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Financials Results
Condensed Interim Financial Statements For The Six Months And Full Year Ended 31 March 2023
Financials Archive
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Condensed Interim Consolidated Statement Of Profit Or Loss And Other Comprehensive Income
Condensed Interim Statements Of Financial Position
Review of the Group's Performance
Review of condensed interim consolidated statement of profit or loss and other comprehensive income
Revenue (S$'000)
FY2023 vs FY2022
For 12 months ended 31 March 2023 ("FY2023"), the Group's revenue was S$99.4 million, representing as constant sales compared to S$99.3 million for the corresponding period ended 31 March 2022 ("FY2022"). The revenues segmented by business shows the Energy business contributed revenue of S$53.4 million decreasing 2.2% compared to FY2022. The Marine business contributed revenue of S$46.0 million which was 2.8% increase compared to FY2022. In FY2023, the Energy and Marine business segments contributed 53.7% and 46.3% to the Group's total revenue respectively.
2H FY2023 vs 2H FY2022
For second half year ended 31 March 2023 ("2H FY2023"), the Group's revenue was S$50.9 million, representing increase of S$0.9 million or 1.7% compared to S$50.0 million for the corresponding period ended 31 March 2022 ("2H FY2022"). The revenues segmented by business shows the Energy business contributed revenue of S$28.2 million which was 1.5% lower compared to 2H FY2022. The Marine business contributed revenue of S$22.6 million increasing 6.2% compared to 2H FY2022. In 2H FY2023, the Energy and Marine business segments contributed 55.5% and 44.5% to the Group's total revenue respectively.
Gross profit
FY2023 vs FY2022
The Group reported gross profit of S$21.5 million in FY2023, representing a 8.4% or S$1.6 million increase compared to a gross profit of S$19.9 million in FY2022. With constant revenue, Gross Profit margin improved to 21.7% compared to 20.0% in FY2022.
2H FY2023 vs 2H FY2022
The Group reported gross profit was S$11.8 million in 2H FY2023, representing a 33.7% or S$3.0 million increase compared to a gross profit of S$8.8 million in 2H FY2022.
Distribution costs
FY2023 vs FY2022
Distribution costs decreased by 1.8% to S$9.5 million in FY2023 compared to S$9.7 million in FY2022.
2H FY2023 vs 2H FY2022
Distribution costs decreased by 12.4% to S$4.3 million in FY2023 compared to S$5.0 million in FY2022 due to reduction in staff costs.
Administrative expenses
FY2023 vs FY2022
Administrative expenses decreased by 8.5% to S$20.8 million in FY2023 compared to S$22.7 million in FY2022 primarily due to reduction in staff costs, depreciation and professional & legal fee.
2H FY2023 vs 2H FY2022
Administrative expenses decreased by 12.4% to S$10.1million in FY2023 compared to S$11.6 million in FY2022 due to reduction in (i) staff costs of S$0.7 million, (ii) depreciation of S$0.6 million and (iii) professional and legal fee of S$0.2 million.
Other operating income
FY2023 vs FY2022
Other operating income in FY2023 decreased by 55.7% to S$0.8 million in FY2023 compared to S$1.7 million in FY2022. This was mainly due to reduction in trade payable written back by S$0.7 million and sundry income of S$0.2 million in FY2023.
Other operating income included rental income, interest income, sundry income, government grants, trade payables written back and recovery of bad debts.
2H FY2023 vs 2H FY2022
Other operating income decreased by 16.9% to S$0.4 million in 2H FY2023 compared to S$0.5 million in 2H FY2022.
Other operating expenses
FY2023 vs FY2022
Other operating expenses decreased by 13.0% to S$2.4 million in FY2023 compared to the S$2.8 million in FY2022.
The FY2023 operating expenses included: (i.) S$1.9 million foreign exchange loss mainly from the depreciation of USD against SGD and other non-recurring expenses of S$0.4 million.
The FY2022 operating expenses included: (i.) a non-recurring expense of S$2.0 million, (ii.) S$0.7 million foreign exchange loss from the depreciation of USD against SGD, and (iii.) trade receivable written off of S$0.1 million.
2H FY2023 vs 2H FY2022
Other operating expenses increased by 20.2% to S$1.7 million in 2H FY2023 compared to the S$1.5 million in 2H FY2022.
The 2H FY2023 operating expenses included: (i.) S$1.6 million foreign exchange loss mainly from the depreciation of USD against SGD, and (ii) doubtful debt provision of S$0.1 million.
