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Third Quarter Financial Statement And Dividend Announcement 2016

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Third Quarter 2016 Financial Statements and Dividend Announcement

Profit & Loss


N.M. denotes "Not Meaningful"

Note:

The exchange rate of S$1=IDR 9,522 (30 Sep 2015: S$1=IDR 10,274) was used for translating IMAS's assets and liabilities at the balance sheet date and S$1=IDR 9,746 (30 Sep 2015: S$1=IDR 9,666) was used for translating the results for the period.

Balance Sheet

Review of Performance

Further to the announcement made on 4 August 2016 on the Group's financial statements for FY 2014 and FY2015 being reviewed by the Financial Reporting Surveillance Programme ("FRSP"), the Company has made a separate announcement on 12 October 2016 that the ACRA advisory letter has been issued to the Company requiring restatement of previous years financial statements from 2014 to 2015, with consequential impact to 2016 financial statements. The Company is working with the Auditor on the implementation of ACRA's findings. This will be executed by April 2017 following consultations with the auditors.

3rd Quarter 2016 (3Q 2016) vs. 3rd Quarter 2015 (3Q 2015)

Profit & Loss Statement

IMAS's 3Q 2016 revenue was S$351.7 million as compared to S$409.0 million in 3Q 2015. Lower revenue from IMAS was mainly due to lower passenger vehicle and heavy duty trucks and equipment sales. The Group (excluding IMAS) registered lower revenue of S$38.1 million as compared to S$40.5 million in 3Q 2015 and was mainly due to lower revenue from the utilities segment. The Consolidated Group revenue was S$389.8 million, 13.3% lower than 3Q 2015's S$449.5 million.

In line with lower revenue, IMAS's 3Q 2016 cost of sales was S$287.5 million as compared to previous period's S$343.7 million while the Group's (excluding IMAS) cost of sales was S$30.6 million as compared to S$33.4 million in 3Q 2015. Accordingly, the Consolidated Group's cost of sales decreased from S$377.1 million in 3Q 2015 to 3Q 2016's S$318.1 million and registered lower gross profit of S$71.7 million in 3Q 2016 as compared to S$72.5 million in 3Q 2015.

IMAS's 3Q 2016 "other income" was S$10.3 million as compared to S$15.5 million in 3Q 2015. This was mainly due to lower sales incentives from car manufacturers. The Group's (excluding IMAS) "other income" was S$3.1 million as compared to S$7.8 million in 3Q 2015 was mainly due to lower interest income as compared to the previous period. The Consolidated Group's "other income" was S$11.4 million in 3Q 2016 as compared to 3Q 2015's S$21.3 million.

IMAS's 3Q 2016 "general and administrative expenses" was S$33.8 million as compared to S$31.2 million in 3Q 2015. Higher expenses were mainly due to higher manpower costs and provision for doubtful debts. The Group's (excluding IMAS) "general and administrative expenses" was broadly the same as previously period's S$4.1 million. The Consolidated Group's "general and administrative expenses" was S$41.9 million as compared to 3Q 2015's S$39.3 million.

IMAS's 3Q 2016 "other operating expenses" was S$32.1 million as compared to 3Q 2015's S$37.0 million. Lower expenses were mainly due to lower marketing related expenses. The Group's (excluding IMAS) "other operating expenses" was S$6.0 million as compared to S$5.6 million in 3Q 2015 and was mainly due to the higher land and building taxes. The Consolidated Group's "other operating expenses" was S$38.1 million as compared to 3Q 2015's S$42.6 million.

The Consolidated Group's 3Q 2016 "share of associate's results" was S$2.9 million loss as compared to 3Q 2015's S$3.9 million loss and was mainly due to lower losses from Associated Companies in the Automotive segment.

IMAS's 3Q 2016 "finance costs" was S$21.1 million as compared to S$20.2 million in 3Q 2015 and the Group's (excluding IMAS) "finance costs" was S$11.0 million as compared to S$15.3 million in 3Q 2015. The Consolidated Group's "finance costs" was S$32.1 million as compared to S$35.5 million in 3Q 2015 and lower finance costs was mainly due to repayment of external bank borrowings and redemption of April 2016 EMTN amounted to S$175 million.

IMAS's 3Q 2016 net loss was S$14.8 million as compared to S$12.9 million loss in 3Q 2015 and was mainly due to lower vehicle revenue. The Group's (excluding IMAS) net loss was S$15.8 million as compared to S$15.2 million loss in 3Q 2015. The Consolidated Group's net loss for 3Q 2016 was S$28.3 million as compared to 3Q 2015's S$26.1 million loss.

9 months 2016 (YTD Sep 2016) vs. 9 months 2015 (YTD Sep 2015)

Profit & Loss Statement

IMAS's YTD Sep 2016 revenue was S$1,172.8 million as compared to S$1,393.0 million in YTD Sep 2015. Lower revenue was mainly due to lower passenger vehicle sales and heavy duty trucks and equipment sales. The Group (excluding IMAS) registered lower revenue of S$115.1 million as compared to S$124.1 million in YTD Sep 2015 and mainly due to lower revenue from Industrial Parks and utilities segment. Consolidated Group revenue was S$1,287.9 million, representing 15.1% lower than YTD Sep 2015's S$1,517.1 million.

