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Financials

First Half Financial Statements And Dividend Announcement 2024

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Condensed interim consolidated statement of comprehensive income

Condensed interim consolidated statement of financial position

Review of Performance

Half Year 2024 (1H 2024) vs. Half Year 2023 (1H 2023)

Profit & Loss

The Group revenue was S$93.3 million, 6.0% higher than 1H 2023's S$87.9 million and was mainly due to higher revenue from industrial leases and related income driven by the increased occupancy from the industrial parks segment and higher ferry services and tourism-related services on the continued recovery of travel and tourism in this region. The property development segment also contributed S$1.7 million to the increase.

In line with the increased revenue, the Group's cost of sales increased from S$55.7 million in 1H 2023 to 1H 2024's S$59.2 million. The Group's cost of sales to revenue ratio was 0.63 in 1H 2024, comparable to the corresponding period. Consequentially, the Group's gross profit increased from S$32.2 million in 1H 2023 to S$34.1 million in 1H 2024.

The Group's "other (expenses)/income" was S$10.5 million expenses compared to S$6.0 million income in 1H 2023. This was mainly due to the foreign exchange loss of S$12.4 million in 1H 2024 compared to the foreign exchange gain of S$4.4 million in 1H 2023. The foreign exchange loss was mainly due to the translation of the Group's US Dollar-denominated financial liabilities, where the US Dollar appreciated against the Singapore Dollar in 1H 2024.

The Group's "general and administrative expenses" were S$11.4 million, compared to 1H 2023's S$11.2 million. This was mainly due to higher manpower-related costs and professional fees.

The Group's "other operating expenses" were higher at S$14.6 million compared to 1H 2023's S$13.8 million, mainly due to higher manpower-related costs, repair and maintenance, and marketing-related expenses.

The Group's share of profit from its associate companies decreased from S$13.4 million in 1H 2023 to 1H 2024's S$0.1 million, mainly due to:

1. PT IMAS's profit contribution to the Group in 1H 2024 decreased by S$12.8 million or 97.2% to S$0.4 million as PT IMAS's net profit has decreased from S$29.3 million in 1H 2023 to S$3.3 million in 1H 2024 due to:
   1. Gross profit decreased by S$21.3 million as revenue declined by S$42.8 million from S$1,261.0 million in 1H 2023 to 1H 2024's S$1,218.2 million, mainly due to lower truck and heavy-duty equipment sales and demand for its passenger cars;
   2. Financing costs increased by S$13.3 million from 1H 2023's S$87.0 million to 1H 2024's S$100.3 million, mainly due to higher external bank borrowing rates;
   3. Share of profit from its associated companies has decreased by S$5.3 million; and
   4. Foreign exchange loss of S$1.8 million in 1H 2024 compared to foreign exchange gain of S$2.3 million in 1H 2023.
2. Adjustment to the share of its associate's results to account for unrealised intragroup profit from transactions with the Group's associated company.

The Group's "finance costs" were S$19.1 million, higher than 1H 2023's S$17.6 million. This was mainly due to the higher interest rate on external bank borrowings.

The Group's net loss attributable to owners of the Company was S$29.0 million, compared to 1H 2023's net profit of S$0.8 million.

Financial position

As of 30 June 2024, the Group's total assets were S$1,396.1 million, compared to S$1,399.5 million at the previous year's end.

The Group's intangible assets increased by S$1.5 million due to the acquisition of telecommunication software and systems. Property, plant, and equipment increased by S$19.2 million due to capital expenditures incurred on building, infrastructure, and construction in relation to new factories, partially offset by depreciation. The Group's right-of-use assets and investment properties decreased by S$2.9 million, mainly due to depreciation.

Notwithstanding the investment of S$16.0 million in a new associated company during the period, the Group's associates decreased by S$5.1 million due to the translation loss of S$19.8 million on the translation of PT IMAS's results and net assets from the Indonesian Rupiah to the Singapore dollar, where the Indonesian Rupiah weakened as of 30 June 2024.

