Financial Highlights


REVIEW OF THE FINANCIAL HIGHLIGHTS
Extracted from Annual Report 2018

The Group's revenue increased marginally by 0.3% year-onyear ("yoy") from $724.5 million for FY2017 to $726.8 million for FY2018.

The Group reported an increase in revenue from all business segments except for the Consumer/IT segment. The decrease in revenue from the Consumer/IT segment was due to certain projects reaching end-of-life and the strategic long-term decision to exit low-margin projects.

The Group's gross profit decreased 17.4% yoy from $105.5 million for FY2017 to $87.1 million for FY2018. Correspondingly, the Group's gross profit margin declined from 14.6% for FY2017 to 12.0% for FY2018. This was mainly due to an increase in labour costs, utility costs, raw material costs, lower manufacturing yield for certain new projects during the initial ramp-up stage and price pressure from customers.

The increase in other income was due to a gain on the disposal of property amounting to $13.1 million for FY2018.

The decrease in other expenses was mainly due to the Group reporting a foreign exchange gain of $0.7 million for FY2018 as compared to foreign exchange losses amounting to $10.6 million for FY2017 and allowance for impairment loss on property, plant and equipment ("PPE") of $0.6 million for FY2018.

The Group achieved a net profit of $29.8 million for FY2018 compared to $31.4 million for FY2017. Excluding foreign exchange (gain)/loss, gain on the disposal of property, plant and equipment, allowance for / (reversal of) impairment loss on property, plant and equipment, transaction costs relating to the acquisition of a subsidiary and retrenchment costs, the Group's net profit would have been $20.9 million for FY2018 and $41.9 million for FY2017, representing a 50.1% yoy decline in core earnings:

FY2018
$'000
FY2017
$'000
+/ (-)
%
Profit for the period reported 29,758 31,360 (5.1)
Adjustments:
Foreign exchange loss/(gain) (657) 10,647 n.m.
Gain on disposal of property, plant and equipment (12,925) (342) n.m.
Allowance for / (reversal of) impairment loss on property, plant and equipment 552 (99) n.m.
Transaction costs relating to acquisition of a subsidiary 260 - n.m.
Retrenchment costs 3,926 367 n.m.
Core earnings 20,914 41,933 (50.1)

 

The Group's earnings per share amounted to 15.70 Singapore cents for FY2018 as compared to 16.67 Singapore cents for FY2017.

The Group's net assets per share increased from $1.94 as at 31 December 2017 to $2.00 as at 31 December 2018. Similarly, the Group's net tangible assets per share increased from $1.85 as at 31 December 2017 to $1.93 as at 31 December 2018.

FINANCIAL POSITION AND CASHFLOWS

The Group's property, plant and equipment ("PPE") amounted to $190.4 million as at 31 December 2018 as compared to $193.9 million as at 31 December 2017. PPE was stated net of depreciation charges of $29.2 million (FY2017: $28.9 million), partially offset by currency re-alignment and additions of $37.2 million (FY2017: $36.8 million) in PPE.

The increase in trade and other receivables was due to the amount to be collected on disposal of the property sold for $28.9 million which was collected on 3 January 2019.

The Group maintained a cash balance of $88.7 million as at 31 December 2018 (31 December 2017: $105.3 million). This resulted in a net debt position of $21.0 million (31 December 2017: net cash $1.6 million) after accounting for loans and borrowings amounting to $109.7 million (31 December 2017: $103.7 million). The decrease in net cash was due to a foreign currency translation loss of $1.1 million on the opening balance of cash and cash at bank, the payment of capital expenditure amounting to $37.0 million, the payment of dividends amounting to $14.2 million and the payment of transaction costs on the disposal of property amounting to $5.9 million.

BUSINESS SEGMENT PEFORMANCE

FY2018
$'000
FY2017
$'000
+/(-)
%
Automative 269,933 263,789 2.3
Consumer/IT 274,184 284,795 (3.7)
Healthcare 56,739 51,673 9.8
Mould Fabrication 125,939 124,288 1.3
726,795 724,545 0.3

 

The Group's profit (excluding retrenchment cost, foreign exchange (gain)/loss and gain on disposal of property) was impacted by an increase in labour costs, utility costs, raw materials costs, delays in shifting manufacturing operations from Shanghai to Chuzhou, lower utilisation levels during the initial start-up phase in Penang, lower manufacturing yield for certain new projects during the initial ramp-up stage, and price pressure from customers.

Revenue from the Automotive business segment, one of the Group's key revenue generators, increased 2.3% yoy from $263.8 million for FY2017 to $269.9 million for FY2018. The Automotive segment's contribution to the Group's revenue was 37.1% (FY2017: 36.4%).

The Group's revenue from the Consumer/IT segment decreased 3.7% yoy from $284.8 million for FY2017 to $274.2 million for FY2018. Its contribution to the Group's revenue was 37.7% (FY2017: 39.3%).

Revenue from the Group's Healthcare segment increased 9.8% yoy from $51.7 million for FY2017 to $56.7 million for FY2018. The Consumer/IT segment's contribution to Group's revenue was 7.8% (FY2017: 7.1%)

Revenue from the Group's Mould Fabrication segment increased marginally by 1.3% yoy from $124.3 million for FY2017 to $125.9 million for FY2018. Its contribution to the Group's revenue was 17.3% (FY2017: 17.2%)

GEOGRAPHIC SEGMENT PERFORMANCE

Revenue contribution from the Group's operations in China and Hong Kong decreased 3.7% yoy from $322.7 million for FY2017 to $310.7 million for FY2018. This was mainly due to project end-of-life within the Consumer/IT segment, a decline in orders from customers in the Healthcare segment and lower revenue from Mould Fabrication.

Revenue contributions from the Group's Singapore, Thailand, Indonesian and Malaysian operations increased slightly from 43.2% for FY2017 to 43.4% for FY2018. In absolute figures, revenue from the Group's Singapore, Thailand, Indonesian and Malaysian operations increased from $313.2 million for FY2017 to $315.2 million for FY2018. The increase was mainly from the Group's Consumer/IT and Healthcare segments due to new projects launches in FY2017, partially offset by the decline in revenue from the Automotive segment.

Revenue contribution from the Group's operations in other regions increased 13.8% yoy from $88.7 million for FY2017 to $100.9 million for FY2018 due to revenue growth across all business segments.