Announcements & News Releases

Third Quarter Financial Statement

Nov 26, 2003

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

  •  
  • 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year
 
2003
2002
Increase/
2003
2002
Increase/
 
Jan-Sep
Jan-Sep
(Decrease)
Jul-Sep
Jul-Sep
(Decrease)
 
($'000)
($'000)
%
($'000)
($'000)
%
Turnover
53,334
29,873
79%
15,968
11,098
44%
Other operating income
318
(156)
304%
309
(17)
1918%
Raw and consumable materials
(24,291)
(14,461)
68%
(7,255)
(5,368)
35%
Personnel expenses
(4,170)
(4,778)
-13%
(1,124)
(2,099)
44%
Depreciation & amortisation
(1,768)
(1,222)
45%
(537)
(358)
50%
Other operating expenses
(10,502)
(3,135)
235%
(4,224)
(1,386)
205%
Profit from operations
12,921
6,121
111%
3,137
1,870
68%
Finance expenses (net)
-(136)
(260)
(48%)
122
(89)
237%
Profit before share of results of Associated Company
12,785
5,861
118%
3,259
1,781
83%
Share of associated company
(56)
(27)
107%
(25)
NA
Profit before Income tax and MI
12,729
5,834
118%
3,234
1,781
82%
Income tax
(571)
(761)
(25%)
0
(447)
(100%)
Profit after tax and before MI
12,158
5,073
(140%)
3,234
1,334
142%
MI
106
191
(45%)
20
65
(69%)
Profit after tax attributable to shareholders
12,264
5,264
133%
3,254
1,399
133%
  •  


      Nm means not meaningful.

      Note 1 - Other operating costs in 3rd quarter 2003 and the 9 months period ended 30 Sep 03 included subcontract costs for projects of S$2.8 million and S$6.5 million respectively.


  • 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year
  Group Group Company Company
$'000
30-Sep-03
31-Dec-02
30-Sep-03
31-Dec-02
CURRENT ASSETS        
Cash and bank balances
2,414
3,770
486
132
Fixed deposits
30,655
13,338
9,802
9,283
Stocks
10,099
5,402
851
619
Trade debtors
9,175
12,813
27
2,613
Work-in-progress
19,974
16,195
0
0
Other debtors, deposits & prepayments
2,700
2,379
204
1,006
Due from subsidiaries (non-trade)
0
0
46,726
26,400
Due from subsidiaries (trade)
0
0
6,791
4,757
Total current assets
75,017
53,897
64,887
44,810
CURRENT LIABILITIES        
Trade creditors and accruals
16,200
5,374
577
469
Other creditors and accruals
1,718
1,932
58
437
Provision for income tax
135
387
(430)
0
Provision for warranty
50
50
0
0
Provision for directors' fees
150
0
146
0
Hire purchase creditors, current
38
47
0
0
Finance lease creditors, current
14
14
0
0
Short term loans
2,330
1,686
0
0
Long term loans, current
1,538
1,623
1,538
1,154
Total current liabilities
22,175
11,113
1,890
2,060
Net current assets
52,842
42,784
62,997
42,750
NON-CURRENT ASSETS        
Fixed assets
14,913
13,021
899
1,103
Subsidiaries
0
0
8,239
8,039
Associated company
184
255
0
0
Long-term investment
3,432
1,735
0
0
Intangibles
11,289
3,506
111
0
Total non-current assets
29,818
18,517
9,249
9,142
NON-CURRENT LIABILITIES        
Hire purchase creditors, non-current
0
73
0
0
Finance lease creditors, non-current
54
63
0
0
Deferred tax liabilities
271
489
0
0
Long term loan, non-current
3,932
4,267
3,462
3,846
Total non-current liabilities
4,257
4,892
3,462
3,846
Total net assets
78,403
56,409
68,784
48,046
SHARE CAPITAL AND RESERVES        
Share capital
12,437
11,809
12,437
11,809
Share premium
34,071
22,378
34,071
22,378
Translation reserve
(1,054)
(647)
0
0
Revenue reserve
31,567
20,375
22,276
13,859
Share capital and reserves before minority interest
77,021
53,915
68,784
48,046
Minority interests
1,383
2,494
0
0
Total capital and reserves
78,403
56,409
68,784
48,046




  •  


      Amount repayable in one year or less, or on demand

      As at 30/09/2003
      As at 31/12/2002
      Secured
      Unsecured
      Secured
      Unsecured
             
      52
      3,869
      61
      3,309


      Amount repayable after one year

      As at 30/09/2003
      As at 31/12/2002
      Secured
      Unsecured
      Secured
      Unsecured
             
      54
      3,933
      136
      4,267


      Details of any collateral
  • 1(b)(ii) Aggregate amount of group's borrowings and debt securities

Underlying assets in the hire purchase and finance leases.