The Group's trade receivables increased by S$5.2 million, which aligns with higher revenue. Other receivables increased by S$6.8 million, mainly due to the advances paid to contractors for the construction of new industrial factories, the development of the airport project, the construction of resort-related facilities, and the Solar PV project.

The Group's other non-current assets decreased by S$6.6 million, mainly due to the realisation of prepaid taxes.

As of 30 June 2024, the Group's total liabilities were S$697.6 million, compared to S$651.8 million at the previous year's end. The Group's borrowings increased by S$38.8 million, mainly due to increased bank borrowings obtained to finance the Group's capital expenditures, investments, and working capital.

The Group's trade and other payables increased by S$11.3 million, mainly due to contractors and suppliers working on expanding and constructing new factories in the Group's industrial parks and the ongoing development in Bintan Resorts.

The Group's lease liabilities decreased by S$2.6 million, mainly due to the payment of the principal portion of the lease liabilities. The Group's other non-current liabilities increased by S$2.0 million, mainly due to the increased rental and electricity deposits received from the industrial park tenants for the new factories.

The Group's contract liabilities decreased by S$1.2 million, mainly due to revenue recognition of rental received in advance from the industrial park tenants and the travel agents for tour packages to Bintan Resorts.

Cash Flow

For the period under review, net cash outflow from operating activities was S$22.8 million compared to S$16.3 million generated from the previous period. The net cash outflow in operating activities was due to the payment of income tax and interest amounting to S$29.7 million in the current period.

The Group had a net cash outflow of S$49.2 million from investing activities, compared to S$15.4 million in the previous period. This was mainly due to increased capital expenditures for the construction of new factories, expansion of industrial parks, and new investments.

The Group had a net cash inflow of S$63.3 million from financing activities, compared to an outflow of S$19.3 million in the previous period. The net cash inflow in the current period was mainly due to the utilisation of the Group's new banking facilities obtained during the period but offset by the repayment of existing borrowings and the principal portion of the lease liabilities.

The Group's cash and cash equivalents in the statement of cash flow were S$81.8 million as of 30 June 2024, compared with S$90.6 million as of 31 December 2023.

Liquidity and financial resources

For the financial period ended 30 June 2024, the Group's working capital was mainly financed by internal resources generated from the operation, whilst the Group's capital expenditure in relation to the construction of new factories, expansion of the industrial parks and new investment was financed by both the advance payment from the tenants and bank borrowings. As of 30 June 2024, the cash and cash equivalents in the statement of financial position were S$83.4 million, which decreased by 24% compared to S$109.1 million as of 31 December 2023. The Group's current ratio was approximately 3.0 times (31 December 2023 - 3.5 times).

As of 30 June 2024, the Group's borrowings were S$421.2 million. Borrowings due within one year were S$87.5 million (31 December 2023 - S$71.2 million), and borrowings due after one year were S$333.7 million (31 December 2023 - S$311.2 million). The Group's borrowings were denominated in Singapore dollars and United States dollars, with interest charged on these borrowings ranging from 6.2% to 9.7%. The Group's total debts, including lease liabilities, were S$429.1 million (31 December 2023 - S$392.9 million). As of 30 June 2024, the Group's gearing ratio was 0.6 times (31 December 2023 - 0.5 times, which was calculated on the Group's total debts to total share shareholders' equity (including non-controlling interests). The increase was primarily due to increased bank borrowings to finance the capital expenditure and investment.

Commentary On Current Year Prospects

The demand for industrial spaces in our industrial parks remains robust, and we expect this segment to maintain its strong performance, driven by sustained growth in both industrial lettable spaces and rental yield. In 2024, 116,400 sqm of new industrial spaces will be completed and transferred to the tenants, and another 5,000 sqm is projected for 2025. These expansions and increased industrial activities will contribute to our utilities segment too.

The strong tourist arrivals and tourism activities in our Bintan Resort in 2023 are expected to continue in 2024. The Group expects a full recovery of tourist arrivals by the end of 2024, supported by remaining pent-up demand, increased air connectivity, and a stronger recovery of the Asia-Pacific region.