HG Metal Manufacturing Ltd

Financials

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First Quarter Financial Statements and Dividend Announcement for Financial Period Ended 31 March 2017

Financials Archive

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Statement of Comprehensive Income

Financials

Balance Sheet

Financials

Review of Performance

  • Review of Performance

    Results for 1Q2017 versus 1Q2016

    Revenue and Gross Profit

    The Group achieved revenue of S$45.6 million in 1Q2017 as compared to S$21.9 million in 1Q2016, contributed by 43% increase in sales volume and 46% increase in average selling price in the 1Q2017

    Despite the lower gross profit margin registered in 1Q2017 compared to 1Q2016, the Group's gross profit increased from S$1.7 million in 1Q2016 to S$2.5 million in 1Q2017 due to increased revenue.

    Other Operating Income

    Other operating income declined from S$2.8 million in 1Q2016 to S$2.5 million in 1Q2017. This was mainly due to lower warehousing and rental income, reduced gain from disposal of fixed assets and less miscellaneous income of S$0.4 million. These reductions were partially offset by the increase in fair value gain on forward currency contracts from S$0.3 million in 1Q2016 to $0.4 million in 1Q2017.

    Distribution, Administrative, Other Operating and Finance Expenses

    The Group's distribution expenses increased in line with the higher revenue achieved in 1Q2017.

    There was no significant increase in administrative expenses and other operating expenses compared to previous corresponding quarter. Included in other operating expenses was foreign exchange loss of about S$1.0 million in 1Q2017 and 1Q2016 respectively mainly due to the revaluation of net foreign currency monetary assets and liabilities arising from the weakening of the US Dollar against the Singapore Dollar.

    Finance expenses decreased significantly in 1Q2017 as compared to 1Q2016 as a result of repayment of bank borrowings.

    Profitability

    The Group recorded a net loss after tax of S$0.3 million in 1Q2017, compared to a net loss after tax of S$1.1 million in 1Q2016.

  • Balance Sheet

    Trade and other receivables increased in line with higher revenue to S$43.3 million as at 31 March 2017 as compared to S$34.8 million as at 31 December 2016.

    Trade and other payables increased to S$15.2 million as at 31 March 2017 compared to S$14.0 million as at 31 December 2016.

    Total bank borrowings decreased from S$2.0 million as at 31 December 2016 to S$1.1 million as at 31 March 2017 due to repayment of bank borrowings made during 1Q2017.

  • Statement of Cash Flows

    The net cash flows used in operating activities was S$7.8 million in 1Q2017 compared to net cash flows generated from operating activities of S$8.4 million in 1Q2016. This was mainly attributable to the increase in trade and other receivables of S$9.1 million, increase in inventories of S$0.2 million and partially offset by increase in trade and payables of S$1.2 million.

    Net cash flows generated from investing activities for 1Q2017 was S$0.9 million, mainly derived from dividend received from associate of S$1.0 million.

    Net cash flows used in financing activities for 1Q2017 was S$0.9 million, mainly due to repayment of bank borrowings of S$2.0 million and partially offset by proceeds of new bank borrowings of S$1.1 million.

    The Group's cash and cash equivalents was S$23.0 million as at 31 March 2017 in comparison to S$59.0 million as at 31 March 2016.

  • Commentary

    The Group expects the operating environment for the steel industry to remain challenging. The volatile steel prices, competitive environment, the fluctuations in USD dollar, as well as increasing geopolitical uncertainty that will affect the global and Singapore economy continue to pose challenges to the industry.

    The Group is therefore moving forward cautiously through further streamlining of its operations and cost control, prudent expansion of sales channels and optimising its inventory holdings.

    The Group will continue to seek business opportunities, locally and overseas.