Email This Print ThisFinancials

Unaudited Financial Statements And Dividend Announcement For The Nine Month Financial Period Ended 30 September 2019

Financials Archive

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

Consolidated Statement Of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance
9M2019 vs 9M2018 and 3Q2019 vs 3Q2018


Review of Performance


  1. Offshore & Engineering includes offshore structures, engineering, manufacturing, inspection and maintenance. This also includes rope access services.
  2. Marine includes stearngear manufacturing and refurbishment works, ship inspection, repair & maintenance services and engineering & fabrication works. This also includes diving services.
  3. With the proposed sale of Vac-Tech, the remaining business in Energy Services would comprise of waste treatment and recovery waste system. Capabilities of waste treatment plant include treatment of waste water, oily sludge, slope, mud oil, contaminated soil, solid wastes and filter cakes.

The Group registered a total revenue of $45.3 million in 9M2019, 17% higher than the revenue of $38.8 million in 9M2018. The increase was largely attributable to the Marine segment and Energy Services segment registering an increase in revenue of $7.4 million and $3.3 million respectively, but was affected by lower revenue of $4.1 million from the Offshore & Engineering segment.

Offshore & Engineering segment

The Offshore & Engineering segment continued to be affected by slow market sentiment with revenue declined by $4.1 million or 37%, from $11.1 million in 9M2018 to $7.0 million in 9M2019. The reduction in revenue was mainly due to lower work orders in its offshore structure and fabrication of $3.1 million and precision engineering business of $1.2 million.

These also explain the lower revenue from Offshore & Engineering segment in 3Q2019 as compared to 3Q2018.

Marine segment

Revenue for the Marine segment rose by $7.4 million or 27% to $34.5 million in 9M2019 which was attributable to:

  • the dredging and reclamation business contributing a revenue of $14.5 million in 9M2019 as compared to $3.2 million in 9M2018; offset by
  • decline in the segment’s MRO (maintenance, repairs and overhaul) services by $3.3 million to $8.3 million in 9M2019 due to lower orders from customers; and
  • lower volume activity of $0.2 million in diving services.
3Q2019 revenue from Marine segment of $7.3 million decreased by $4.3 million or 37% as compared to $11.6 million in 3Q2018 due to:
  • lower works order from customers under MRO services by $2.0 million;
  • revenue from new built propellers posted a decline of $1.5 million from $3.0 million in 3Q2018 to $1.4 million in 3Q2019;
  • lower volume of activity in dredging and reclamation services of $672,000 or 21% to $2.5 million in 3Q2019.

Energy Services segment

In view of the disposal of 50% equity interest in Vac-Tech, the remaining business of this segment comprise of waste treatment and recovery waste system.

Revenue from the waste treatment business in 9M2019 increased by $3.3 million from from $0.5 million in 9M2018 to $3.8 million, due mainly to a larger customer base.

These also explained the fluctuation in revenue in 3Q2019 as compared to Q2018.

Cost of sales, gross profit and gross profit margin

Cost of sales increased by 23% or $8.2 million from $35.2 million in 9M2018 to $43.4 million in 9M2019, in line with the increase in Group’s revenue.

Gross profit in 9M2019 decreased by $1.6 million when compared to 9M2018, due mainly to lower revenue from offshore structure and fabrication and precision engineering business as mentioned above offset with higher gross profit from Energy segment’s waste treatment services.

Consequently, the gross profit margin declined by 4.9% from 9.3% in 9M2018 to 4.4% in 9M2019 due to Offshore & Engineering segment and diving services which were not sufficient to cover its fixed running costs.

These also explained the fluctuations in cost of sales, gross profit and gross profit margin in 3Q2019 as compared to 3Q2018.

Other gains/(losses) - net

Detailed explanations of these gains/(losses) were highlighted.

Administrative expenses

The Group’s administrative expenses decreased by approximately $1.3 million from 9M2018 of $10.3 million to $9.0 million in 9M2019 mainly due to the following:

  • cost savings of approximately $645,000 from the disposal of a China subsidiary in 4Q2018;
  • reduction in depreciation of $181,000 due mainly to assets classified to disposal group in 4Q2018;
  • decrease in professional and legal fees of $185,000; and
  • effects of adoption of SFRS(I) 16 on the rental expense of leasehold land, offset with additional depreciation expenses and amortisation of finance expense.

The above also explained the decrease in administrative expenses in 3Q2019 as compared to 3Q2018.

Finance expenses

Finance expenses increased by $1.9 million or 43% from $4.3 million in 9M2018 to $6.1 million in 9M2019, due mainly to the expensing of $1.2 million interest in connection to a construction loan for 42A Penjuru Road property as opposed to capitalising the said interest to property, plant and equipment in 9M2018. Additional finance cost in respect of the amortisation of lease liability of $273,000 was also included in 9M2019.

This also explained the increase in finance expenses in 3Q2019 as compared to 3Q2018.

Income tax

The tax expense of the Group in 3Q2019/9M2019 arose from the over-provision of current income tax in prior years. The tax expense in 3Q2018/9M2018 arose from the under-provision of current income tax in prior years from foreign subsidiaries.

Loss from continuing operations

Consequent to the above, the Group recorded a loss from continuing operations of $7.4 million in 9M2019 as compared to $7.3 million in 9M2018. Loss for 3Q2019 was $2.4 million as compared to $2.0 million in corresponding period last year.


