REVIEW OF THE FINANCIAL HIGHLIGHTS
Extracted from Annual Report 2012
REVIEW OF FINANCIAL PERFORMANCE
The comparative figures as at 31 December 2011 were restated due to the completion of purchase price allocation exercise in accordance with FRS 103 (R) Business Combinations following the acquisition of AS Sunningdale Tech (Latvia) (formerly known as Akciju Sabiedriba ATEC) ("ST Lavia") and ATEC of Sweden AB ("AOS") in August 2011.
The Group recorded revenue of $451.3 million for FY2012, a 5.9% increase from $426.1 million in FY2011. The increase came from the Consumer/IT and Healthcare business segments, partially offset by a decline in the Automotive business segment. The revenue contribution from Mould Fabrication was flat with the last financial year.
The Group's gross profit for FY2012 was lower by 9.7%, from $57.2 million in FY2011 to $51.6 million. The gross margin was 11.4% as compared to 13.4% a year ago. The reduction in gross margin was due to lower utilization, changes in product mix and increase in staff costs.
Other expenses (excluding impairment loss on goodwill) decreased from $6.5 million in FY2011 to $4.7 million in FY2012, mainly due to lower foreign exchange loss of $1.7 million (FY2011: $4.4 million), partially offset by an increase in amortisation of intangible assets of $1.1 million (FY2011: $0.4 million) and an increase in property, plant and equipment written off of $0.4 million (FY2011: $0.1 million).
The Group achieved a net profit of $9.6 million compared to a net loss of $11.8 million in FY2011. This was due to the impairment loss on goodwill of $23.7 million incurred in FY2011. Excluding this item, the Group recorded a net profit of $11.9 million in FY2011.
The earning per share was 1.27 cents for FY2012 compared to a loss per share of 1.58 cents for FY2011.
Net asset value per share decreased from 31.60 cents as at 31 December 2011 to 30.80 cents as at 31 December 2012. Net tangible asset per share also decreased from 29.57 cents as at 31 December 2011 to 28.93 cents as at 31 December 2012. The decrease is mainly due to a stronger Singapore dollar against the Malaysia ringgit and Hong Kong dollar resulting in a foreign exchange translation loss on consolidation.
FINANCIAL POSITION AND CASHFLOWS
Property, plant and equipment decreased from $165.0 million last year to $147.6 million as at 31 December 2012. This is after a depreciation charge of $26.5 million (FY2011: $24.3 million). During the year, the Group incurred $14.7 million in capital expenditure for machineries and the setup of a new plant in Latvia.
The decrease in investment properties was due to a reclassification to property, plant and equipment as the Group has relocated the office from rented premises to its owned property in Hong Kong.
The decrease in intangible assets was due to amortisation of intangible assets.
The increase in receivables and payables was in line with the increase in orders during the year.
The decrease in tax payable was due to payments made.
Loans and borrowings (excluding bank overdraft) increased to $58.6 million as at 31 December 2012 from $56.9 million as at 31 December 2011 due to the payment for property, plant and equipment and the restructuring of bank overdraft to a short term loan. This was partially offset by the repayment of some loans.
The Group maintained a cash balance of $52.7 million as at 31 December 2012 (31 December 2011: $49.2 million) resulting in net debt of $5.9 million (31 December 2011: $9.6 million).
Net cash generated from operating activities was $26.1 million for FY2012, compared to $17.6 million for FY2011. Net cash used in investing activities was $16.5 million for FY2012 as compared to $37.1 million in FY2011 due to the acquisition of companies in FY2011. Net cash used in financing activities for FY2012 was $1.9 million compared to $10.2 million in FY2011 mainly due to the repayment of some loans.
BUSINESS SEGMENTS PERFORMANCE
Revenue from the Automotive business segment decreased by 2.1% from $102.7 million in FY2011 to $100.6 million in FY2012. The segment's contribution to Group revenue decreased from 24.1% to 22.3%. This was due to lower orders especially from customers in Europe.
Consumer/IT business segments, the key revenue generator, increased by 12.9% from $184.4 million in FY2011 to $208.1 million in FY2012, despite the impact from a major customer's change in their supply chain strategy. The contribution came mainly from the companies acquired in FY2011, new projects from existing and new customers. It accounted for 46.1% of the Group revenue in FY2012 as compared to 43.3% in FY2011.
Revenue from the Healthcare business segment increased, by 16.8%, from $25.9 million in FY2011 to $30.2 million in FY2012. This was due to the contribution from the new plant in Latvia, which started mass production toward the end of 3Q12, and increase in orders from existing customers. The segment revenue contribution increased from 6.1% in FY2011 to 6.7% in FY2012.
Revenue from the Mould Fabrication business segment declined marginally, by 0.6%, from $113.1 million in FY2011 to $112.4 million in FY2012. This segment accounted for 24.9% of the Group's revenue in FY2012, a drop from 26.5% in FY2011.
GEOGRAPHIC SEGMENTS PERFORMANCE
The Group currently has manufacturing facilities in ten locations, Singapore, Malaysia, China, Mexico, Latvia and Sweden.
Operations in China and Hong Kong which contributed the bulk of Group revenue in past years decreased from 42.6% in FY2011 to 38.9% in FY2012. This was due to the change of supply chain strategy of a key customer.
The contribution from Singapore and Malaysia operations decreased from 48.2% in FY2011 to 45.2% in FY2012. This was mainly due to end of life for certain projects and lower orders from the Automotive business segment. This was partially offset by new projects from existing and new customers.
Revenue contribution from the Group's operations in other regions increased significantly from 9.2% in FY2011 to 15.9% in FY2012. This was mainly due to 12 months of contribution from the companies acquired in Europe in FY2011 as compared to 4 months contribution in prior year.