The 2H FY2022 operating expenses included: (i.) a non-recurring expense of S$1.1 million, and (ii.) S$0.5 million foreign exchange loss from the depreciation of USD against SGD.
Finance cost
FY2023 vs FY2022
Finance cost in FY2023 increased by 8.1% as compared to FY2022 due to substantially higher interest rates despite reduced bank borrowings.
2H FY2023 vs 2H FY2022
The finance cost increased 2H FY2023 by 35.6% as compared to 2H FY2022 due to steep escalation in interest rates which was compensated partly by reduced bank borrowings.
Loss for the period
In FY2023, the Group reported a loss before income tax of S$12.0 million, 14.1% lower than the S$14.0 million in FY2022. This FY2023 loss for the period was lower compared to FY2022 due to better gross profit of S$1.7 million and lower Distribution and Administrative expenses of S$2.1 million.
Total Comprehensive Income for the period
The total comprehensive loss for FY2023 was S$7.4 million compared to S$6.9 million FY2022. In FY2023, the Group recorded a total revaluation gain of S$4.5 million from increase in the fair values of the buildings at 156 Gul Circle, Singapore 629613 and 51, Saenggoksandan 1-Ro Gangseo-gu Busan, South Korea 46729 following a valuation of the market value of the buildings.
Review of condensed interim statements of financial position
Current assets
Current assets decreased 7.2% (or S$5.3 million) from S$73.9 million as at 31 March 2022 to S$68.6 million as at 31 March 2023. The changes was mainly due to: (i.) a decrease in inventories by S$3.3 million (ii.) a decrease in receivables of S$1.7 million, and (iii.) a decrease in cash and cash equivalents of S$0.4 million.
Non-current assets
Non-current assets decreased 4.9% (or by S$3.7 million) from S$77.0 million as at 31 March 2022 to S$73.2 million as at 31 March 2023. The decrease was mainly due to the decrease in Right of Use assets of S$1.0 million and Intangible assets of S$0.7 million, decrease in property, plant and equipment of S$2.0 million.
Current liabilities
Current liabilities decreased 8.4% (or by S$2.8 million) from S$33.0 million as at 31 March 2022 to S$30.2 million as at 31 March 2023. The decrease was mainly due to: (i.) repayment of S$1.8million in the current portion of bank borrowings, (ii.) leases and finances liabilities of S$1.7 million, (iii) contract liabilities of S$0.6 million, offset with increase from trade and other payables of S$1.4million.
Non-current liabilities
Non-current liabilities decreased 13.6% (or by S$2.8 million) from S$20.6 million as at 31 March 2022 to S$17.8 million as at 31 March 2023. The decrease was mainly due to repayment of S$2.2 million bank borrowings and S$0.6 million of lease liabilities in FY2023.
Capital, reserves and non-controlling interests
Shareholders' equity decreased 3.5% to S$93.8 million in FY2023 from S$97.3 million in FY2022, mainly due to loss of S$12.0 million incurred in FY2023 offset by rights issue of S$4.0 million and increase in revaluation reserve of S$4.5 million from the revaluation of leasehold/freehold land and building.
Review of condensed interim consolidated statement of cash flows
FY2023 ended 31 March 2023
The Cash balance of S$6.8 million as at 31 March 2023 decreased 5.9% (S$0.4 million) compared to S$7.3 million as at 31 March 2023.
Net cash (used in) / generated from operating activities
Net cash generated from operating activities was S$3.2 million in FY2023, which was better compared to S$5.3 million net cash used from operating activities for FY2022.
Operating cash generated was S$3.4 million to support operating activities in FY2023 before changes in working capital.
Net working capital inflow was S$3.0 million in FY2023 improved comparing to net working capital outflow of S$5.4 million in FY2022. This was mainly due to (i.) a decrease in inventories by S$2.9 million resulting from sales during the normal course of business and efforts to reduce inventory, and (ii) a total decrease in trade receivables of S$1.4 million due to aggressive collection efforts, (iii) a net increase in trade payables, other payables and contract liabilities of S$3.2 million.
Net cash generated from investing activities
Net cash used in investing activities amounted to S$0.1 million in FY2023 mainly due to proceed from disposal of plant and equipment of S$0.6 million and additions to intangible asset of S$0.1million, offset by the payment for purchase of plant and equipment of S$0.6 million.
