Captii Limited

Investor Relations.
 
 

Financial Statements And Related Announcement - Full Yearly Results

Financials Archive

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Condensed consolidated statement of profit or loss and other comprehensive income

 
Group
12 months ended 31 December
2023
2022
 
S$'000
S$'000
Revenue
18,281
23,249
Cost of sales
(9,766)
(11,947)
Gross profit
8,515
11,302
Other items of income:    
Interest Income
169
171
Other gains
140
59
Other items of expense:    
Technical support expenses
(4,653)
(4,548)
Distribution costs
(1,186)
(1,201)
Administrative expenses
(3,100)
(3,272)
Other losses
(11,145)
(4,994)
Finance costs
(28)
(44)
Loss before income tax
(11,288)
(2,527)
Income tax expenses
(429)
(717)
     
Loss, net of tax
(11,717)
(3,244)
     
Loss, net of tax attributable to:    
Owners of the company
(8,416)
(3,508)
Non-controlling interests
(3,301)
264
Loss, net of tax
(11,717)
(3,244)

Other comprehensive loss

 
Group
12 months ended 31 December
2023
2022
 
S$'000
S$'000
Loss, net of tax
(11,717)
(3,244)
Other comprehensive loss:    
Items that may be reclassified to profit or loss in subsequent periods (net of tax)    
Currency translation differences on consolidation of foreign entities (net)
(1,635)
(1,985)
Total other comprehensive loss for the financial year
(13,352)
(5,229)
     
Total comprehensive loss attributable to:    
Owners of the company
(9,781)
(5,250)
Non-Controlling interest
(3,571)
21
Total other comprehensive loss for the financial year
(13,352)
(5,229)
     
Earnings per share for loss for the year attributable to the owners of the company during the financial year:
cents
cents
Basic and diluted earnings per share
(26.34)
(10.98)

Condensed statements of financial position

 
Group
Group
As at
As at
31/12/2023
31/12/2022
S$'000
S$'000
ASSETS    
Non-Current Assets    
Plant and equipment
1,199
1,205
Investment property
1,895
2,010
Intangible assets
2,896
7,344
Investments in subsidiaries
-
-
Other financial assets
17,171
23,898
Deferred tax assets
654
804
Total non-current assets
23,815
35,261
     
Current assets    
Inventories
5
5
Trade and other receivables
8,662
11,246
Other non-financial assets
4,628
3,399
Cash and cash equivalents
10,965
13,223
Total current assets
24,260
27,873
     
Total assets
48,075
63,134
     
EQUITY AND LIABILITIES    
Equity    
Share capital
31,948
31,948
Retained earnings
15,950
24,765
Foreign currency translation reserve
(11,755)
(10,390)
Equity, attributable to owners of the parent
36,143
46,323
Non-controlling interest
6,525
10,384
Total equity
42,668
56,707
     
Non-current liabilities    
Lease liabilities
343
176
Deferred tax liabilities
33
-
Total non-current liabilities
376
176
     
Current liabilities    
Income tax payables
45
253
Trade and other payables
3,364
4,321
Other non-financial liabilities
458
479
Lease liabilities
318
301
Borrowings
846
897
Total current liabilities
5,031
6,251
     
Total liabilities
5,407
6,427
     
Total equity and liabilities
48,075
63,134
     

Review of performance of the Group

2.1 Review of performance of the group for the financial year ended 31 December 2023 as compared to corresponding financial year ended 31 December 2022

Group Revenue

The group recorded consolidated revenue of S$18.281 million for the financial year ended 31 December 2023 ("2023"), a 21.4% decrease against the revenue recorded in the corresponding financial year ended 31 December 2022 ("2022"). The decline in group revenue for 2023 is attributable to lower revenue recorded by both Unifiedcomms and GlobeOSS.

Unifiedcomms recorded revenue of S$11.743 million in 2023, a decrease of 21.4% from the S$14.935 million recorded in 2022. This decrease in revenue was due to lower managed service contract revenues.

GlobeOSS recorded revenue of S$6.538 million in 2023, a decrease of 21.4% from the S$8.314 million recorded in 2022. This decrease in revenue was due to lower system sale and managed service contract revenues.

The group's sales mix in 2023 showed an decrease in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 72.3% of the group's total revenue in 2023 as compared to 73.1% in 2022. The lower contribution of managed service contracts to the group's sales mix in 2023 is mainly attributable to the decrease in managed service contract revenues of the group, which declined by 22.1% from S$16.986 million in 2022 to S$13.224 million in 2023.

Gross profit and gross profit margins

With the lower revenue recorded in 2023, the group recorded lower gross profit of S$8.515 million, a decrease of 24.7% from the S$11.302 million realised in 2022. In addition, gross profit margin had decreased from 48.6% in 2022 to 46.6% in 2023.

The decrease in group gross profit margin is mainly attributable to the lower gross profit margin recorded on the group's system sale contract revenues, which decreased to 55.2% in 2023 from 61.2% in 2022. This was mainly due to lower Unifiedcomms system sale contracts gross profit margin in 2023, which caused by higher third-party component costs incurred in 2023.

The group's gross profit margin on managed service contract revenues decreased from 44% in 2022 to 43.3% in 2023. This decrease in gross profit margin was mainly due to higher third-party costs on certain managed service contracts.

Interest income

The group recorded interest income of S$0.169 million in 2023, flat against what was recorded in 2022.