  •  

  • 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year
('$000)
2003
2002
 
Jul-Sep
Jul-Sep
Cash Flows from operating activities    
Profit before tax
3,234
1,781
Adjustments:    
Share of results of associated company
25
0
Amortisation of goodwill and intangible assets
120
43
Bad debts written off
0
0
Depreciation of fixed assets
417
315
Interest expense
(52)
90
Interest income
(70)
0
Operating profit before working capital changes
3,726
2,229
Stocks
(2,482)
(456)
Trade debtors
(3,877)
6,436
Work-in-progress
13,185
1,844
Other debtors, deposits and prepayments
1,673
(24)
Trade creditors
(2,801)
(868)
Other creditors and accruals
(420)
692
Cash generated from (used in) operations
9,005
6,854
Interest paid
52
(90)
Income tax paid
39
(1,333)
Net cash generated from (used in) operating activities
9,096
8,432
Cash flows from investing activities    
Other investment    
Development Costs(R&D)
(6,187)
(152)
Purchase of fixed assets
(517)
(1,072)
Construction in progress
0
0
Long term receivable
(440)
233
Interest received
70
0
Net cash used in investing activities
(7,075)
(991)
Cash flows from financing activities    
Proceeds from issue of new shares
287
-
Changes in minority interests of a subsidiary
(355)
(126)
Changes in associate's interest
15
(2)
Dividend payment
0
(1,835)
Proceeds / (payments) of term loan, net
(436)
542
Payment of hire purchase creditors
(6)
(13)
Change in finance lease creditors
(57)
64
Net cash from financing activities
(553)
(1,370)
Net increase in cash and cash equivalents
1,468
6,070
Cash and cash equivalents at beginning of the period
32,101
15,365
Effect of exchange rate changes
(499)
(91)
Cash and cash equivalents at end of the period
33,070
21,345

 

  •  

  • 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year





$'000
Share Capital
Share Premium
Translation Reserve
Revenue Reserve
Total
Group          
Balance at 1 January 2002
8,909
12,653
(144)
9,948
31,366
Issue of shares for cash
500
11,850
   
12,350
Issue of bonus shares
2,352
(2,352)
   
0
Expenses on shares issuance  
(200)
   
(200)
Foreign currency translation differences    
(447)
 
(447)
Net profit for the year      
5,265
5,265
Dividends      
(1,835)
(1,835)
Balance at 30 September 2002
11,761
21,951
(591)
13,378
46,499
           
Company          
Balance at 1 January 2002
8,909
12,653
0
324
21,886
Issue of shares for cash
500
11,850
   
12,350
Issue of bonus shares
2,352
(2,352)
   
0
Expenses on shares issuance  
(200)
   
(200)
Net profit for the year      
3,465
3,465
Dividends      
(1,835)
(1,835)
Balance at 30 September 2002
11,761
21,951
0
1,954
35,666
           
Group          
Balance at 1 January 2003
11,809
22,378
(647)
20,272
53,812
Issue of shares for cash
628
11,701
   
12,329
Issue of bonus shares          
Expenses on shares issuance  
(8)
   
(8)
Foreign currency translation differences    
(407)
 
(407)
Net profit for the year      
12,264
12,264
Dividends      
(969)
(969)
Balance at 30 September 2003
12,437
34,071
(1,054)
31,567
77,021
           
Company          
Balance at 1 January 2003
11,809
22,378
0
13,859
48,046
Issue of shares for cash
628
11,701
   
12,329
Issue of bonus shares          
Expenses on shares issuance  
(8)
   
(8)
Net profit for the year      
9,386
9,386
Dividends      
(969)
(969)
Balance at 30 September 2003
12,437
34,071
0
22,276
68,784
           
  •  

      1. A private placement of 11,811,000 new ordinary shares of $0.05 each at a price of $1.00 per share was announced on 30 December 2002. The new shares were listed on 9 January 2003.

      2. 728,000 new ordinary shares of $0.05 each were issued pursuant to options exercised under the Hyflux Employee Shares Option Scheme ("Scheme").

      3. As at 30 September 2003, the outstanding and unexercised Options granted under the Scheme were 11,515,280 shares (30 September 2002, 9,511,000 shares).






      The figures have not been audited or reviewed.


      Not applicable


      The same accounting policies and methods of computation are being followed as in the audited financial statements for year ended 31 December 2002

  • 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) 3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter) 4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

Not applicable.

