Financial Statements And Related Announcement - Third Quarter Results
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Consolidated Income Statement
Consolidated Statement of Other Comprehensive Income
Review Of Performance
INCOME STATEMENT – Comparing 3Q2016 to 3Q2015
The Group's revenue increased by 32.8% from US$224.3 million to US$297.8 million, and gross profit increased by 19.1% from US$12.7 million to US$15.2 million, which were due to the higher sales from the Hong Kong and Singapore business units arising from stronger seasonal demand.
Other income decreased by 49.9% from US$387,000 to US$194,000 mainly arising from income received in 3Q2015 following the divestment of the non-core research and development division in 2014.
Sales and distribution costs remained constant at US$7.9 million.
General and administrative expenses increased by 34.9% from US$3.1 million to US$4.2 million. These were mainly due to higher staff costs and rental.
Included in other expenses were net write-back of allowance for doubtful trade debts of US$53,000 and US$345,000 in 3Q2015 and 3Q2016 respectively, mainly due to the recovery of trade debts.
Interest expense increased by 45.2% from US$0.5 million to US$0.7 million mainly due to higher borrowings arising from the increase in working capital needs.
Overall, the Group reported an increase in profit after taxation by 81.2% from US$1.3 million to US$2.4 million.
FINANCIAL POSITION AND CASHFLOW
During the quarter, the Group's net cash flows used in operating activities was US$20.5 million compared to US$9.7 million in 3Q2015, mainly due to increase in the requirement for working capital by US$19.7 million.
The Group's trade debtors increased from US$135.2 million to US$187.1 million as at 30 September 2016, which was in line with the increase in sales. Stock increased from US$111.6 million to US$123.6 million as at 30 September 2016.
Trade creditors and accruals increased from US$93.1 million to US$125.8 million as at 30 September 2016 due to higher purchase of stock.
Interest-bearing loans and borrowings increased from US$99.4 million to US$123.0 million as at 30 September 2016 to fund the working capital requirements.
The Group's cash and short term deposits was US$7.7 million as at 30 September 2016 as compared to US$10.7 million as at 31 December 2015.
Overall, shareholders' equity increased to US$59.8 million from US$57.2 million as at 31 December 2015, mainly due to the profit for the period of US$4.5 million. This was offset by the payment of dividends of US$1.9 million during the period.
The Group will continue to grow its business amidst the uncertainties affecting the global market. China's economic conditions are stabilizing and these in turn will lead to an increase in demand for our range of products. The Group will continue to seek opportunities in emerging markets in the Asia Pacific region. We see growth opportunities in India arising from its government's investments in infrastructure projects particularly in the banking, communication and transportation sectors.
The semiconductor and microelectronics industries are consolidating and these could provide us with opportunities to market a wider range of electronic consumer products. We will continue to build on our strength as a valued distributor by strengthening our engineering design capabilities.