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Financials

Financial Statements For The Second Half Year And Full Year Ended 31 December 2023

Financials Archive

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Profit & Loss

BALANCE SHEETS

Balance Sheet

Review of Performance
Review of Statement of Comprehensive Income

Revenue

Overall, the Group's revenue rose by $6.08 million, or 14%, from $42.34 million in FY2022 to $48.42 million in FY2023. The revenue increase was primarily attributable to Energy Services and Marine segment as indicated below:

Offshore & Engineering segment

In FY2023, Offshore & Engineering segment (“O&E”)'s revenue decreased by $2.29 million or 32% to $4.87 million as compared to FY2022. This was mainly due to:

This also explains the variation in Offshore & Engineering segment revenue in 2HY2023 over 2HY2022.

Marine segment

The Marine segment's revenue increased by $2.44 million or 11%, from $21.93 million in FY2022 to $24.37 million in FY2023 which was attributable to:

This also explains the difference in Marine segment revenue in 2HY2023 over 2HY2022, with the exception of MRO Ship repair revenue, which decreased by $0.44 million in 2HY2023 mainly from one customer.

Energy Services segment

In FY2023, revenue from the waste treatment business increased by 45% to $19.18 million in FY2023, from $13.25 million in FY2022. This was due to increased demands from key accounts, effective implementation of new processing capacity and customer base expansion.

This also explains the variation in Energy Services segment revenue in 2HY2023 over 2HY2022.

Cost of sales, gross profit and gross profit margin

The Group's cost of sales rose by $1.82 million or 6%, from $32.45 million in FY2022 to $34.27 million in FY2023, in tandem with an increase in revenue from Energy Services and Marine segments, respectively.

In line with the higher revenue, the Group's gross profit increased by $4.26 million from $9.89 million in FY2022 to $14.15 million in FY2023. The increase was driven by improved margin contributions from the Energy services business, as well as Marine's MRO and new build propellers.

As a result, the Group's gross profit margin, as a percentage over revenue grew by 6 percentage point, from 23% in FY2022 to 29% in FY2023.

This also explains the variation in Energy Services segment's gross profit in 2HY2023 over 2HY2022.

The Group registered a gross profit of $5.81 million in 2HY2023 as compared to a gross profit of $5.93 million in 2HY2022 from Marine segment. This marginal decrease of 2% was attributable to lower gross profit from MRO shipyard.

Whereas for O&E segment reported a gross loss of $2.66 million in FY2023 as compared to a gross loss of $1.59 million in FY2022, mainly due to lower revenue in FY2023 as explained above. This also explains the reason for the difference in gross loss in O&E segment in 2HY2023 as compared to 2HY2022.

Administrative expenses

Administrative expenses increased by $462,000 or 5% mainly due to professional fees and general expenses spent in connection with the disposal of:

For 2HY2023, the Group registered a total of $4.87 million in administrative expenses as compared to $4.65 million in 2HY2022. The increase was mainly due to professional fees spent in relation to the disposal of crane barge vessel in 2HY2023 of approximately $201,000.

Finance expenses

The increase in finance expenses from $5.35 million in FY2022 to $7.43 million in FY2023, or a 39% increase, was primarily caused by higher effective interest rates on bank borrowings.

This also explains the fluctuation in finance expenses in 2HY2023 as compared to 2HY2022.

Share of loss of associated companies

The Group registered a share of losses of $37,000 from its remaining associated company, Menji Group in FY2023 as compared to $75,000 net gain from its two associated companies in FY2022 comprising of Menji Group and Vac-Tech.

On 31 December 2022, the Group reclassified the investment in associated company from Vac-Tech to Asset of disposal group classified as held-for-sale.

This also explains the fluctuation in share of profit of associated companies in 2HY2023 as compared to 2HY2022.

(Loss)/profit from continuing operations

Consequently, the Group reported a profit from continuing operations of $2.50 million in FY2023, compared to a loss from continuing operations of $0.23 million in FY2022. The profit was primarily due to:

Review of Balance Sheet

Current assets

As at 31 December 2023, the Group's current assets were $99.38 million, a 9% decrease from $109.77 million as at 31 December 2022 due to:

Non-current assets

As at 31 December 2023, the Group's non-current assets were $81.61 million, down by 11% or $9.68 million, from $91.29 million as at 31 December 2022. The decline was mainly attributable to:

Current liabilities

The Group's current liabilities decreased by $2.00 million, or 2%, from $88.82 million as at 31 December 2022 to $86.82 million as at 31 December 2023 mainly attributable to:

Non-current liabilities

As at 31 December 2023, the Group's non-current liabilities were $61.81 million, down by $19.56 million or 24% from $81.37 million as at 31 December 2022. The drop was mainly due to repayment of bank loans and lease liabilities, as well as early settlement of outstanding loans resulting from the disposal of crane barge vessel and the Batam property.

Review of Condensed Interim Statement of Cash Flows

The Group has a net cash inflow from operating activities of $19.00 million mainly due to:

Net cash provided by investing activities of $9.19 million due to the following:

Net cash used in financing activities of $30.53 million was mainly related to the following:

Commentary

The Group has improved its sales and profitability compared to the same period last year. It remains cautious given the volatility of the business due to economic and geopolitical uncertainties, increased interest rates and inflationary pressures on material costs, production costs, personnel, etc. These costs are not expected to abate and will continue to challenge the Group's core business segments.

The Group will take proactive measures to monitor market demand in its core business, prioritise cost containment and continuously review its production processes to improve operational efficiency.

The Group's Energy Service segment continues to grow and will look for opportunities to increase its revenue by expanding its waste treatment capacity and developing new treatment processes to create new revenue streams.

The Marine segment, which manufactures propulsion systems, will continue its marketing efforts to acquire orders for newbuilds, strategically expand its presence in overseas markets and further consolidate its leading position in the industry by developing its own technological and additive manufacturing capabilities.

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