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Third Quarter Financial Statement And Dividend Announcement 2018

Financials Archive

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Profit & Loss

Balance Sheet

Review of Performance

3rd Quarter 2018 (3Q 2018) vs. 3rd Quarter 2017 (3Q 2017)

Profit & Loss Statement

GV Group's 3Q 2018 revenue from IMAS was S$401.3 million, 1% higher as compared to S$396.6 million in 3Q 2017. In Rupiah term, the revenue increased by 10%. Higher revenue was mainly due to higher truck and heavy duty equipment sales, after sales services revenue, financial services revenue and higher vehicle rental revenue but partially offset by lower passenger vehicle sales. The Group (excluding IMAS) registered higher revenue of S$42.2 million as compared to S$40.4 million in the previous period and was mainly due to higher revenue from ferry services and housing project in Batam. The Consolidated Group revenue was S$443.5 million, higher than 3Q 2017's S$437.0 million.

IMAS's 3Q 2018 cost of sales was S$321.8 million as compared to S$321.8 million in 3Q 2017. The Group's (excluding IMAS) cost of sales was S$31.4 million as compared to S$32.8 million in 3Q 2017. The Consolidated Group's cost of sales was S$353.2 million in 3Q 2018 as compared to 3Q 2017's S$354.7 million. The Consolidated Group's cost of sales to revenue ratio was 0.80 in 3Q 2018 as compared to 0.81 in 3Q 2017. The Consolidated Group's gross profit was S$90.3 million in 3Q 2018 as compared to S$82.3 million in 3Q 2017 and was due to contributions from higher margin segments such as vehicle after sales services, financial services and vehicle rental related businesses.

IMAS's 3Q 2018 "other income" was S$16.5 million as compared to S$15.9 million in 3Q 2017 and was mainly due to foreign exchange gain. The Group's (excluding IMAS) "other income" was S$1.6 million expenses as compared to S$0.4 million income in 3Q 2017 and was mainly due to higher foreign exchange losses as compared to the previous period. The Consolidated Group's "other income" was S$14.0 million in 3Q 2018 as compared to 3Q 2017's S$15.3 million.

IMAS's 3Q 2018 "general and administrative expenses" was S$36.6 million, marginally higher than 3Q 2017's S$36.0 million. The Group's (excluding IMAS) "general and administrative expenses" was S$3.8 million as compared to 3Q 2017's S$4.0 million and was mainly due to lower professional fees. The Consolidated Group's "general and administrative expenses" was S$46.1 million as compared to 3Q 2017's S$45.2 million.

IMAS's 3Q 2018 "other operating expenses" was S$30.3 million as compared to 3Q 2017's S$32.0 million. Lower expenses were mainly due to lower depreciation of property, plant and equipment. The Group's (excluding IMAS) "other operating expenses" was S$6.3 million as compared to 3Q 2017's S$6.1 million. The Consolidated Group's "other operating expenses" was S$36.6 million as compared to 3Q 2017's S$38.0 million.

The Consolidated Group's 3Q 2018 "share of associated companies' result" was S$2.4 million profit as compared to 3Q 2017's S$13.3 million loss. IMAS ceased equity accounting on one of its loss making associate as the accumulated losses have fully eliminated its investment cost.

IMAS's 3Q 2018 "finance costs" was S$27.8 million as compared to 3Q 2017's S$23.2 million and the Group's (excluding IMAS) "finance costs" was S$7.2 million as compared to 3Q 2017's S$7.3 million. The Consolidated Group's "finance costs" was S$35.0 million as compared to S$30.5 million in 3Q 2017 and was mainly due to increased borrowings for capital expenditure in the automotive segment.

IMAS registered net profit of S$4.0 million in 3Q 2018 as compared to S$18.4 million net loss in 3Q 2017 and was mainly due to contributions from higher margin segments such as vehicle after sales services, financial services and vehicle rental related businesses, and non-equity accounting of loss making associate company. The Group's (excluding IMAS) net loss was S$12.6 million as compared to 3Q 2017's S$13.0 million loss and was mainly due to higher revenue but was partially offset by higher foreign exchange losses. The Consolidated Group's net loss attributable to equity holders of the Company was S$13.9 million for 3Q 2018 as compared to 3Q 2017's S$29.9 million.

9 Months 2018 (YTD Sep 2018) vs. 9 Months 2017 (YTD Sep 2017)

Profit & Loss Statement

GV Group's YTD Sep 2018 revenue relating to IMAS was S$1,203.1 million, 1% higher as compared to S$1,187.2 million in previous period. In Rupiah term, the revenue increased by 11%. Higher revenue was mainly due to higher truck and heavy duty equipment sales, after sales services revenue, financial services revenue and higher vehicle rental revenue but partially offset by lower passenger vehicle sales.

The Group (excluding IMAS) registered higher revenue of S$123.6 million as compared to S$118.5 million in YTD Sep 2017 and was mainly due to higher revenue from the ferry services, resort management services and housing project in Batam. The Consolidated Group revenue was S$1,326.7 million, 2% higher than YTD Sep 2017's S$1,305.7 million.

