Third Quarter Financial Statement And Dividend Announcement 2016
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Unaudited Third Quarter Financial Statements and Dividend Announcement for the Period Ended 30 September 2016
Consolidated Statement of Comprehensive Income
Review of Performance
Review of Income Statement
The breakdown of revenue by business segments is shown in the table below.
The Group returned total revenue of S$102.0 million for Q3 2016 which was 2.7% lower than prior year same period. For the quarter :
- Wholesale & distribution division revenue was almost flat against last year. Singapore
achieved higher sales from agency brands offset by lower sales in Malaysia which was hit by
the lower sale in July month due to the timing difference of the Ramadan festive period
between FY2016 and FY2015;
- Manufacturing division continued its growth momentum in Q3 2016 from its range of core
products under the bread and cream roll categories and also benefiting from the sale of new
products launches during the year;
- Excluding the impact of the closure of non-performing stores in Singapore, Malaysia and
Hong Kong last year, overall revenue for Edmontor Group closed lower than last year as
Singapore was impacted by closure of two stores whose lease has expired while Hong Kong
consumers’ sentiment remains negative amidst a weak economic backdrop and reduction in
tourists from Mainland China; and
- Food Junction Group registered lower sales across the outlets due to soft retail environment
and the closure of one of the outlets as the landlord carries out redevelopment works.
Profit before taxation
The Group reported profit before taxation of S$5.2 million in Q3 2016 as compared to a loss before taxation of S$21.6 million in the same period last year. The loss last year included S$23.3 million of impairment from the Edmontor Group. Improvement in Q3 2016 performance was attributed to :
- Wholesale and distribution division operating profit surpassed prior year by S$0.4 million driven
mainly by Singapore which achieved higher sale and lower operating expenses while Malaysia
reported lower profitability affected by the timing difference in the Ramadan festive period
between the two financial years;
- Manufacturing division operating profit for Q3 2016 closed S$0.6 million higher, in line with the
higher revenue achieved;
- Edmontor Group registered operating profit of S$1.1 million as opposed to an operating loss of
S$0.6 million in Q3 2015 arising from the continuing improvement made by Singapore and Hong
Kong from rationalisation of product mix, better cost control including driving operations
- Food Junction Group delivered higher operating profit in Q3 2016 over the corresponding
quarter in 2015 by S$0.2 million brought about by improved performance of food courts in
Singapore and the closure of under-performing restaurants last year.
Review of Financial Position
As at 30 September 2016, the Group’s total equity stood at S$168.7 million. This was S$7.9 million higher than the position as at 31 December 2015. The increase was contributed largely from the profit posted for the period up to September 2016. There are no other significant changes to the Statement of Financial Position except for the following:
- lower property, plant and equipment due primarily to depreciation, disposal, allowance for
impairment and write-off of assets, offset by the purchase of new assets;
- lower stocks attributed to inventory drawn down, post the festive Ramadan period;
- lower trade debtors attributed to improved collection from key customers;
- lower trade creditors due mainly to due settlement of suppliers’ invoices; and
- higher other creditors and accruals due mainly to accrual for advertising and promotion and
higher provision for operating expenses
Cash Flow Review
The Group cash and cash equivalents increased by S$34.4 million from S$44.5 million as at 31 December 2015 to S$78.9 million as at 30 September 2016. The net cash increase was largely generated from operating activities offset by capital expenditure and repayment of bank borrowings.
Commentary on Current Year Prospects
The global and regional economies remained weak and uncertain. While the Group has shown positive performance so far, it is cautiously optimistic that the momentum built up for the past three quarters should continue to yield result as it enters into the last quarter of FY2016.