Tai Sin Electric Limited

24 Gul Crecent, Jurong Town, Singapore 629531

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


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First Quarter Financial Statement And Related Announcement

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FIRST QUARTER FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2017

Profit And Loss

Financials

Balance Sheets

Financials

Review

Statement of profit or loss

The Group's revenue of $78.34 million for the 3 months ended 30 September 2017, was up 14.13% when compared to $68.64 million from the last corresponding period. The increase in revenue was mainly due to the Cable & Wire ("C&W") Segment which reported an increase of $6.77 million, attributable to higher delivery to the Commercial & Residential and Infrastructure Sectors in Singapore and Vietnam. Electrical Material Distribution("EMD") Segment revenue increased by $3.32 million. This was mainly due to higher sales to the Industrial Building and Electronic Clusters as the segment began to pick up more orders from various projects.

The net increase in revenue was negated by decrease in the Non-Destructive Testing and Heat Treatment revenue from the Test & Inspection (T&I) Segment and lower export sales to Myanmar from the C&W Segment.

Gross profit ("GP") for the first quarter declined 2.03% or $0.29 million to $13.73 million from $14.02 million in the last corresponding quarter. In spite of the Group recording higher revenue, GP declined mainly attributable to lower margins as a result of the surge in copper prices and pricing pressures from stiff competition in the T&I Segment.

Other operating income dropped to $0.32 million from $1.35 million in last corresponding quarter, down $1.03 million. During the corresponding quarter ended September 2016, the Group benefited from the gain on disposal of property of $0.65 million and fair value gain on derivative financial instruments of $0.25 million.

The total administrative, selling and distribution expenses increased by $0.19 million, tied particularly to higher business activities during the quarter and higher staff costs.

Other operating expenses increased by $0.56 million to $0.68 million. As a result of a weaker US Dollar against Singapore Dollar, the Group suffered fair value loss on derivative financial instruments and foreign exchange loss during the period.

The Group's profit before income tax ("PBT") of $3.98 million for the period ended 30 September 2017, was lower by $1.88 million as compared to the last corresponding period. The C&W Segment posted a lower PBT by $1.39 million as a result of lower gross profit margin, the fair value loss on derivative financial instruments and foreign exchange loss. The T&I Segment's PBT decreased by $1.21 million as a result of intense competition and absence of gain on disposal of property. However, PBT from the EMD Segment increased by $0.71 million moving in tandem with higher revenue achieved during the quarter.

Statement of financial position

Cash and bank balances increased by $4.66 million, mainly due to higher receipts from customers towards quarter end.

Trade receivables increased by $3.03 million, mainly the result of higher sales for the quarter ended 30 September 2017 as compared to quarter ended 30 June 2017.

Other receivables increased by $0.21 million, primarily attributable to down payment for purchase of plant and equipment and prepayment of insurance.

Inventories and trade payables increased by $3.84 million and $3.25 million respectively, mainly due to higher purchases in the C&W and EMD Segments during the quarter.

Short-term bank borrowings increased by $5.99 million primarily because of higher borrowings by the C&W Segment which moved in tandem with higher purchases.

Other payables decreased by $2.15 million mainly because of bonus payout for the financial year ended 30 June 2017 during the quarter.

Statement of cash flows

The cash and cash equivalent at the end of the period increased to $26.74 million compared with $22.08 million at the end of the last period.

The net cash used in operating activities of $0.74 million was mostly due to higher sales, higher purchases, bonus and income tax paid during the period.

The net cash used in investing activities of $0.38 million was mainly for purchase of property, plant and equipment, net of proceeds from disposal of plant and equipment and interest received.

The net cash from financing activities of $5.82 million was largely from proceeds from short-term bank borrowings, net of repayment of bank borrowings, finance lease, dividend paid to non-controlling interests and interest paid.

Commentary

The Group expects the business environment to remain challenging amid subdued economic growth particularly in the private sector construction.

The Group's revenue and profitability in the next 12 months will be influenced by intense competition in the infrastructure sector, coupled with volatile foreign exchange and copper prices.

With uncertainties still clouding the expected realisation of construction projects in the near term, the Group will place greater attention on markets in the Southeast Asian region.

Given the global economic conditions, the Group will continue to adopt a prudent and conservative approach to sustain growth.