MESSAGE TO
SHAREHOLDERS
DEAR SHAREHOLDERS,
YEAR OF CHANGE AND CONSOLIDATION
FY2014 was a year of change and consolidation
for the Group. There is a change in the Board
of Directors and Management. The Group has
implemented a business rationalisation exercise
to streamline its operations and to optimise cost,
in view of the slowdown in the industry and the
sharp falling of steel prices. To strengthen the
balance sheet, there was a share placement
during the year, with proceeds of S$14.7 million.
FINANCIAL PERFORMANCE
Revenue in FY2014 declined by 29% to S$187.9
million, mainly due to lower sales volume
and falling steel prices. Hence, there was a
30% decline in gross profit to S$11.3 million.
Overall, gross profit margin remained stable at
approximately 6.0%.
A net loss after tax of S$16.8 million was
incurred in FY2014, mainly due to lower sales,
reduced share of associate profits and our
business rationalisation exercise with provision
for inventory, provision for doubtful debts and
impairment of fixed assets amounting to S$15.4
million.
As at 31 December 2014, our cash and cash
equivalents have improved significantly to S$52.7
million from S$16.1 million as at 31 December
2013. This was mainly attributable to the cost
rationalization on inventory and the proceeds
from the share placement. Inventory was
significantly reduced to S$28.1 million as at the
end of FY2014 from S$96.7 million as at the end
of FY2013, so as to bring down carrying costs
cum exposure and to convert inventory into cash.
TRANSFORMATION
Now, the Group will change its business strategy
from a general steel stockist to a one-stop steel
solutions provider, assisting customers to source
for specified steel products at competitive prices.
HG Metal will further capitalize on its good
reputation for its ability to offer cost-effective
steel solutions to diversified industries, such as
energy, marine, transportation and electronics.
We will continue to improve on our working capital
management, including further bringing down
our inventory level and accounts receivable.
APPRECIATION
On behalf of the Board of Directors, we would
like to take this opportunity to thank all our
shareholders, business partners and staff for
their continual support. The Group will spare
no effort to seek new growth avenues and to
enhance our shareholders’ value.
MR CHING CHIAT KWONG
Chairman
MR FOO SEY LIANG
Executive Director
04
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
