This printed article is located at http://gaylin.listedcompany.com/financials.html

Financials Results

Unaudited Third Quarter Financial Statements And Related Announcement For The Period Ended 31 December 2018

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Consolidated Income Statement

Income Statement

Consolidated Statement of Comprehensive Income

Statements of Comprehensive Income

Statements of Financial Position

Statements of Financial Position

Review of the Group's Performance

Revenue

Revenue

9M FY2019 vs 9M FY2018

For the nine months ended 31 December 2018 ("9M FY2019"), the Group's revenue was S$98.2 million with an increase of S$46.1 million or 88.6% compared to S$52.1 million for the corresponding period ended 31 December 2017 ("9M FY2018"). The increase was mainly contributed by the common control transaction of Amos International Holdings Pte Ltd ("AIH").

3Q FY2019 vs 3Q FY2018

For third quarter ended 31 Dec 2018 ("3Q FY2019"), the Group's revenue was S$33.6 million with an increase of S$19.0 million compared to S$14.6 million for the corresponding period ended 31 December 2017 ("3Q FY2018"). The increase was mainly contributed by the increase of S$4.3 million in the company's traditional rigging and lifting business and a further increase of S$15.9 million contributed by the common control transaction of marine supplies business of AIH.

Gross profit

9M FY2019 vs 9M FY2018

Gross profit increased by S$8.9 million from S$8.7 million in 9M FY2018 to S$17.6 million in 9M FY2019. The corresponding gross profit margin increased from 16.7% to 18.0%. The common control transaction of AIH contributed gross profit of S$11.6 million. Isolating the impact from the common control transaction of AIH, the effective gross profit margin decreased by 4.4% to 12.3% in 9M FY2019 compared to 16.7% in 9M FY 2018. The drop in gross profit margin was primarily due to the sale back of some slow-moving stock to suppliers as the company continued to right-size its inventory.

3Q FY2019 vs 3Q FY2018

Gross profit increased by S$4.3 million from S$2.2 million in 3Q FY2018 to S$6.5 million in 3Q FY2019. The corresponding gross profit margin increased from 15.1% to 19.5%. The common control transaction of AIH contributed gross profit of S$3.7 million. Isolating the impact from the common control transaction of AIH, the gross profit margin increased to 16.0% in 3Q FY2019 compared to 15.1% in 3Q FY2018.

Other operating (expenses) income

9M FY2019 vs 9M FY2018

Other operating expenses increased by S$2.5 million in 9M FY2019 compared to 9M FY2018 mainly due to: (i) non-recurring acquisition and restructuring cost of S$3.3 million, and (ii) impairment of PPE S$0.3 million, offset by (i) a gain on disposal of PPE of S$0.5 million in 9M FY2019, (ii) an increase in other operating income of S$0.4 million contributed by the common control transaction of AIH, and (iii) an increase in foreign exchange gain of S$0.2 million.

3Q FY2019 vs 3Q FY2018

Other operating expenses in 3Q FY2019 increased by S$3.6 million mainly due to: (i) non-recurring acquisition and restructuring cost of S$3.0 million, (ii) increased in foreign exchange loss of S$0.4 million, and (iii) impairment of PPE of S$0.3 million, offset by an increase of S$0.7 million contributed by the common control transaction of AIH, and (iii) impairment of PPE S$0.3 million, offset by an increase in other operating income of S$0.2 million contributed by the common control transaction of AIH.

Distribution costs

9M FY2019 vs 9M FY2018

Distribution costs in 9M FY2019 increased by S$4.8 million compared to S$3.5 million in 9M FY2018. The increase was mainly due to the S$5.1 million contributed by the common control transaction of AIH, offset by lower marketing and advertisement expenses of S$0.3 million.

3Q FY2019 vs 3Q FY2018

Distribution costs in 3Q FY2019 increased by S$1.7 million compared to S$1.2 million in 3Q FY2018. The increase was due to the S$1.8 million contributed by the common control transaction of AIH.

Administrative expenses

9M FY2019 vs 9M FY2018

Administrative expenses in 9M FY2019 increased by S$8.2 million compared to S$9.9 million in 9M FY2018. The increase was due to the S$8.1 million contributed by the common control transaction of AIH.

