Tai Sin Electric Limited

24 Gul Crecent, Jurong Town, Singapore 629531

T: (+65) 6672 9292 E: ir@taisin.com.sg


Email This Print ThisChairman's Statement

Extracted from Annual Report 2019

"As we pursued greater efficiency and sustainability, we did not lose sight of the need to deliver. Group revenue for FY2019 grew by 3.44% to $335.71 million on the back of mixed results across our business segments."

Dear Shareholders,

The financial year ended 30 June 2019 ("FY2019") has been particularly challenging with operational challenges arising from global trade disputes and commodity volatility.

As we pursued greater efficiency and sustainability, we did not lose sight of the need to deliver. Group revenue for FY2019 grew by 3.44% to $335.71 million on the back of mixed results across our business segments.

Revenue from the Cable & Wire ("C&W") Segment increased by 4.14% due to a higher number of infrastructure and industrial projects delivered.

The Test & Inspection Segment ("T&I") likewise saw growth, with sales going up by 18.50% or $4.77 million to a total of $30.57 million for the year under review. Its performance could be attributed to a recovery in the Oil & Gas Cluster which translated to more vessel repair and maintenance activities and a steady stream of infrastructure-related work in Singapore and Malaysia.

However, revenue contribution from the Electrical Material Distribution ("EMD") Segment declined, dropping by 2.50% to $80.89 million. Building & Infrastructure and Marine Clusters saw higher sales while the Electronic, General Manufacturing, Chemical and Oil & Gas Clusters declined due to softer demand.

The Switchboard ("SB") Segment also saw a decline in revenue and posted a turnover of $4.88 million for FY2019 which largely stemmed from maintenance and replacement projects.

Although revenue grew for FY2019, gross profit slumped with a 5.92% reduction to $50.52 million due to stiff competition in the Infrastructure Sector which applied pricing pressure. This was compounded by a surge in copper prices that narrowed margins of C&W Infrastructure projects that were secured 2 to 3 years earlier.

We saw an increase in other operating income which rose by $0.47 million to $2.56 million due to higher scrap sales during the year. In addition, a gain on foreign exchange in the current year as compared to a loss recorded in FY2018 also contributed to the increase in other operating income. This was due to fluctuations in US Dollar during the year. With regard to the cost of operations, selling and distribution expenses increased marginally to $19.41 million by 1.01% for FY2019 mainly due to higher delivery costs from the C&W Segment offset by lower staff costs from the EMD Segment.

Administrative expenses were lower for FY2019 by 5.20% or $1.02 million to a total of $18.55 million mainly due to the higher donation made to an approved Institution of Public Character (IPC) in the last financial year.

The Group's other operating expenses were lower by $0.12 million in comparison to the $1.89 million recorded in FY2018 as there was an absence of a foreign exchange loss incurred during the last corresponding year offset against higher loss allowance for trade receivables during the year.

Our finance costs saw an increase of $0.45 million to $1.01 million due to higher utilisation of short-term bank borrowings for higher purchases, working capital needs and acquisition of property during the year.

Taking into account the abovementioned results, the Group's profit attributable to shareholders declined by 23.98% to $11.75 million as compared to the $15.46 million in FY2018.

On a separate note, the Group reported an acquisition of property for the year under review. The cable and wire factory at 24 Gul Crescent had begun to face space constraints and to resolve the issue and allow for greater productivity and production capacity, we purchased the adjacent property at 9 Gul Lane. The purchase will add a single-storey JTC detached factory with a gross floor area of approximately 3,700 square meters for our use.

IN APPRECIATION

On behalf of the Board of Directors, I would like to thank our customers and business partners for another year of support. We look forward to strengthening our collaborative efforts. Much appreciation is also reserved for our staff at all levels for their dedication and enthusiasm in joining us on our journey. Lastly, we would like to once again thank you, the shareholder for the ongoing faith in us.

To further express our appreciation, the Board has declared a final dividend of 1.5 cent per ordinary share subject to approval at the annual general meeting.

While the coming financial year is expected to yield both opportunities and challenges, we anticipate making steady progress in our pursuit of building sustainable value for our stakeholders.


Bobby Lim Chye Huat
Chairman