the Group had reduced Directors' remuneration, Directors' fee, as well as not providing bonus for calendar year 2009 and further reducing group headcount.
c) A decrease in other operating income
Other operating income had decreased by S$0.73 million to S$0.12 million. The decrease was due to the drop of scrap sales from S$0.60 million to $0.10 million and the non-occurence of S$0.10 million rental income from an investment property at 20 Tech Park Crescent which was sold in Dec 2008.
d) A decrease in other operating expenses
Other operating expenses had decreased by S$0.44 million to S$0.57 million. The decrease is due to the lower foreign exchange loss suffered in the current period. Depreciation charge was also lower in the current period as some property, plant and equipment were fully impaired in Jun 2009.
The Group's non-current assets had decreased by S$0.93 million to S$1.46 million as at 31 December 2009. The decrease was mainly due to depreciation charged which leads to the decrease in the net book value of the Group's property, plant and equipment and the disposal of investment in an associated company.
The Group's current assets had increased by S$1.49 million to S$9.44 million as at 31 December 2009. The increase in the Group's current assets was mainly due to a S$0.57 million increase in Group Trade receivables as there was increase in sales in the tray cleaning and manufacturing businesses in Singapore towards the end of 2009. The increase was also due to a S$0.93 million increase in other receivables mainly due to advances to suppliers and a S$0.32 million increase in cash and bank balances as at 31 December 2009 mainly due to an advance from customer for order of trucks.
The Group's current liabilities had increased by S$2.03 million to S$7.06 million as at 31 December 2009. The increase in the Group's current liabilities was mainly due to a S$1.19 million increase in trade & other payables (an advance from customer), a S$0.51 million increase in loan from directors, a S$0.17 million increase in amount due to related parties and a S$0.16 million increase in current loans and borrowings.
The Group's non-current liabilities had decreased by S$1.5 million to S$0.2 million as at 31 December 2008. The decrease in the Group's non-current liabilities was mainly due to a S$1.4 million decrease in non-current loans and borrowings as at 31 December 2009 as the Group has paid off most of its non-current portion of hire purchase creditors.
The Group's cash and cash equivalents as at 31 December 2009 had decreased by S$0.78 million to S$0.93 million as compared to as at 31 December 2008. The decrease was mainly due to the absence of S$3.20 million proceed from disposal of investment property, the repayment of S$1.62 million loans and the cash & cash equivalents at the beginning of period was lesser by S$0.60 million.
While the Group's tray cleaning business remains challenging in the 2nd half of this financial year especially in China due to global effect of financial crisis, the Group will continue to implement more cost-cutting measures. The tray cleaning business in Singapore and Thailand is improving after the aftermath of the global financial crisis, and swift actions will be taken to streamline the China operation.
Singapore has committed on the huge reduction of CO2 emission going forward, and directions include emission reduction of transportation vehicles. The Group intends to improve the business of CNG powered vehicles which can cut down CO2 emission drastically which is to take advantage of the directions given. However, the cost of Certificate of Entitlement to register the CNG powered vehicles may affect the promotion on the sales of such vehicles. As such, the Group will be placing a lot of emphasis to get the industries to use CNG off-the-road vehicles (i.e. CNG forklifts, and towing tractors) which the Group has been developing.
As there are signs of the improvement in the 1st half of this financial year 2010 over the 2nd half of last financial year, the Company would stride harder for improvement.
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