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The Group's revenue increased by 31.3% from US$275.9 million to US$362.2 million, and gross profit increased by 49.7% from US$13.4 million to US$20.0 million, due to higher sales from the Hong Kong and Singapore business units arising from stronger demand.
Other income increased from US$0.1 million to US$0.3 million mainly due to government grant received in 2Q2018.
Sales and distribution costs increased by 65.6% from US$6.3 million to US$10.4 million, and general and administrative expenses increased by 79.6% from US$2.9 million to US$5.2 million. These were mainly due to staff cost, net foreign exchange loss arising from the translation of balances denominated in foreign currency into functional currency and new system enhancements related expenses across the Group.
Other expenses decreased by US$1.5 million. This was due to lower allowance for doubtful trade debts in 2Q2018.
Interest expense increased by 78.6% from US$0.9 million to US$1.7 million mainly due to higher borrowings and higher financing cost from the hikes in interest rates.
Overall, the Group reported an increase in profit after taxation by 58.4% from US$1.4 million to US$2.2 million.
During the quarter, the Group's net cash flow used in operating activities was US$8.7 million compared to net cash flow generated from operating activities of US$2.5 million in 2Q2017, mainly due to higher working capital requirements.
The Group's trade and other debtors increased from US$199.1 million to US$207.8 million as at 30 June 2018 mainly due to increase in sales. Stock increased from US$175.0 million to US$191.8 million as at 30 June 2018.
Trade and other creditors increased from US$169.3 million to US$175.8 million as at 30 June 2018, due to higher purchase of stock.
Interest-bearing loans and borrowings increased from US$142.7 million to US$166.4 million as at 30 June 2018 to fund the working capital requirements.
The Group's cash and short term deposits was US$13.1 million as at 30 June 2018 as compared to US$10.0 million as at 31 December 2017.
Overall, shareholders' equity decreased to US$73.5 million from US$73.8 million as at 31 December 2017, due to dividend payment of US$4.0 million in 1H2018. This was partially offset by the net profit of US$3.7 million for 1H2018.
Our continued focus on building value-added capabilities has given rise to new business opportunities in key segments of our business, in particular Mobile and Computing, Industrial and Instrumentation, and Consumer Electronics. The outlook for the electronics manufacturing supply chain remains positive with new and innovative technologies, such as 5G, E-Vehicles and the introduction of autonomous systems, expanding the range of applications which will increase the demand for our products and services. We continue to see growth potential in the India market especially with infrastructure developments in sectors such as banking, security and manufacturing.
While there are uncertainties in the business environment, we see promising opportunities in the regions we operate in. We believe that with our strong positioning in the electronics value chain, we can mine these opportunities and grow our business sustainably.