Sin Heng Heavy Machinery Limited

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Financials
Second Quarter Results Financial Statement And Related Announcement
Financials Archive

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Profit & Loss

 

Review of Performance

Income Statement

Revenue

The Group registered total revenue of $21.0m in 2Q FY2017 which was 5.9% lower than 2Q FY2016, from a mix of higher rental revenue and lower trading revenue. The Group registered total revenue of $58.7m for 1H FY2017 which was 15.5% higher compared to 1H FY2016, mainly due to both higher rental and trading revenue for the corresponding period.

Revenue from Equipment Rental business increased by 18.4% to $11.3m in 2Q FY2017 and 13.7% to $23.1m in 1H FY2017 as compared to the corresponding periods respectively, mainly due to increase in fleet size being rented out.

Revenue from Trading business decreased by 23.9% to $9.7m in 2Q FY2017 as compared to 2Q FY2016, mainly due to sales and delivery of smaller tonnage equipment during the period. Revenue from Trading business for 1H2017 was 16.7% higher at $35.7m as compared to 1H2016, mainly due to higher volume of equipment sold for the corresponding period.

Gross Profit

The Group registered total gross profit of $4.5m in 2Q FY2017 which was 29.0% higher than 2QFY2016, mainly from higher rental income. The Group registered total gross profit of $10.5m in 1H FY2017 which was 23.5% higher compared to 1HFY2016, mainly due to both higher rental and trading revenue for the corresponding period.

Gross profit from Equipment Rental business increased by 41.5% to $3.3m in 2Q FY2017 and 11.7% to $6.4m in 1H FY2017 as compared to the corresponding periods respectively, in line with the higher rental revenue generated.

Gross profit from Trading business increased by 4.2% to $1.2m in 2Q FY2017 and 47.6% to $4.1m in 1H FY2017 as compared to the corresponding periods, mainly due to better product mix and higher trading revenue respectively.

Net (Loss) Profit

The Group registered net loss after tax of $0.5m in 2Q FY2017 and net profit after tax of $1.4m for 1H FY2017. This was mainly due to the net impact of the following:

  1. higher gross profit;

  2. lower other operating income in 2Q FY2017 due to lower gain on disposal of equipment, and higher other operating income in 1H FY2017 from higher servicing income respectively;

  3. lower selling and administrative expenses for 1H FY2017 as a result of cost reduction initiatives;

  4. high other operating expenses mainly from unrealised fair value loss on foreign currency contracts recorded in 2Q FY2017

  5. higher finance costs due to increase in financing of rental fleet

  6. higher income tax expenses.

Statement Of Financial Position

Current assets
As at 31 December 2016, total current assets amounted to $67.4m or 33.5% of total assets. Current assets comprised mostly of cash and bank balances, trade receivables and inventories. Total current assets decreased by $25.8m as compared to 30 June 2016 mainly due to decrease in inventories and cash and bank balances.

Non-current assets
As at 31 December 2016, non-current assets amounted to $134.1m or 66.5% of our total assets. Non-current assets comprised mostly of fixed assets and investments. Total non-current assets increased by $4.9m mainly due to increase in rental fleet.

Current liabilities
As at 31 December 2016, current liabilities amounted to $44.9m or 57.4% of our total liabilities. Current liabilities comprised mostly of bills payable, other payables, current portion of bank loans and finance leases. Total current liabilities decreased by $21.3m as compared to 30 June 2016, mainly due to repayment of bills payable.

Non-current liabilities
As at 31 December 2016, non-current liabilities amounted to approximately $33.4m or 42.6% of our total liabilities. Non-current liabilities comprised mostly of non-current portion of bank loans, finance leases and deferred tax. Total non-current liabilities remained relatively unchanged as compared to 30 June 2016.

Working Capital
As at 31 December 2016, the Group registered a positive working capital of $22.5m as compared to that of $27.0m as at 30 June 2016.

Equity
The Group's equity increased from $122.8m as at 30 June 2016 to $123.3m as at 31 December 2016 mainly due to the total comprehensive income recorded for 1H FY2017.

Commentary On Current Year Prospects

With economic outlook and business environment continue to be uncertain, the Group expects the markets we operate to remain challenging.

Balance Sheet

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