3Q FY2019 vs 3Q FY2018

Administrative expenses in 3Q FY2019 increased by S$2.5 million compared to S$3.3 million in 3Q FY2018. The increase of S$3.1 million was contributed by the common control transaction of AIH, offset by lower professional fees of S$0.4 million.

Finance cost

9M FY2019 vs 9M FY2018

Finance cost in 9M FY2019 increased by S$0.1 million compared to 9M FY2018. The increase was due to: (i) consolidation of AIH's interest expense of S$0.2 million, and (ii) increase in bank facility fees of S$ 0.6 million resulting from loan settlement, which were offset by the lower interest of S$0.7 million resulting from the repayment of bank borrowings.

3Q FY2019 vs 3Q FY2018

Finance cost in 3Q FY2019 increased by S$0.4 million compared to 3Q FY2018. The increase was due to: (i) the common control transaction of AIH of S$0.1 million, and (ii) increase in bank facility fees of S$ 0.5 million resulting from loan settlement, which were offset by the lower interest of S$0.2 million resulting from the repayment of bank borrowings.

Loss before income tax

As a result of the above reasons, the loss before income tax was S$6.3 million for 3Q FY 2019 which includes non-recurring acquisition and restructuring cost incurred during the quarter of S$3.0 million. Likewise, the loss before income tax was S$13.6 million for 9M FY2019, which includes non-recurring acquisition and restructuring cost of S$3.3 million incurred during the 9M.

Review of statement of financial position

Current assets

The current assets decreased by S$32.4 million from S$185.1 million as at 31 March 2018 to S$152.7 million as at 31 December 2018. The decrease was mainly due to: (i) a decrease in cash and cash equivalents of S$33.6 million for loan repayment and capital expenditure, and (ii) a decrease in inventories by S$11.1 million due to inventories sales during the normal course of business, offset by (i) reclassification of PPE to assets held for sale of S$5.1 million, (ii) an increase in trade receivables by S$3.7 million, and (iii) an increase in other receivables by S$3.3 million attributable from the common control transaction of AIH.

Non-current assets

The non-current assets decreased by S$2.6 million from S$58.3 million as at 31 March 2018 to S$55.7 million as at 31 December 2018. The decrease was mainly due to reduction in PPE by S$2.5 million ((i) reclassification of PPE to assets held for sale of S$5.1 million, and (ii) depreciation of S$4.3 million in 9M FY2019, offset by net additions of PPE of S$7.1 million).

Current liabilities

The current liabilities decreased by S$13.9 million from S$55.5 million as at 31 March 2018 to S$41.7 million as at 31 December 2018. The decrease was mainly due to: (i) repayment of bank borrowings and finance leases of S$3.2 million, (ii) reduction in other payables of S$9.8 million (mainly due to payable arising from the disposal of a property of S$6.0 million by AIH in March 2018 and repayment of loan to third party of S$3.4 million), (iii) payment of provision of restructuring cost of S$0.5 million, and (iv) a decrease in trade payables of S$0.3 million.

Non-current liabilities

Non-current liabilities decreased by S$8.2 million from S$50.8 million as at 31 March 2018 to S$42.6 million as at 31 December 2018. The decrease was mainly due to repayment of bank borrowings amounting to S$7.6 million and repayment of finance lease of S$0.4 million.

Capital, reserves and non-controlling interests

The decrease in shareholder's equity of S$12.7 million was mainly due to a loss of S$13.6 million during the period which was offset by the increase in translation reserve of S$0.6 million.

Review of statement of Cash Flows

9M FY2019 ended 31 December 2018

Net cash used in operating activities

In 9M FY2019, we had operating cash outflows of S$7.5 million from operating activities before changes in working capital.

Our net working capital outflow amounted to S$9.6 million. This was mainly due to: (i) decrease in trade and other payables of S$7.1 million, (ii) bank bills paid off of S$6.2 million, (iii) an increase in trade receivables by S$3.9 million, (iv) an increase in other receivables by S$3.1 million, and (v) repayment of provision of S$0.5 million, offset by a decrease in inventories by S$11.1 million resulting from sales during the normal course of business.

We paid interest for bank bills and income tax of S$0.4 million in total.

Overall, our net cash used in operating activities amounted to S$17.5 million.