Current assets

The Group’s current assets as at 30 September 2019 amounted to $126.6 million which remain comparable to $127.4 million as at 31 December 2018. The $0.7 million decrease was mainly attributable to the following:

  • decrease in cash and cash equivalents of $0.3 million
  • decrease in trade and other receivables and contract assets of $7.4 million was mainly related to disposal of a Singapore subsidiary;
  • decrease in inventories of $2.9 million or 36% was mainly due to deliveries of new built propellers to customers in 9M2019 under the Marine segment; offset with
  • increase in asset of disposal group classified as held-for-sale of $9.8 million arising from recognition of right-of-use assets on leasehold land of $9.8 million for certain properties that have been identified to be disposed of.
Non-current assets

The Group’s non-current assets of $131.9 million as at 30 September 2019 was up by $2.2 million as compared to $129.8 million as at 31 December 2018 due to the following:

  • initial recognition of investment in associated company for the 20% retained investment after the completion of disposal of 50% equity interest in Vac-Tech;
  • property, plant and equipment increased by $3.3 million, from $120.0 million to $123.3 million, mainly due to:
  • following the adoption of SFRS(1) 16 Leases on 1 January 2019, most of the leases where the Group is the lessee was brought into the balance sheet as right-of-use assets valued at $17.4 million as at 30 September 2019.
  • additions in property, plant and equipment of $3.5 million mainly arising from the dredging and reclamation business and capital expenditure from Energy segment of approximately $0.8 million; offset by
  • deconsolidation of fixed assets and goodwill of $14.7 million related to disposal of Vac-Tech; and
  • depreciation expense on property,plant and equipment and ROU assets (hire purchase) from continuing operation of $8.2 million.
Current liabilities

Overall, the current liabilities as at 30 September 2019 of $218.0 million is relatively similar to $217.9 million as at 31 December 2018 due to:

  • deconsolidation of a subsidiary’s current liabilities of approximately $4.7 million in 3Q2019;
  • reduction in current bank borrowings of $5.1 million arising from the payment of certain loans after the disposal of subsidiaries; offset with
  • increase in lease liabilities of $10.4 million arising from the adoption of SFRS(I) 16, of which approximately $9.4 million is related to those properties owned by the Group which were identified for sale and thus accounted for in liabilities directly associated with disposal group classified as held-for-sale. The balance amount of $1.0 million was classified under current borrowings.
Non-current liabilities

Non-current liabilities increased by $14.2 million from $6.3 million as at 31 December 2018 to $20.5 million as at 30 September 2019. The increase was mainly due to the recognition of lease liabilities of $16.4 million upon adoption of SFRS(I) 16 Leases (refer to paragraph 5 for detailed explanation), offset with the deconsolidation of non-current liabilities of $1.2 million after disposal of Vac-Tech as explained above.


The Group’s cash and cash equivalents as at 30 September 2019 were approximately $15.3 million. The Group reported a net cash inflow from operating activities of $11.9 million in 9M2019 due mainly to its operating income before changes in working capital of $8.4 million and decrease in inventories by $2.9 million mainly from delivery of new built propellers during the current reporting period.

Net cash provided by investing activities was $5.9 million for 9M2019 mainly arose from the:

  • net proceeds from disposal of a subsidiary classified as held-for-sale of $9.9 million; offset with
  • purchase of property, plant and equipment for:
    • dredging and reclamation business of approximately $1.5 million;
    • asset enhancement of waste treatment plant of $0.8 million.
    • capital expenditures of $1.2 million incurred by Vac-Tech

Net cash used in financing activities of $17.8 million during 9M2019 was mainly a result of repayments of term loans, lease liabilities and payment of interests of approximately $17.5 million and dividend payment of $4.2 million, offset by proceeds from bank borrowings of $3.9 million.


As previously announced on 28 June 2019, Mencast Energy Pte. Ltd. (“Mencast Energy”) entered into a sale and purchase agreement for the disposal of 50% equity interest in Vac-Tech Engineering Pte Ltd (“Vac-Tech”). Prior to disposal, Mencast Energy holds 2.1 million shares in Vac-Tech representing 70% of its existing issued and paid-up share capital.

As at 30 June 2019, following the Group’s decision to sell Vac-Tech and in compliance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities of Vac-Tech including the goodwill arising from its consolidation were classified as Assets of disposal group classified as held-for-sale and Liabilities directly associated with disposal group classified as held-for-sale respectively on the consolidated balance sheet. Its financial results have been reclassfied to “Discontinued Operations” for the current financial period reported on and the prior period financial results have been restated to reflect this change in presentation in the Consolidated Statement of Comprehensive Income. The change in classification and presentation has no effect to the profit or loss after tax and net asset value of the Group.

On 24 September 2019, Mencast Energy had completed the disposal of its 50% equity interest in Vac-Tech.

The summarised net profit for 9M2019 and 9M2018 from Discontinued Operations are presented as follows:


The Group expects the outlook of the marine, offshore, O&G industry to remain largely unchanged. It expects market conditions to remain challenging and competitive to which pressure on margins will persist. The Group will continue to exercise prudence and place greater emphasis on operational costs savings.

Following the sale of Vac Tech, the Group is focusing on expanding the capacity of its waste treatment plants to serve its growing customer base in the Energy segment. This initiative will take time to develop and is expected to diversify our business instead of relying on the existing industry / markets that the Group is currently serving.