Full Year Results Financial Statement And Related Announcement
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Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income
Review Of Performance
INCOME STATEMENT – Comparing 4Q2017 to 4Q2016
The Group's revenue increased by 18.9% from US$250.2 million to US$297.5 million, and gross profit increased by 15.8% from US$14.8 million to US$17.1 million, due to higher sales from the Hong Kong and Singapore business units arising from stronger demand.
Other income decreased by 44.8% from US$192,000 to US$106,000 mainly due to income received in 4Q2016 from the divestment of non-core research and development division in 2014.
Sales and distribution costs increased by 7.4% from US$7.9 million to US$8.5 million, and general and administrative expenses increased by 42.0% from US$3.7 million to US$5.3 million. These were mainly due to higher staff costs, programs related to the Group's 30th anniversary and professional fees.
Included in other expenses was net write-back of allowance for doubtful trade debts of US$1.3 million in 4Q2017 due to the recovery of trade debts.
Interest expense increased by 49.9% from US$0.8 million to US$1.2 million mainly due to higher borrowings and higher financing costs from the hikes in interest rates.
Overall, the Group reported an increase in profit after taxation by 10.1% from US$2.6 million to US$2.8 million.
CASHFLOW – Comparing 4Q2017 to 4Q2016
The Group's net cash flows used in operating activities was US$16.1 million compared to net cash flows generated from operating activities of US$3.8 million in 4Q2016, mainly due to increase in trade debtor and stock. This was due to higher sales in 4Q2017 as compared to 4Q2016.
The Group's net cash flows used in investing activities was US$0.5 million compared to US$1.1 million in 4Q2016. The decrease was mainly due to no purchase of motor vehicles and club memberships in 4Q2017.
The Group's net cash inflows generated from financing activities was US$9.9 million compared to US$6.2 million in 4Q2016, mainly due to the increase in interest-bearing loans and borrowings.
INCOME STATEMENT – Comparing FY2017 to FY2016
The Group's revenue increased by 16.0% from US$988.2 million to US$1,146.4 million, and gross profit increased by 10.5% from US$55.1 million to US$60.9 million, due to higher sales arising from stronger demand in FY2017.
Sales and distribution costs decreased by 2.2% from US$29.8 million to US$29.2 million mainly due to net foreign exchange gain.
General and administrative expenses increased by 11.1% from US$15.7 million to US$17.4 million. This was mainly due to new system enhancements across the Group, staff costs and programs related to the Group's 30th anniversary.
Included in other expenses was net allowance for doubtful trade debts of US$0.5 million in FY2017, and net write-back of allowance for doubtful trade debts of US$0.8 million in FY2016.
Interest expense increased by 66.1% from US$2.5 million to US$4.1 million mainly due to higher borrowings arising from increase in working capital needs and higher financing costs from the hikes in interest rates.
Overall, the Group reported an increase in profit after taxation by 14.8% from US$7.1 million to US$8.1 million.
CASHFLOW AND FINANCIAL POSITION – Comparing FY2017 to FY2016
The Group's net cash flows used in operating activities was US$21.8 million compared to US$20.5 million in FY2016, mainly due to the increase in the requirement for working capital.
The Group's trade and other debtors increased from US$155.4 million to US$199.1 million as at 31 December 2017. Stock increased from US$131.6 million to US$175.0 million as at 31 December 2017. The increases in trade debtors and stock were mainly due to the increase in sales.
Trade and other creditors increased from US$113.9 million to US$169.3 million as at 31 December 2017 due to higher purchase of stock in support of increased sales.
Interest-bearing loans and borrowings increased from US$123.5 million to US$142.7 million as at 31 December 2017 to fund the working capital requirements.
The Group's cash and short term deposits was US$10.0 million as at 31 December 2017 as compared to US$16.6 million as at 31 December 2016.
Overall, shareholders' equity increased to US$73.8 million from US$68.3 million as at 31 December 2016, mainly due to the profit for the year of US$8.1 million, net gain on fair value changes of available-for-sale financial assets of US$0.5 million and issuance of new shares of US$0.3 million. This was partially offset by the payment of dividends of US$3.4 million during the year.
The outlook for the electronics and semiconductor industry continues to be positive in 2018. We continue to see business opportunities arising in the markets we serve. Increasingly, technology applications require more electronic components than before, and this is one of our key growth drivers. The recent Consumer Electronics Show held in Las Vegas in January 2018 showcased many new and exciting developments, which will fuel additional demand for technology solutions and applications especially in wireless connectivity and sensors, which are vital segments to the entire Internet of Things ("IoT") infrastructure. We believe that these developments will support our business growth for FY2018.
The Group celebrated a great milestone, its 30th year anniversary in 2017, and achieved record revenue crossing US$1 billion for FY2017. Various initiatives on technological innovations, product development and service capabilities have been implemented to drive our business growth. We have recently invested in an IoT demonstration facility that showcases our Research and Development ("R&D") capabilities that brings together cutting-edge technologies from our suppliers. Moving forward, the Group will continue to strengthen our value-added services to enhance our position in the market as a B-to-B platform. While we work on capturing new business opportunities both organically and inorganically, the Group remains focused at driving operational efficiencies and sustainable growth for the year ahead.