Mencast
Financials
Unaudited financial Statement And Dividend Announcement For The Financial Year Ended 31 December 2011
Financials Archive
Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.
Consolidated Statement Of Comprehensive Income
Balance Sheet
Review of Performance
REVIEW OF INCOME STATEMENT OF THE GROUP
FY2011 vs FY2010
Revenue
Group's revenue increased by approximately S$24.3 million or 75.9% from S$32.0 million in FY2010 to S$56.3 million in FY2011. The increase was mainly due to the maiden revenue contribution of approximately S$29.2 million in aggregate from the newly acquired subsidiaries, TGEM and Unidive, under Marine Services business division of S$11.2 million and Offshore & Engineering Services business division of S$18.0 million respectively.
The contribution from the newly acquired subsidiaries was offset by the drop in revenue of approximately S$4.8 million or 15.0% from its Marine Services business division. The drop was mainly due to the decrease in sterngear manufacturing business as a result of the Group's decision to focus on new growth areas and the slowdown in activities in the ship building industry. Sterngear services business remained fairly at the same level as in FY2010.
Gross profit
The Group's gross profit increased by approximately S$7.5 million or 47.0% from S$16.0 million in FY2010 to S$23.5 million in FY2011. The increase in gross profit was due mainly to the maiden contributions from the newly acquired subsidiaries, TGEM and Unidive. Overall gross profit margin of the Group decreased from 49.8% in FY2010 to 41.6% in FY2011. This was due mainly to the decrease in gross profit margin from Marine Services business division as a result of competitive pricing, offset by the maiden contributions from the Offshore & Engineering Services business division.
Other gains
The Group's other gains increased by approximately S$0.2 million from S$0.5 million in FY2010 to S$0.7million in FY2011 due mainly to the gains from disposal of property, plant and equipment, amount received from the Singapore government Job Credit Scheme and sale of scrap metals.
Administrative expenses
The Group's administrative expenses increased by approximately S$6.7million or 109.1% from S$6.2 million in FY2010 to S$12.9 million in FY2011. The increase in administrative expenses was mainly due to the following (i) administrative expenses of approximately S$5.8 million attributable to TGEM and Unidive following the completion of their acquisitions; (ii) rental expenses of approximately S$0.4 million attributable to the Group's additional land in Penjuru Road which lease had commenced from March 2011; and (iii) increase in legal and professional fees of S$0.3 million; and (iv) settlement of third party claim against a subsidiary of the Group amounted to S$0.2 million.
Finance expenses
The Group's finance expenses increased by approximately S$0.3 million or 67.7% from S$0.5 million in FY2010 to S$0.8 million in FY2011 due mainly to additional working capital loans and construction loans drawdown amounted to S$20.5 million.
Income tax expenses
The Group's income tax expenses decreased by approximately S$1.0 million or 80.5% from S$1.3 million in FY2010 to S$0.3 million in FY2011. The decrease was mainly due to the lower effective tax rate from higher capital allowances claimed under the Singapore government's Productivity and Innovation Credit Scheme and refund of tax amounted to S$0.8 million in respect of FY2010.
Net profit
The Group's net profit attributable to equity holders of the Company increased by approximately S$1.7 million or 20.4% from S$8.5 million in FY2010 to S$10.2 million in FY2011 as a result of the above.
REVIEW OF FINANCIAL POSITION
Current assets
Current assets increased by approximately S$12.3 million from S$30.0 million as at FY2010 to S$42.3 million as at FY2011.
The Group's cash and cash equivalents decreased by approximately S$2.2 million from S$11.6 million as at FY2010 to S$9.4 million as at FY2011. Please refer to "Review of Cash Flow Statement" for further details.
The Group's trade and other receivables at FY2011 increased by approximately S$12.5 million due mainly to the trade and other receivables of S$15.8 million in connections with the acquisitions to TGEM and Unidive.
The Group's inventories as at FY2011 increased by S$2.0 million which was mainly due to work in progress acquired in connection with the acquisition of TGEM.
Non-current assets
Non-current assets increased by approximately S$64.2 million from S$32.1 million in FY2010 to S$96.7 million in FY2011.