  •  

  • 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends
 
Jan – Sep 2003
Jan – Sep 2002
Jul – Sep 2003
Jul – Sep 2002
Earnings per ordinary share after deducting any provision for preference dividends were:        
Based on the weighted average number of ordinary shares in issue; and
4.9 cents
2.3 cents
1.3 cents
0.6 cents
On a fully diluted basis
4.8 cents
2.2 cents
1.2 cents
0.6 cents
  •  

  • 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year
     
    30 Sep 2003
    31 Dec 2002
    Net asset value per ordinary share of:    
    Group
    31.0 cents
    22.8 cents
    Company
    27.7 cents
    20.3 cents
  •  

      Income Statement

      Sales for 3Q03 rose by 44% over the same period last year to S$16 million primarily due to larger municipal contracts in Singapore. Correspondingly, raw and consumable materials increased by 35% to S$7.3 million, giving a gross margin of 55% in this quarter as compared to 52% in 3Q02. Other operating expenses increased by 205% to S$4.2 million largely due to subcontract costs for civil and other works for the Chestnut waterworks and Seletar Newater projects. The lower personnel expenses compared to the same quarter last year of 46% are a result of improved deployment of resources in the execution of projects and in the development of the seawater desalination plant. At the bottom line, net profit surged by 133% to S$3.3 million compared to S$1.4 million in third quarter last year.

      For the 9 months ended 30 September 2003, sales rose by 79% to S$53.3 million compared to the corresponding period in 2002, mainly due to larger value contracts in both the municipal and industrial sectors. Municipal sales made up 60% of total sales compared to 50% a year ago. Industrial sales has increased by 47% from S$ 15 million to S$ 22 million. Gross margin for the 9 months ended 30 September 2003 has improved marginally by 2% to 54%, which is partially offset by a significant increase in other operating expenses of 235% to S$ 10.5 million due to subcontract costs for civil and other works for the Chestnut waterworks and Seletar projects. Net profit for the 9 months period totaled S$12.3 million, a rise of 133% over the same period last year, yielding a net margin of 23% versus 18% last year.

      Balance Sheet

      Improved operating performance and a private share placement helped to strengthened the equity to S$78.4 million for the period ended 30 September 2003 compared to the beginning balance of S$ 56.4 million.

      The working capital of the group was up by 24% to S$52.8 million mainly due to cash and deposit rising by S$16 million to S$ 33 million. Higher inventory level of $10.1 million in line with growing business.

      Total fixed and non current assets increased by 61% to S$29.8 million due to the expenditure on research and development projects, development expenditure on the seawater desalination plant, licensing fee for the Aquosus patents and the investment in Sinolac (S) Pte Ltd.

      Earnings per share is up from 2.3 cents to 4.9 cents, an increase of 113% over the same period last year.
  • 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

Debt equity ratio of the group is 0.12.

  •  

      The target revenue of S$ 90 million was on the basis of the group's ability to recognize a portion of the sub-contract work (forecast to be about S$ 10 million) that the group will undertake as subcontractor for the desalination project. Following the change in ownership in Singspring, where Hyflux Ltd is now the sole shareholder, the costs and revenues of such sub-contract work will be eliminated on the consolidation of the group's accounts in accordance with the International Accounting Standards.
  • 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results
  •  

      Looking ahead, we foresee demand in both our core markets of Singapore and China to remain strong. The Singapore Market is expected to present a healthy pipeline of projects especially in the municipal sector while our focus in China will be on the robust manufacturing industry, particularly the pharmaceutical and the biotechnology sectors. Elsewhere in the region, we are developing projects in water treatment and in the process industries in collaboration with local partners. In our consumer product business, orders received thus far are 20,000 units, We are working with our subcontract manufacturers to increase output to meet demand


      (a) Current Financial Period Reported On

      Any dividend recommended for the current financial period reported on? None
      (b) Corresponding Period of the Immediately Preceding Financial Year

      Any dividend declared for the corresponding period of the immediately preceding financial year? None

      (c) Date payable
  • 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months 11. Dividend

Not applicable

  •  


      (d) Books closure date

      Not applicable
      [Give a negative statement if not applicable]


  • 12. If no dividend has been declared/recommended, a statement to that effect

Not applicable





  •  


PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

  •  

  • 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year

Not applicable for Q3 results

  •  

  • 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments

Not applicable for Q3 results

  •  

  • 15. A breakdown of sales

Not applicable for Q3 results

  •  


      Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)

       
      Latest Full Year ()
      Previous Full Year ()
      Ordinary
      Preference
      0
      0
      Total:

  • 16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year
  •  

BY ORDER OF THE BOARD

Lim Kim Seng
Company Secretary
26/11/2003