Financial Statements And Related Announcement - Third Quarter Results

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Unaudited Third Quarter 2018 Financial Statements

Profit & Loss

Consolidated Statement Of Comprehensive Income

Balance Sheet

Review of Performance

Q3FY18

Revenue

The Group's sales revenue was 3.6% higher at S$61.9 million in Q3FY18 compared to S$59.7 million in Q3FY17. This was mainly attributable to new sales in North Asia.

Gross Profit and Gross Profit Margin

Gross profit was S$14.0 million in Q3FY18 compared to S$15.4 million in Q3FY17. Gross profit margin decreased from 25.8% in Q3FY17 to 22.6% in Q3FY18. This was mainly due to higher cost of sales in tyres and higher cost of wheel production.

Operating Expenses

Total operating expenses remained flat at S$14.2mil in Q3FY18 compared to S$14.1mil in Q3FY17. Higher marketing costs were offset by lower staff costs and foreign exchange costs.

Share of Results of Joint Ventures

In Q3FY18, our share of profits from joint ventures amounted to a net of S$0.8 million, compared to S$0.9 million Q3FY17, mainly due to lower sales by our India joint ventures.

Net Profit

The net profit of the Group decreased to S$0.95 million in Q3FY18, compared to S$2.3 million recorded in Q3FY17.

Financial Position

Property, plant and equipment decreased to S$70.1 million as at 31 January 2018 from S$70.7 million as at 30 April 2017.

Receivables decreased to S$61.0 million as at 31 January 2018 from S$67.5 million as at 30 April 2017.

Inventories increased to S$86.9 million as at 31 January 2018 from S$77.9 million as at 30 April 2017.

Trade payables and trust receipts decreased to S$64.7 million as at 31 January 2018 from S$71.3 million as at 30 April 2017.

As at 31 January 2018, the Group's cash and cash equivalents stood at S$19.0 million compared to S$21.7 million as at 30 April 2017.

The Group's borrowings which comprise trust receipts, revolving credit, short-term secured loans as well as long-term secured loans stood at S$89.7 million as at 31 January 2018 compared with S$96.2 million as at 30 April 2017. The decrease in borrowings was mainly due to the repayment of trust receipts.

9MFY18

Revenue

The Group's sales revenue was 2.5% higher at S$179.9 million in 9MFY18 compared to S$175.5 million in 9MFY17. This was mainly due to new sales in North Asia.

Gross Profit and Gross Profit Margin

Gross profit was flat at S$45.1 million in 9MFY18 compared to S$45.2 million in 9MFY17. Gross profit margin decreased slightly from 25.7% in 9MFY17 to 25.1% in 9MFY18. This was mainly due to higher cost of sales in tyres and higher cost of wheel production.

Operating Expenses

Total operating expenses increased by 4.6% to S$43.5 million in 9MFY18 compared to S$41.6 million in 9MFY17. The increase was mainly due to higher foreign exchange costs, staff costs, marketing and distribution costs and maintenance costs.

Share of Results of Joint Ventures

In 9MFY18, the share of results of joint ventures amounted to a net profit of S$2.2 million, compared to S$1.9 million in 9MFY17, mainly attributable to improved performance from our Hong Kong joint venture.

Net Profit

The net profit of the Group was S$4.5 million in 9MFY18, compared to S$5.3 million recorded in 9MFY17.

Commentary

The operating environment in the tyre business remains challenging as a result of global oversupply and intense competition.

To mitigate the impact of this challenging environment, the Group will continue to optimize its product mix, manage operating costs and build on its core markets in South East Asia.