Other gains and other item of expense

The group recorded net total expenses of S$19.972 million in 2023, 42.7% higher than the S$14 million incurred in 2022. This is mainly attributable to:-

The above impact was partly mitigated by lower administrative expenses recorded in 2023, in relation to lower corporate personel costs.

Net (loss)/profit and (LBITDA)/EBITDA

The group recorded a net loss of S$11.717 million and LBITDA of S$10.539 million in 2023 as compared to S$3.244 million in net loss and S$1.601 million in LBITDA recorded in 2022. The higher net loss and LBITDA results recorded in 2023 are mainly attributable to the flow-down effects of lower revenue, lower gross profit margin and higher net total expenses.

Detailed segmental breakdown of group revenue and gross profit

The detailed segmental breakdown of the group's revenue and gross profit for 2023, together with comparative results for 2022 is provided below:

Table 2.1: Group revenue as analysed by business unit for the financial year ended 31 December

 
2023
S$'000
Sales mix
%
2022
S$'000
Sales mix
%
Unifiedcomms
11,743
64.2
14,935
64.2
GlobeOSS
6,538
35.8
8,314
35.8
Captii Ventures
-
-
-
-
Others
-
-
-
-
Total
18,281
100.0
23,249
100.0

Table 2.2: Group revenue as analysed by contract type for the financial year ended 31 December

External Sales
2023
2022
System Sale(1)
Managed Service(2)
Group
System Sale(1)
Managed Service(2)
Group
Revenue
5,057
13,224
18,281
6,263
16,986
23,249
Gross Profit
2,790
5,725
8,515
3,834
7,468
11,302
Gross Profit (%)
55.2%
43.3%
46.6%
61.2%
44.0%
48.6%

Table 2.3: Group net total expenses for the financial year ended 31 December

Group
2023
S$'000
2022
S$'000
Other Gains
140
59
Technical Support Expenses
(4,653)
(4,548)
Distribution Costs
(1,186)
(1,201)
Administrative Expenses
(3,100)
(543)
Other Losses
(11,145)
(4,994)
Finance Cost
(28)
(44)
Net total expenses
(19,972)
(14,000)

2.2 Review of the group's financial position as at 31 December 2023 as compared to the group's financial position as at 31 December 2022

Non-cash current assets of the group decreased from S$14.65 million as at 31 December 2022 to S$13.295 million as at 31 December 2023. This 9.2% decrease in non-cash current assets was mainly due to a decrease in trade and other receivables as a result of lower revenue recorded.

Total non-current assets of the group decreased from S$35.261 million as at 31 December 2022 to S$23.815 million as at 31 December 2023. This decrease of 32.5% in noncurrent assets is attributable to:-

Total liabilities of the group decreased from S$6.427 million as at 31 December 2022 to S$5.407 million as at 31 December 2023. This 15.9% decrease in total liabilities is attributable to the decrease in trade and other payables following repayments made in the reporting year.

2.3 Review of the group's cash flow for the financial year ended 31 December 2023 as compared to the corresponding year ended 31 December 2022

The group's net cash flow from operations for 2023 was S$0.261 million, in contrast with the net cash flow used in operation of S$0.186 million for 2022. This increase was primarily due to lower working capital incurred of S$0.173 million for 2023, as compared to S$3.474 million for 2022, as higher repayment was made to the trade and other payables in 2022.

The group's net cash flow used in investing activities for 2023 was S$0.522 million, in contrast with the net cash flow from investing activities of S$2.021 million in 2022. This was primarily due to lower proceeds from the disposal of a venture investment in 2023 as compared to 2022.

The group's net cash flow used in financing activities for 2023 amounted to S$1.081 million as compared to S$0.605 million for 2022. The higher net cash used in financing activities was mainly due to higher repayment of borrowings in 2023.

Commentary

The economic uncertainty due to geo-political tensions, supply chain disruption, and rising inflation and interest rates, especially in the group's regions of focus, continue to weigh on the minds of management and the directors of the group when considering the outlook for the next twelve months.

The operations of Unifiedcomms and GlobeOSS in the financial year under review had been minimally impacted by geo-political tensions and supply chain disruption. However, due to the diminished expected performance of certain managed service contracts the value of Unifiedcomms as a CGU was adversely affected. The change in user behaviour in certain Unifiedcomms applications services, followed by the intensified pricing pressure within the telecommunication industry had directly and indirectly impacted the expected profitability of these managed service contracts, resulting in a significant reduction in the valuation of Unifiedcomms as a CGU in 2023. With the said lower CGU valuation, an impairment loss on goodwill of S$4.2 million in relation to this business was provided and reflected in the financial year under review, though this impairment loss has no cash flow impact to the group.

On the business front, both Unifiedcomms and GlobeOSS contracts in-hand continue to be progressed and management of the group are hopeful that new projects and initiatives requiring our products and services, will continue to be pursued by customers. The possibility remains however, that larger system sale contracts and certain managed service contracts that have yet to be committed in the financial year under review, may be further deferred, or even abandoned entirely if macroeconomic and industry conditions worsen or do not improve significantly enough.

At Captii Ventures, the group's venture investment business, the valuation of start-ups continues to be challenging. Such an environment for business market valuations for some of our investees had resulted in a substantial reduction in the fair value of Captii Ventures' investment portfolio, translating to a fair value loss of S$6.773 million in the financial year under review.

Against this negative macroeconomic backdrop for the future, the group remains optimistic and will continue to work closely with customers and investees, to minimise the negative impact of economic uncertainty on group financial performance.