Sin Heng Heavy Machinery Limited

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Operations Review
Extracted from Annual Report 2021

The Company is also pleased to accept a letter of offer ("Letter") from JTC Corporation ("JTC") to renew the lease for the property at 26 Gul Road, Singapore 629346 for a further term of 20 years from October 2025. Pursuant to the Letter, the Company has been granted a 3-year building period by JTC, and will take this opportunity to further improve operational effectiveness through investing in new building structures and machineries to at the property.

At the end of FY2021, the Group had a total fleet size of 307 units of cranes and aerial lifts, compared to a total fleet size of 298 units of cranes and aerial lifts in FY2020. The Group continues to streamline and update the rental fleet to better capture any emerging opportunities in the market.

Financial Performance

For the financial year ended 31 December 2021, the Group has recorded revenue of $53.7 million (2020: $53.3 million) and a net profit of $3.8 million (2020: $1.2 million) while earnings per share was 3.31 cents (2020: 1.05 cents).

Profit or Loss

Other income decreased by 57.6% in FY2021, as there was lower government grant (job support scheme) income received compared to FY2020, and the absent of foreign exchange gain.

Selling expenses decreased by 21.5% in FY2021, due to lower selling and travelling expenses incurred as a result of the border restrictions and movement control measures in place due to the COVID-19 pandemic.

Administrative expenses were comparable to FY2020, with a slight increase by 2.3% in FY2021, due to higher salary and related expenses.

Other operating expenses had increased by 164.7% in FY2021, which was mainly due to write-back of allowance for doubtful debts, and a net foreign exchange loss recorded in FY2021 as compared to a net foreign exchange gain recorded in FY2020.

Finance costs had decreased by 61.3% in FY2021 compared to FY2020 due to lower lease interest expense as certain lease liabilities were fully repaid during the year.

Financial Position

Current assets as at 31 December 2021 had slightly decreased due to lower trade receivables and inventories, partially offset by higher cash and cash equivalents and financial assets measured at fair value through profit or loss.

Non-current assets as at 31 December 2021 had decreased due to the depreciation charged on property, plant and equipment for the year, offset by capitalisation of a rightof-use asset.

Current liabilities as at 31 December 2021 had decreased as a result of repayment of lease liabilities, partially offset by an increase in other payables.

Non-current liabilities as at 31 December 2021 had increased mainly due to recognition of a new lease liability and an increase in deferred tax liabilities.

As at 31 December 2021, total equity decreased by $3.7 million compared to prior year due to payment of dividend, offset against net profit for the year.

As at 31 December 2021, the Group registered a positive working capital of $56.1 million as compared to that of $54.3 million as at 31 December 2020. The Group has managed to maintain its net cash position as at 31 December 2021.

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