In line with lower revenue, IMAS's YTD Sep 2016 cost of sales was S$970.0 million as compared to previous period's S$1,184.8 million and the Group's (excluding IMAS) cost of sales was S$94.8 million as compared to S$101.1 million in YTD Sep 2015. Consolidated Group's cost of sales was S$1,064.8 million, lower than YTD Sep 2015's S$1,285.9 million. Consequentially, the Consolidated Group registered a lower gross profit of S$223.1 million in YTD Sep 2016 as compared to S$231.2 million in YTD Sep 2015.

IMAS's YTD Sep 2016 "other income" was S$36.9 million as compared to S$56.5 million in YTD Sep 2015. The difference arises mainly due to one-time gain on disposal of non-core investment and higher sales incentives from car manufacturers in 2015. The Group's (excluding IMAS) "other income" was S$8.0 million as compared to S$17.5 million in YTD Sep 2015 and was mainly due to lower interest income as compared to the previous period. The Consolidated Group's "other income" was S$44.9 million in YTD Sep 2016 as compared to YTD Sep 2015's S$74.0 million.

IMAS's YTD Sep 2016 "general and administrative expenses" was S$98.0 million as compared to S$93.0 million in YTD Sep 2015. Higher expenses were mainly due to higher manpower costs and provision for doubtful debts. The Group's (excluding IMAS) "general and administrative expenses" was S$13.0 million as compared to YTD Sep 2015's S$13.9 million and mainly due to lower manpower costs. The Consolidated Group's "general and administrative expenses" was S$123.1 million as compared to YTD Sep 2015's S$119.0 million.

IMAS's YTD Sep 2016 "other operating expenses" was S$98.7 million as compared to YTD Sep 2015's S$110.0 million. Lower expenses were mainly due to lower marketing related expenses. The Group's (excluding IMAS) "other operating expenses" was S$16.9 million as compared to S$15.9 million in YTD Sep 2015 and was mainly due to higher land and building taxes. The Consolidated Group's "other operating expenses" was S$115.6 million as compared to YTD Sep 2015's S$125.9 million.

The Consolidated Group's YTD Sep 2016 "share of associate's results" was S$6.0 million loss as compared to YTD Sep 2015's S$10.6 million loss due to lower losses from Associated Companies in the Automotive segment.

IMAS's YTD Sep 2016 "finance costs" was S$61.2 million as compared to S$57.6 million in YTD Sep 2015. The Group's (excluding IMAS) "finance costs" was S$38.1 million as compared to S$48.7 million in YTD Sep 2015. The Consolidated Group's "finance costs" was S$99.3 million as compared to S$106.4 million in YTD Sep 2015 and lower financing cost was due to repayment of external bank borrowings and redemption of April 2016 EMTN amounted to S$175 million.

IMAS's YTD Sep 2016 net loss was S$26.1 million as compared to S$22.0 million loss in YTD Sep 2015 and was mainly due to lower sales incentive from car manufacturer and one-time gain of disposal of non-core investment in the previous period. The Group's (excluding IMAS) net loss was S$47.4 million as compared to S$46.9 million loss in YTD Sep 2015 and was mainly due to lower contribution from the Industrial Parks and Utilities segments. The Consolidated Group's net loss for YTD Sep 2016 was S$72.5 million as compared to YTD Sep 2015's S$67.7 million net loss.

Balance Sheet

The Group's total assets of S$4,916.4 million as at 30 September 2016 were S$39.7 million lower than as at the previous year end. Other non-current assets decreased by S$493.3 million and was mainly due to the divestment of the Group's non-core investment. Current assets increased by S$244.2 million to S$2,320.8 million and was mainly due to the other receivables from the divestment of the Group's non-core investment and cash and bank balances arising from financing activities.

The Group' total liabilities of S$2,983.7 million as at 30 September 2016 were S$61.8 million higher than as at the previous year-end and was mainly due to the increased borrowings. The Group's borrowings and debt securities as at 30 September 2016 were S$2.5 billion of which S$1.0 billion relates to IMAS' car rental and financial services business.

Cash Flow Statement

Net cash used in operating activities was S$118.7 million as compared to S$114.7 million used in the previous period.

Net cash generated from investing activities was S$77.1 million and was mainly due to proceeds from divestment of Group's non-core investment.

Net cash generated from financing activities was S$47.1 million mainly from the proceeds from issue of debt securities and borrowings.

Commentary On Current Year Prospects

IMAS's passenger car results have been affected by the lack of new product launch versus the competitors. IMAS's commercial and heavy duty truck and equipment businesses continue to be affected by the reduced consumer and economic sentiment. However, contributions from its financing services, vehicle service, car rental and logistics businesses are continuing to grow.

The refocusing of our industrial parks business continues. The utilities business has benefited from lower energy prices that may not continue. We continue to pursue land sales in Bintan Resorts.