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Corporate Review

Extracted from Annual Report 2017

Financial Review

Revenue decreased by $42.8 million or 41% from $103.8 million to $61.0 million in FY2017, which was due mainly to the lower revenue generated from the Groupís joint operational construction project for a 7-storey multi-user industrial development located at 60 Jalan Lam Huat which was completed in 2Q 2017. The decrease was further attributed to the reduction of sales volume due to the relocation of the Groupís recycling plant in 2Q 2017 and reduction in volume for low margin sales in the trading of e-waste business during the year. Nevertheless, the Groupís gross profit margin has increased from 20% to 29%. The improvement in gross profit margin was a result of stringent costs control in the Groupís recycling business and construction businesses.

The Groupís attributed loss of $10.2 million was mainly attributed to the reduction in fair value of the Groupís strata investment properties at 63 Hillview Ave, as a result of a slower industrial property market, as well as the loss on disposal of the Groupís subsidiary known as F2S1 Investment Pte Ltd during FY2017. This loss was partially negated by a gain on disposal of the Groupís other investment in a related company.

Segmental Review

Recycling, Refining and Trading of Metals /E-waste Division
This division focuses on providing e-waste management solutions and recycling services. The segmentís profit remained consistent at $3.6 million for both FY2017 and FY2016.

Piling Contracts, Construction, Rental & Servicing of Machinery
This division provides piling services, as well as the rental and sale of cranes and heavy machinery for the construction industry. The segment registered a loss of $0.3 million in FY2017 compared to a profit of $2.7 million in FY2016 due to the completion of a joint operation construction project with SB Procurement Pte Ltd at 60 Jalan Lam Huat in 2Q 2017.

Property Investments and Management Division
This division engages in developing, investing and managing the Groupís investment properties. Segment profitability from the investment properties business segment has decreased significantly from a segmental profit of $1.3 million to a segmental loss of $50.1 million, which was due to the loss on disposal of a subsidiary, F2S1 Investment Pte Ltd and fair value loss recognised for the Groupís strata industrial units held at 63 Hillview Avenue, Lam Soon Industrial Building.

Plastics to Fuel (ďPTFĒ) Refining Division
This division engages in converting plastic waste to usable fuel oil, liquid petroleum gas and coke. The segment recorded a profit of $0.4 million in FY2017, compared to a loss of $0.5 million in FY2016. This was due mainly to the gain on disposal of equipments and lower pre-operation PTF expenses.

Outlook

Moving forward, the Group will continue to control operating costs, improve productivity, explore opportunities in property investment and rationalise its operations with the ultimate aim of enhancing value and delivering greater value to all stakeholders. The Group is poised to make further progress in expanding our core business, leveraging on the business momentum established globally and continuing our pursuit of delivering quality and valued solutions to restore the environment.


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