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

Consolidated Statement Of Comprehensive Income For The Third Quarter And Nine Months Ended 30 September 2018

Balance Sheet

Review Of Performance

STATEMENTS OF FINANCIAL POSITION

Comparing 30 September 2018 with 31 December 2017 figures:

  1. The decrease in property, plant and equipment was due mainly to depreciation in 9M 2018.
  2. The decrease in investment properties was due to disposal of a strata industrial unit in 3Q 2018 and reclass of 2 strata industrial units held at 63 Hillview Avenue, Lam Soon Industrial Building, to investment properties held for sale.
  3. The increase in trade and other receivables was due mainly to higher receivables in piling business.
  4. The increase in inventories was attributed to the commencement of PGM refinery activity in 3Q 2018.
  5. The decrease in cash and cash equivalents was due mainly to repayment of loans, dividend payment and net cash used in operating activities.
  6. The increase in investment properties held for sale relates to the reclassification of committed disposal of 2 strata industrial units at 63 Hillview Avenue held by the Company's subsidiary, QF 1 Pte Ltd, during the period.
  7. The decrease in loans and borrowings was attributed mainly to loan redemption and repayments of long-term loans and borrowings.
  8. Trade and other payables were decreased due mainly to repayment of bridging and shareholder loan to a related party and payment made to other creditors. The decrease was negated by higher deposit payment received during the period.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Comparing 3Q/9M 2018 figures with 3Q/9M 2017 figures:

  1. Revenue decreased by $32.3 million or 65% from $49.6 million to $17.3 million in 9M 2018 and $6.8 million or 51% from $13.5 million to $6.7 million in 3Q 2018. The decrease was due mainly to the following:
    • The absence of revenue recognised by the Group's joint operation with SB Procurement Pte Ltd (as announced via SGXNET on 18 May 2014) under construction business as the construction project was completed in 2Q 2017;
    • Cessation of rental income generated from the Group's investment property - PoMo,due to the divestment of this property (divestment of "PoMo") in 4Q 2017; and
    • Lower sales from recycling businesses was mainly due to relocation of the Group's recycling plant.
  2. The Group's gross profit dropped by $9.6 million or 69% from $13.9 million to $4.3 million in 9M 2018 and $2.6 million or 61% from $4.2 million to $1.6 million in 3Q 2018, was attributed mainly to the reduced rental income resulting from the divestment of PoMo in 4Q 2017 and construction activity as a result of the completion of the construction project from the joint operation with SB Procurement Pte Ltd (as announced via SGXNET on 18 May 2014) in 2Q 2017.

    The Group's gross profit margin dropped in 3Q/9M 2018 mainly attributed to construction and property investments businesses and the decrease was partially offset by the improvement in the gross profit margin from the Group's recycling businesses.

  3. The general and administrative expenses is lower in 3Q/9M 2018 due mainly to warehouse and office relocation and restoration expenses incurred in 3Q/9M 2017 and lower bank charges. The decrease was further attributed to the divestment of PoMo in 4Q 2017.
  4. The decrease of other expenses due mainly to absence of fair value loss of investment properties held at 63 Hillview Avenue, Lam Soon Building in 9M 2018.
  5. The decrease in finance costs for 3Q/9M 2018 was attributed mainly to lower term loan interests resulted from the significant redemption of term loans in 4Q 2017.
  6. Other income and selling and distribution expenses for 3Q/9M 2018 were generally comparable to 3Q/9M 2017.

CONSOLIDATED STATEMENT OF CASH FLOWS

Comparing 3Q/9M 2018 figures with 3Q/9M 2017 figures:

  1. The net cash outflows from operating activities in 3Q/9M 2018 and the net cash inflows from operating activities in 3Q/9M 2017 due mainly to changes in working capital.
  2. The lower net cash inflows from investing activities in 3Q/9M 2018 compare to 3Q/9M 2017 were due mainly to absence of repayment of quasi-equity loan from a related company and lower proceeds received from disposal of investment properties held for sale.
  3. In 9M 2018, the lower of net cash outflows from financing activities was due mainly to lesser interest payment and lower repayment of short term and long term loans and borrowings, partially negated by dividend payment during the period.

    In 3Q 2018, the lower of net cash outflows from financing activities was due mainly to lesser interest payment and absence of repayment of loans from a related party and a director, partially negated by higher repayment of long term loans and borrowings during the period.

Commentary On Current Year Prospects

The Company expects the market environment to remain challenging and difficult in the next 12 months. The Company will continue to focus and seek opportunities in growing its existing recycling businesses.