IMAS's YTD Sep 2018 cost of sales was S$959.4 million as compared to previous period's S$955.0 million. The Group's (excluding IMAS) cost of sales was S$95.8 million as compared to S$99.1 million in YTD Sep 2017. In line with the revenue, the Consolidated Group's cost of sales increased from S$1,054.1 million in YTD Sep 2017 to YTD Sep 2018's S$1,055.2 million. The Consolidated Group's cost of sales to revenue ratio was 0.80 in YTD Sep 2018 as compared to 0.81 in YTD Sep 2017. The Consolidated Group's gross profit was S$271.5 million in YTD Sep 2018 as compared to S$251.6 million in YTD Sep 2017 and was in line with higher revenue.

IMAS's YTD Sep 2018 "other income" was S$50.8 million as compared to S$45.4 million in YTD Sep 2017 and was mainly due to foreign exchange gain. The Group's (excluding IMAS) "other income" was S$6.0 million expenses as compared to S$6.3 million expenses in YTD Sep 2017 and was mainly due to lower unrealised foreign exchange losses as compared to the previous period. The Consolidated Group's "other income" was S$43.9 million in YTD Sep 2018 as compared to YTD Sep 2017's S$38.1 million.

IMAS's YTD Sep 2018 "general and administrative expenses" was S$105.9 million as compared to S$107.9 million in YTD Sep 2017. Lower expenses were mainly due to lower depreciation of property, plant and equipment, management fees and licensing expenses but were partially offset by higher provision of doubtful debts. The Group's (excluding IMAS) "general and administrative expenses" was S$12.3 million as compared to YTD Sep 2017's S$12.2 million and was due to higher salary related expenses but was mitigated by lower professional fees. The Consolidated Group's "general and administrative expenses" was S$135.4 million as compared to YTD Sep 2017's S$136.0 million.

IMAS's YTD Sep 2018 "other operating expenses" was S$94.4 million as compared to YTD Sep 2017's S$96.8 million. Lower expenses were mainly due to lower packing and delivery expenses, depreciation of property, plant and equipment and salary related expenses. The Group's (excluding IMAS) "other operating expenses" was S$17.0 million as compared to YTD Sep 2017's S$18.8 million and was mainly due to write back of accrued expenses previously recorded, now no longer required. The Consolidated Group's "other operating expenses" was S$111.4 million as compared to YTD Sep 2017's S$115.5 million.

The Consolidated Group's YTD Sep 2018 "share of associated companies' result" was S$7.5 million profit as compared to YTD Sep 2017's S$43.5 million loss. IMAS ceased equity accounting on one of its loss making associate as the accumulated losses have fully eliminated its investment cost.

IMAS's YTD Sep 2018 "finance costs" was S$76.7 million as compared to YTD Sep 2017's S$67.4 million and the Group's (excluding IMAS) "finance costs" was S$21.3 million as compared to YTD Sep 2017's S$27.3 million. The Consolidated Group's "finance costs" was S$98.0 million as compared to S$94.7 million in YTD Sep 2017 and was mainly due to increased borrowings for capital expenditure in the automotive segment.

IMAS registered net profit of S$7.7 million in YTD Sep 2018 as compared to S$54.4 million net loss in YTD Sep 2017 and was mainly due to higher revenue and non-equity accounting of loss making associate company. The Group's (excluding IMAS) net loss was S$40.2 million as compared to YTD Sep 2017's S$55.0 million loss and was mainly due to higher revenue and lower financing costs and operating expenses. The Consolidated Group's net loss attributable to equity holders of the Company was S$45.3 million for YTD Sep 2018 as compared to YTD Sep 2017's S$102.6 million.

Balance Sheet

The Group's total assets of S$4,813.8 million as at 30 September 2018 were S$304.1 million higher than as at the previous year-end. Other non-current assets increased by S$50.6 million mainly due to reclassification of associate to equity investments and increased in value of the Group's quoted equity investments. Current assets increased by S$109.2 million mainly due to the increased in trade and other receivables and financing receivables.

The Group' total liabilities of S$3,182.7 million as at 30 September 2018 were S$385.1 million higher than the previous year-end and was mainly due to the increased in borrowings for capital expenditure and for the financial service business. The Group's borrowings and debt securities as at 30 September 2018 were S$2.6 billion of which S$1.4 billion relates to IMAS' car rental and financial services business.

Cash Flow Statement

Net cash used in operating activities was S$214.9 million as compared to S$74.0 million generated from in the previous period.

Net cash used in investing activities was S$162.8 million and was mainly due to capital expenditure.

Net cash generated from financing activities was S$349.7 million mainly from the proceeds from issue of debt securities and borrowings.

Commentary On Current Year Prospects

While IMAS's truck and heavy duty equipment, car rental, and spare parts and servicing businesses have all registered good growth, higher contributions from passenger vehicle segment, with launch of new vehicle models, is expected towards 1st half of 2019.

We started 2018 with strong tourist arrival into Bintan and registered growth in our Resorts and Ferry segments. Continue with this momentum and development of key industrial clusters in Bintan, we are hopeful that these core business segments will contribute positively to the Group.