Net cash generated from / (used in) financing activities
Net cash used in fnancing activities was S$2.8 million in FY2023 mainly due to the net proceeds from the issuance of rights issue shares of S$4.0 million, offset by (i) repayment of bank borrowings and related interest plus leased liabilities and related interest of S$7.5 million, and (ii.) increase in restricted cash balances of S$0.7 million.
2H FY2023 ended 31 March 2023
Net cash (used in) / generated from operating activities
In 2H FY2023, the Group incurred an operating cash outflow of S$0.5 million before movements in working capital.
Net working capital inflow was S$0.5 million in 2H FY2023. This was mainly due to (i.) a total decrease in trade receivables of S$1.3 million due to aggressive collection efforts, and (ii.) a decrease in inventories by S$2.9 million resulting from sales and efforts to reduce inventory, (iii) offset by a net increase in trade payables, other payables and contract liabilities of S$2.1 million.
Net cash generated from investing activities
Net cash inflow from investing activities in 2H FY2023 has no significant variances mainly due to proceeds from disposal of plant and equipment of S$0.3 million offset by payment for purchase of plant and equipment of S$0.3 million.
Net cash used in financing activities
Net cash generated from financing activities amounted to S$0.4 million in 2H FY2023. The cash used is mainly for (i.) the repayment of bank borrowings and related interest and leased liabilities and related interest of S$3.6 million, and (iii.) increase in rights issues of S$4.0 million.
Commentary
AMOS Group Limited (“AMOS”) is a long-established company supplying products and services to the Energy and Marine industries from a network of facilities spanning Asia, the Middle East, and Europe. During FY2023 (ending 31 March 2023) both the Energy and Marine industries faced headwinds from global macro-economic trends as well as the uneven Covid recovery amongst countries.
AMOS was able to navigate these tumultuous FY2023 challenges and improve financial performance following significant management changes focused on increasing operational efficiency. These corporate actions started in June 2023 and included simplifying operations, introducing new management personnel and structures, and implementing actions to improve business efficiency.
As a result of these corporate actions, AMOS was able to deliver positive operating results and improve cash flow. In the 2nd half of FY2023 AMOS grew Revenues by 1.7%, delivered an improvement in the Gross Profit Margin to 23.2% (vs 17.7% in prior year), and reduced by S$2.1 million (or 12.4% decline vs prior year) in Distribution Costs and Administrative Costs, which altogether resulted in a positive Operating Profit (EBITDA) of S$1.0 million (vs a loss of S$3.3 million in prior year). Moreover, by the end of FY2023, AMOS significantly improved its balance sheet strength by decreasing the total amount of Trade Receivables and Inventory by 8.3% while decreasing bank borrowings by 17% to S$19.6 million and maintaining cash balances of S$6.8 million.
Going forward the volume and efficiency of marine transportation supporting the global economy and the supply and demand for energy will continue impacting the business prospects of AMOS. Marine and energy are vast industries with significant activity and opportunities for a medium-sized company such as AMOS. More specifically, the major driver of near-term future success for AMOS will be our own actions in creating a more efficient and effective business operating model providing our customers with the products, services, and solutions they require at reasonable prices. We are constantly striving to improve our technology, our inhouse products such as Alcona, and our asset utilization to harvest these opportunities for AMOS, our shareholders, and all our other important stakeholders.
Meanwhile, AMOS is pursuing new initiatives to manage future challenges in energy transition, operating costs, and business scale. The transition to clean energy is clearly underway and AMOS is developing strategies to help our customers. Rising costs has been a more obvious challenge in the past year and is a continuing concern. AMOS is doubling the size of our manufacturing center of excellence in Malaysia to strengthen the core of our energy business and to prepare us to be ready to serve the renewable energy industry. AMOS is also broadening our logistics center of excellence in Singapore with our high-tech logistics hub at 156 Gul Circle. These changes will enable us to scale and capitalise on our key strengths against our competition.
As with most businesses, AMOS is affected by changes in global geopolitics and macroeconomics. However, with the recent strategic restructuring and management changes, AMOS is better positioned to weather economic down-cycles and capture emerging opportunities. The people at AMOS are a key asset, and so retention of current outstanding staff and recruitment of new outstanding staff are critical to our business. Our goals of minimizing risks and maximizing opportunities is based on lowering our operating cost base while improving customer service through solutions-oriented products and services.