Enviro-Hub Holdings Ltd

 

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Financial Statements And Related Announcement - Third Quarter Results

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Unaudited Third Quarter Financial Statements Announcement

Statement Of Comprehensive Income For The Third Quarter And Nine Months Ended 30 September 2016

Balance Sheet

Review Of Performance

STATEMENTS OF FINANCIAL POSITION

Comparing 30 September 2016 with 31 December 2015 figures:

  1. The decrease in property, plant and equipment was due mainly to depreciation in 9M 2016.

  2. The decrease in inventories was due mainly to reduced level of materials held by the recycling business.

  3. Current and non-current trade and other receivables was lower due to lower construction related receivables recorded by Leong Hin Builders Pte Ltd relating to the joint operation with SB Procurement Pte Ltd (as announced via SGXNET on 18 May 2014) for the construction of a 7-storey multi-user general industrial development located at 60 Jalan Lam Huat, Singapore, as receivables were collected. The slower piling business at the back of fewer on-going piling projects during 9M 2016 also contributed to the lower trade and other receivables.

  4. The decrease in short term loans and borrowings was attributed mainly to repayment of trust receipts during 9M 2016. Long term loans and borrowings were lower due to term loans repayment made during 9M 2016.

  5. Trade and other payables were higher due mainly to loan proceeds received from related party and related company.

  6. As at 30 September 2016, the Group's current liabilities exceeded its current assets by $42.7 million. Notwithstanding this, the financial statements of the Group have been prepared on a going concern basis because the Board of Directors, having assessed the financial position and funding options of the Group, believes that the Group has adequate resources to continue as a going concern for the foreseeable future. The liquidity requirements of the Group are expected to be met from cash inflows from operating activities, extension/renewal and restructuring of existing banking facilities, and continued financial support from the major shareholder of the Company.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Comparing 3Q/9M 2016 figures with 3Q/9M 2015 figures:

  1. For 9M 2016, revenue decreased by $5.8 million or 7% from $85.2 million to $79.5 million. The decrease in revenue was due mainly to the drop in trading of low margin recycling materials and slower piling business. However, the decrease was partially negated by higher revenue recorded from the Group's joint operation with SB Procurement Pte Ltd (as announced via SGXNET on 18 May 2014) under the construction business. Revenue from the joint operation was first recognised from 2Q 2015.

    For 3Q 2016, revenue decreased by $9.9 million or 33% from $30.3 million to $20.3 million due mainly to lower sales from the recycling business.

  2. Gross profit for 9M 2016 improved by $5.1 million or 48% from $10.7 million to $15.8 million, which was attributed mainly to the property investments and management, construction and piling businesses. Gross profit from property investments and management was higher due mainly to property tax refund in respect of prior year during 1Q 2016 and improved occupancy rates during 9M 2016 while the construction business recorded higher gross profit from the joint operation with SB Procurement Pte Ltd (as announced via SGXNET on 18 May 2014), where revenue from the joint operation was first recognised from 2Q 2015. The gross profit was further lifted by reduced gross loss incurred by the piling business as compared to 9M 2015.

    For 3Q 2016, the increase in gross profit was attributed mainly to improved revenue and lower operating costs recorded by the property investments and management business.

  3. Other income for 3Q/9M 2016 was higher due mainly to the disposal of 0.5% interest in Carros Project Management Pte Ltd for $1.1 million in 3Q 2016. Post disposal, the Company would still retain 12.0% interest in Carros Project Management Pte Ltd.

  4. For 3Q/9M 2016, general and administrative expenses were lower due to the absence of expenses related to proposed acquisitions in 2015, which were aborted (as announced via SGXNET on 3 November 2015), and general reduction in expenses.

  5. Selling and distribution expenses, other expenses and finance costs for 3Q/9M 2016 were generally comparable to 3Q/9M 2015.

CONSOLIDATED STATEMENT OF CASH FLOWS

Comparing 2Q/1H 2016 figures with 2Q/1H 2015 figures:

  1. Net cash inflows from operating activities was higher in 3Q/9M 2016 compared to 3Q/9M 2015 due to improved performance achieved by the Group and changes in working capital.

  2. Cash inflows from investing activities were higher in 3Q/9M 2016 compared to 3Q/9M 2015 due mainly to higher proceeds from disposal of property, plant and equipments and proceeds from disposal of other investments, which was related to the 0.5% interest in Carros Project Management Pte Ltd.

  3. For 9M 2016, the increase in net cash outflows from financing activities was attributed to higher repayment of loans and borrowings. However, net cash outflows was partially offset by loan proceeds from a related party and a related company.

    For 3Q 2016, the increase in net cash outflows from financing activities was attributed to higher repayment of loans and borrowings and repayment of loans from a related party and a related company.

Commentary On Current Year Prospects

The Group will actively review and manage its investments and operations, and explore expansion opportunities in the property segment. At the same time, the management will closely monitor its operating costs for the Group's operations.