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CONSOLIDATED INCOME STATEMENT
July – September 2016 ("3Q16")
The Group's revenue decreased 2.3% year-on-year ("yoy") from $176.5 million for 3Q15 to $172.5 million for 3Q16. The decrease in revenue came from the Healthcare and Mould Fabrication business segments.
The decrease in revenue from the Healthcare business segment was due to a decrease in orders. The decrease in revenue from the Mould Fabrication business segment was due to lesser orders billed and recognised to profit and loss during the period.
The Group's gross profit decreased by 3.3% yoy from $25.3 million for 3Q15 to $24.4 million for 3Q16. Gross profit margin decreased slightly from 14.3% for 3Q15 to 14.2% for 3Q16.
The decrease in other income was due to a foreign exchange gain of $2.3 million for 3Q16 compared to $11.0 million for 3Q15.
The decrease in administration costs resulted from the integration of FEL group and cost rationalisation.
The decrease in other expenses was mainly due to an impairment allowance on property, plant and equipment of $0.5 million for 3Q15.
The Group achieved a net profit of $10.2 million for 3Q16 compared to $15.9 million for 3Q15. Excluding foreign exchange gains, and the reversal of/allowance for impairment loss on property, plant and equipment, net profit would have been $7.9 million for 3Q16 and $5.3 million for 3Q15, representing a 48.7% yoy increase.
CONSOLIDATED BALANCE SHEET
The Group's property, plant and equipment amounted to $186.9 million as at 30 September 2016, and as at 31 December 2015. Property, plant and equipment were stated net of depreciation charges of $22.4 million (9M15: $24.3 million) and partially offset by the addition of $28.7 million in capital expenditure for machineries, building and currency re-alignment.
The decrease in loans and borrowings was due to the repayment of loans.
The Group maintained a cash balance of $110.4 million as at 30 September 2016 (31 December 2015: $121.1 million), resulting in a net cash position of $4.9 million (31 December 2015: $1.1 million), after accounting for loans and borrowings of $105.5 million (31 December 2015: $120.0 million).
CONSOLIDATED CASHFLOW STATEMENT
July – September 2016 ("3Q16")
Net cash generated from operating activities was $25.1 million for 3Q16, compared to $21.9 million for 3Q15. Net cash used in investing activities was $13.3 million for 3Q16 compared to $6.5 million for 3Q15 due to payments for the purchase of property, plant and equipment.
Net cash used in financing activities was $6.2 million for 3Q16, compared to $4.9 million for 3Q15.
Global growth remains subdued as economic activity continues to decline while rising uncertainty provides additional business headwinds. Amidst this challenging business environment, the Group continues to face pricing pressure from customers along with rising labour costs. In spite of this, the Group remains focused on streamlining operations and enhancing productivity in order to adopt a leaner business model.
Pertaining to business operations, the order backlog in the Automotive segment remains robust. Similarly, the Group's Healthcare segment remains stable and production is expected to ramp up in the fourth quarter following a key customer's shift in production from 3Q16 to end-4Q16.
Conversely, the Group's Consumer/IT segment is expected to remain sluggish due to the competitive landscape and uncertain global economic outlook. The year-on-year decline in the Group's Mould Fabrication segment was the result of an exceptionally strong quarter in the preceding year and difficult market conditions. Overall, the order backlog in the Group's Mould Fabrication segment remains stable, supported by a diverse customer base and wide product mix offering.
As a follow-up to the Group's preceding quarter's announcement, the construction of a manufacturing plant in Chuzhou, China remains on track for completion by end-2016.
Backed by a global manufacturing footprint and strong engineering capabilities, the Group continues to receive enquiries from customers who are confident in the Group's ability to handle projects across different geographic regions. While remaining cautious of business headwinds such as rising labour costs and foreign exchange volatility, the Group's focus on enhancing long-term shareholder value remains on track as it strives to build a sustainable and profitable business model.