Revenue for 2016 decreased by $10.2 million or 9% from $114.1 million to $103.9 million, which was mainly due to the lower contribution in low margin recycling trading sales and a 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) for the construction of a 7 storey multi-user industrial development located at 60 Jalan Lam Huat, Singapore. Nevertheless, the Group's gross profit margin has increased by 41% from $15.1 million to $21.3 million. The improvement in gross profit margin was attributed to a reduction in operating expenditure in both property and construction business segments.
The Group's bottom line was affected by a net reduction in fair value of the Group's investment properties of approximately $12.7 million in the current financial year due to the slowdown in property market.
Property Investments and Management Division
This division is engaged in developing, investing and managing the Group's investment properties. Segmental profit decreased significantly from $20.2 million to $1.3 million due to fair value loss recognised for the Group's strata industrial units held at 63 Hillview Avenue, Lam Soon Industrial Building, as well as a lower fair value gain on our investment property at 1 Selegie Road, PoMo. This is due to the sluggish Singapore property market in the current financial year.
Piling Contracts, Construction, Rental & Servicing of Machinery Division
This division is involved in providing piling services, as well as the rental and sale of cranes and heavy machinery for the construction industry. The segmental profit increased from $0.1 million to $2.7 million, as a result of higher revenue and gross profit generated from the construction project at 60 Jalan Lam Huat.
Recycling, Refining and Trading of Metals/E-waste Division
These divisions focus on providing e-waste management solutions and recycling services. The segmental profit increased significantly from $0.9 million to $3.6 million. The improved performance was attributed to better margins achieved, gain on disposal of plant and equipment, and decrease in operating expenses in FY2016.
Plastics to Fuel Refining Division
This division engaged in converting plastic waste to usable fuel oil, liquid petroleum gas and coke. The segment's recorded losses decreased significantly from $12.3 million in FY2015 to $0.6 million in FY2016, due to recognition of impairment losses on property, plant and equipment, intangible assets and other assets as a result of delay in the commencement of PTF refining mass production in FY2015. The delay was due to the slump in oil prices and instability of the global economy.
Under the current uncertain economic environment, the Group will continue to control operating costs, improve productivity and rationalise its operations with the ultimate aim of enhancing value and delivering greater value to all stakeholders. The Group is committed to monitoring and managing its financial position closely in meeting its commitments when they fall due.