The Group's property, plant and equipment increased by S$30.2 million from S$25.9 million in FY2010 to S$56.1 in FY2011 due mainly to the purchase of new machinery and equipment of S$6.1 million, construction-in-progress of S$10.6 million for the Group's manufacturing plant at Penjuru Road and property, plant and equipment of S$14.5 million acquired in connection with the acquisitions of TGEM and Unidive.
Intangible assets increased by S$33.8 million from S$4.8 million in FY2010 to S$38.6 million in FY2011 due to goodwill arising from the acquisitions of TGEM, Unidive and Team Assets.
Current liabilities
Current liabilities increased by approximately S$30.2 million from S$15.0 million in FY2010 to S$45.2 million in FY2011.
The Group's trade and other payables as at FY2011 increased by approximately S$18.2 million as compared to FY2010 due mainly to the trade and other payables of S$10.7 million acquired in connection with the acquisitions of TGEM and Unidive and other payables of S$11.4 million in relation to the amount due to the former shareholders of TGEM, Unidive and former partners in the purchase of Team assets.
The Group's borrowings under current liabilities as at FY2011 increased by S$11.5 million as compared to FY2010 due mainly to additional working capital loans and construction loans drawdown.
Non-current liabilities
Non-current liabilities increased by approximately S$28.7 million from S$6.6 million in FY2010 to S$35.3 million in FY2011.
The Group's other payables of approximately S$11.5 million consist of deferred payments to the former shareholders of TGEM, Unidive and former partners in the purchase of Team assets.
The Group's borrowings under non-current liabilities as at FY2011 increased by S$17.1 million as compared to FY2010, the reason as explained in borrowings under current liabilities above.
REVIEW OF CASHFLOW STATEMENT
The Group's cash and cash equivalents decreased by approximately S$7.6 million from S$11.6 million in FY2010 to S$3.9 million in FY2011. The Group's recorded cash outflow from investing activities offset by cash inflows from both operating and financing activities in FY2011.
The Group's net cash used in investing activities in FY2011 was approximately S$30.8 million as compared to approximately S$5.5 million in FY2010, due mainly to the construction-in-progress at the Group's waterfront land at Penjuru Road of S$10.4 million, the acquisition of subsidiary and business of S$7.8 million and placement of fixed deposit pledged of S$4.4 million.
The Group's net cash from operating activities in FY2011 was approximately S$7.2 million as compared to S$2.2 million in FY2010. This was due to lower working capital outflow in the FY2011 of approximately S$5.3 million as compared to approximately S$8.5 million in FY2010 and a higher net profit before working capital changes in FY2011 of approximately S$13.4 million as compared to S$12.1 million in FY2010. The lower working capital outflows in FY2011 was due mainly to the increase in trade and other payable of S$4.9 million and trade and other receivable of $1.8 million and offset by increase in inventory of S$1.5 million for the reason as disclosed above.
The Group's net cash provided by financing activities in FY2011 was approximately S$15.9 million as compared to S$ 2.2 million in FY2010. This was due mainly to net increase in borrowings of S$18.6 million and offset by dividend paid of S$1.9 million and interest paid of S$0.8 million.
Commentary On Current Year Prospects
In the Offshore & Engineering business division, the business prospects remain strong with enquiries coming from the Middle East countries and Malaysia in the oil and gas sector.
In the Marine Services business division, the outlook for sterngear manufacturing remains weak due to the continued slowdown in the shipbuilding industry. In respect of the repair and maintenance services, the outlook remains positive but pricing is affected by competition.
The Group's order books as at 31 December 2011 was S$19.1 million comprised of S$8.9 million from Marine Services business division and S$10.2 million from Offshore & Engineering business division. This increased by 127.4% from S$8.4 million in FY2010.
Construction of the quay wall at the waterfront site at Penjuru Road is on track. Completion is expected to be in the second half of FY2012. The factory building at the same site has obtained temporary occupation permit ("TOP"). Piling on the additional land at Penjuru Road has commenced and expected to be completed in the first half of FY2012.