Net cash used in investing activities

Net cash used in investing activities amounted to S$6.4 million in 9M FY2019 mainly due to the payment for acquisition of PPE of S$7.3 million, which was offset by the proceeds from net disposal of PPE of S$0.8 million.

Net cash used in financing activities

Net cash used in financing activities amounted to S$9.7 million in 9M FY2019. This was mainly due to: (i) the repayment of bank borrowings and related interest of S$53.2 million, (ii) repayment of other payables of S$3.4 million, (iii) the repayment of obligations under finance leases of S$1.0 million, offset by new bank loans of S$48.2 million secured as part of our refinancing program.

3Q FY2019 ended 31 December 2018

Net cash used in operating activities

In 3Q FY2019, we had operating cash outflows of S$3.4 million from operating activities before changes in working capital.

Our net working capital inflow amounted to S$1.3 million. This was mainly due to: (i) a decrease in inventories by S$3.0 million resulting from sales during the normal course of business, and (ii) an increase in trade and other payables by S$1.4 million, offset by (i) increase in trade and other receivables of S$3.2 million.

Overall, our net cash used in operating activities amounted to S$2.1 million.

Net cash used in investing activities

Net cash used in investing activities amounted to S$4.9 million in 3Q FY2019 mainly due to the payment for acquisition of PPE.

Net cash used in financing activities

Net cash from financing activities amounted to S$4.3 million in 3Q FY2019. This was mainly due to new bank loans of S$48.2 million secured as part of refinancing program, offset by (i) the repayment of bank borrowings and related interest of S$41.8 million, (ii) repayment of other payables of S$1.4 million, and (iii) repayment of obligations under finance leases of S$0.6 million.

Commentary

For both the 3Q and the 9M ended 31 December 2018, the results of Amos International Holdings Pte Ltd ("AIH") are consolidated based on the common control approach with effect 13 March 2018.

The acquisition of AIH in October 2018 and subsequent renaming of the business to AMOS Group Limited in November 2018, has created revenue growth potential through cross-selling opportunities, and the expansion of its client network and geographical reach.

Revenue for both the traditional rigging, lifting & mooring segment of the business as well as the marine supplies segment for the 9M ended 31 December 2018 has grown by 0.7% and 5.1% respectively compared to the same period last financial year, on a fully consolidated basis for FY2018.

Gross profit margin for the Group has also improved considerably by 4.4% when compared to the same quarter last financial year and by 1.3% when compared to 9M FY2018.

Within the quarter, the Company incurred S$3.1 million of non-recurring professional, consultancy, recruitment and legal costs attributable to the acquisition of AIH and the ongoing restructuring exercise which is expected to complete within this financial year. Therefore, the third quarter EBITDA result of -S$0.6 million is a marked improvement on 2Q FY2019 and 3Q FY2018 which were -S$2.8 million and -S$1.1 million respectively.

At the forefront of the macro-economic activities impacting sales is the drop in average quarterly oil price by almost 9% across the last two quarters. This has negatively affected the already subdued pace of advancement of potential new offshore projects and it is expected that this will continue for some time.

However, during the quarter, the Group entered into two major marine supply and service contracts, one with one of the largest marine procurement pools in the world for ship supplies and consumables for their pooled fleet. The combined potential annual contract values are of significant amounts. The opportunity of extending these collaborations to other areas of the business will also be explored.

Concurrent with the meaningful strengthening of the management team through the acquisition of AIH, the Group has been attracting some targeted new key talent. During the quarter Mr. Wayne Parker joined the business as Executive Vice President of Sales & Marketing.

AMOS Group Limited now has total assets in excess of S$200 million. In line with its operational expansion strategies, Shanghai facilities have been upgraded to the business complementing its existing facilities in Tianjin and a new 12,000sqft marine supplies fulfillment center has just recently been opened in Hong Kong.

The expansion and upgrading works remain on target for completion of the Group's 250,000sqft supplies and solutions fulfillment center in Singapore. Upon completion of the fulfillment center in March 2019, AMOS will recognize the full fair value of the property in its balance sheet which is estimated to be an increase of approximately S$20 million in property value.

Please read our General Disclaimer & Warning carefully.Use of this Website constitutes acceptance of the Terms of Website Use.
Copyright © 2019. ListedCompany.com. All Rights Reserved.