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FY 2017 compared with FY 2016 Performance and Segmental Review

Total revenue increased by $33.0 million (+28%) mainly contributed from the Civil Engineering segment which recorded a 27% rise in revenue to $149.6 million. This was attributable to the much higher contribution from Changi Airport JV project which has progressed to a more active phase in 2017. Revenue for Property Development segment was related to sales of unit at Ark@Gambas. Revenue from Investment property segment remained insignificant.

Gross profit decreased by $3.2 million ( -11%) to $27.1 million for the current financial year, mainly due to the drop in gross profit from the Civil Engineering segment as reversal of maintenance provision was lower than FY2016 and the lower gross margin for the ongoing projects. The contribution from Property Development and Investment properties is not significant.

Administrative expenses were $5.3 million, marginally lower than FY2016 mainly due to lower performance bonus provision offset by the higher staff costs and share of administration costs of the Changi Airport JV project.

Other income was $0.8 million lower mainly due to the reduction in interest income.

Other operating costs increased by $1.5 million mainly due to the higher provision for impairment loss of held-to-maturity investment securities of $0.8 million and exchange loss of $0.7 million which arose from the revaluation of USD holdings for USD committed material purchases.

The share of profits from the joint venture was only $490,000 as the profits of the joint venture residential project, The Skywoods, has been fully recognized in previous years. Current year profit was relating to the write back of the project cost.

Profit before taxation decreased by $16.3 million to $24.0 million, resulting mainly from $11.0 million lower profit from Joint Venture and lower gross profit of about $3.7 million from the civil engineering projects, higher provision of impairment of loss for investment securities.

FINANCIAL POSITION AND CASH FLOW REVIEW

Property, plant and equipment increased by $19.4 million mainly due to the acquisition of $6.5 million office units for own use, $2.7 million construction cost for warehouse and about $14 million of various plant and equipment to meet the requirement of ongoing projects.

Investment in Joint Venture was $14.0 million lower due to the dividend received from the Skywoods JV project.

Cash and short term deposits reduced by $73.9 million to $132.1 million as at 31 December 2017. The decrease was mainly due to the cash outflow for dividend payment of $63.7 million, acquisition of property and equipment of $21.2 million, net cash outflows for operations of $0.4 million offset by the $14.5 million dividend income from the Joint Venture.