Financials

Unaudited Half Year Financial Statement and Dividend Announcement for the Six Month Ended 30 June 2009

Financials Archive | Financial Statement (571 KB) | Press Release (66 KB)

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Profit and Loss

Statement of Comprehensive Income

Review Of Performance

Revenue

The Group's revenue decreased significantly by 35% to $33.3 million in 1H FY2009 as compared to $51.1 million 1H FY2008.

There was a 43% decrease in revenue of Engineered Environmental Systems ("EE Systems") from $43.5 million to $24.8 million. There was a very significant drop in construction activities in the municipal sector, from $28.2 million or 55.3% in 1H FY2008 compared to only $9.8 million representing 29.5% of the total group revenue in 1H FY2009. This is due mainly to few projects being offered for public tenders in Taiwan as a result of change of government last 12 months. Most of these infrastructures are currently being re-modeled as BOT projects.

The Water Management Service ("WM Services") segment generated $8.3 million in revenue; this represents an increase of $1.4 million or 20%, compared to $6.9 million in 1H FY2008. This increase was chiefly derived from waste management projects In Taiwan and BOT drinking water project in China.

Trading activities (Chemical, spare parts and others) decreased by $0.4 million representing a 60% drop as compared to $0.7 million 1H FY2008. This reflects the impact of financial crisis on our customers.

Profitability

The Group's gross profit margin increased marginally by 0.4% to 20.5% in 1H FY2009 from 20.1% in 1H FY2008.

The Group's financial expense decreased by $0.2 million to $0.8 million in 1H FY2009 as compared to $1 million in 1H FY2008, this was due to the lower exchange rate against United State Dollars as compared to 1H FY2008.

Administrative expenses increased by $0.3 million from S$4.6 million to $4.9 million as compared to 1H FY2008. This was mainly due to increase in depreciation expense recorded in connection to the acquisition of leasehold buildingl factory for waste management project in Taiwan.

Statement of Financial Positlon

Intangible assets increased by $5.2 million to $32.1 million as at 30 June 2009 as compared to those in FY2008. This increase was chiefly attributable to the construction of Qian Yuan water treatment plant in Deqing County, China.

The Inventory decreased by $0.4 million to $2 million as at 30 June 2009 as compared to $2.4 million in FY2008. This reflects effort to minimize stock holding level to reduce working capltal requirement.

Trade receivables decreased from $28.5 mlllion in FY2008 to $20.1 million as at 30 June 2009, this was mainly attributable to cash collections from Chu-Bei and Ker-Ya projects in Taiwan during the period.

Trade payables and accrued liabilities decreased by $4.7 million to $14.3 million as at 30 June 2009 as compared to $19 million in FY2008. This was mainly due to repayments made to suppliers during the period.

Short-term borrowings increased by $1.4 million to $23.2 million as at 30 June 2009 as compared to $21.8 million in FY2008. This was due to drawndown of syndicated loan facilities of US$24 million which were secured in FY2008.

Cash Flow Statement

Thre was a net cash inflow of $0.8 million to fund operating and investing activities as a result of the increase in group's business activities in 1H FY2009. Financing activities generated a positive cashflow of $1.8 million in 1H FY2009 mainly from the drawndown of revolving facilities of US$24 million which were securd in FY2008.

Commentary

The Group expects a reduction in revenue contribution from the municipal sector in Talwan in the next twelve months due to lower existing order book from the municipal sector. Although the Group have many contracts under review or negotiation at thh polnt to time. we are unable to predict with any certainly whetherour customers may decide to proceed with their plans, given the uncertain global economic condition.

The construction of Qian Yuan water treatment plant in Deqing County, China is to be speeded up as a result of full funding now made available, this will contribute to the Group's revenue in FY2010. The Water Management sector too, is likely to continue to remain positive in the next 12 months.

Balance Sheet