Financials
FULL YEAR FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011
Financials Archive
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Consolidated Statement of Comprehensive Income
Balance Sheets
Review of Performance
Income Statement
Revenue
Sales revenue for FY2011 decreased by $8.9 million (5.2%) to $162.7 million as compared to $171.6 million in FY2010. Revenue for the electronics manufacturing services ("EMS") business division decreased by $13.7 million (8.6%) to $145.1 million in FY2011 (FY2010: $158.8 million), while revenue for the original equipment manufacturing ("OEM") business division increased by $4.9 million (38.1%) to $17.6 million in FY2011 (FY2010: $12.8 million). Sales revenue in the 2nd half of 2011 was only $59.6 million as compared to $103.1 million reported for 1st half of 2011.
In terms of product mix, the EMS business division accounted for 89.2% of the Group's sales revenue (FY2010: 92.6%).
Gross Profit & Operating Expenses
The gross profit decreased by $1.6 million (7.0%) to $21.2 million in FY2011 as compared to $22.8 million in FY2010 as a result of lower production volume in line with the lower sales revenue.
Cost of sales decreased by $7.3 million (4.9%) to $141.5 million in FY2011 as compared to $148.8 million in FY2010, and is in tandem with the decrease in sales revenue.
Sales and marketing and general and administrative expenses decreased by $1.4 million (9.4%) to $13.0 million in FY2011 as compared to $14.4 million in FY2010. This decrease is in tandem with the lower sales revenue and is mainly due to (a) lower delivery and logistic expenses, (b) recovery of debts, and (c) lower exchange losses.
Share of results of an associated company
Other Income, Interest Expense, Taxation
Share of results from an associated company for FY2011 decreased marginally by only $6,000 (2.9%) to $200,000 from $206,000 reported in FY2010.
Other income for FY2011 decreased by $130,000 (46.1%) to $152,000 as compared to $282,000 in FY2010 mainly due to the cessation of job credits received from the government.
Interest expense for FY2011 decreased by $244,000 (34.6%) to $461,000 from $705,000 reported in FY2010 due to less borrowings and a partial repayment of the bridging loan.
Taxation expense for FY2011 increased by $87,000 (11.3%) to $859,000 as compared to $772,000 reported in FY2010 and is mainly due to increased profit at our Nantong subsidiary.
Profit After Tax & Comprehensive Income
Profit after tax for the year decreased slightly to $7.2 million in FY2011 (FY2010: $7.4 million).
Comprehensive income increased by $2.5 million to $8.7 million in FY2011 (FY2010: $6.3 million). This was mainly due to the translation gain of a stronger Renminbi when translating the Group's investment in the PRC subsidiaries for FY2011.
Balance Sheet
Current assets decreased by $1.5 million to $68.1 million as at 31 December 2011 (FY2010: $69.6 million) mainly due to (a) increase in inventory by $7.5 million due to a slowdown in production in the 4th quarter of 2011, (b) decrease in trade receivables by $2.3 million due to better collections and lower sales reported in 4Q2011, (c) the decrease in other receivables, deposits and prepayments by $1.8 million due mainly to a reduction in advance payment from customer, and (d) the decrease in cash and bank balances and fixed deposits due mainly to repayment of loans.
Current liabilities decreased by $8.6 million to $38.4 million as at 31 December 2011 (FY2010: $47.0 million) due to (a) decrease in trade payables, other payables and accruals by $4.3 million mainly due to less purchases made in the last quarter of the year, (b) increase in provision for warranty by $0.6 million, and (c) reduced bank borrowings by $4.7 million due to a partial repayment of the bridging loan, which also account for the decrease in long term borrowings of $1 million.
The Group reported an increase in working capital of $7.1 million to $29.7 million as at 31 December 2011 (FY2010: $22.6 million).
Cash Flow Statement
Cash flow generated from operating activities for FY2011 decreased by $5.2 million to $2.8 million (FY2010: $8.0 million ) mainly due to decrease in payables.
Cash flow used in financing activities for FY2011 is $6.1 million as compared to cash flow generated from financing activities for FY2010 of $1.6 million due to repayment of bank borrowings and payment of dividend in May 2011 to ordinary shareholders.
As at 31 December 2011, the Group had cash and cash equivalents of $9.6 million as compared to $13.3 million as at 31 December 2010.
Commentary
Global consumption for 2012 looks to be on the downtrend owing to:-
- The European recession;
- Continued vacillations on the sovereign debt issues of certain European countries;
- Continued dampened consumption figures from the USA attributable to the erosion of jobs availability.
The rapid rise of costs, especially in China, will pose great challenges to increase productivity in all our branches of operations, viz. Singapore, China, Philippines, USA and Thailand.