Captii Limited

Investor Relations.
 
 

Financial Statements And Related Announcement - First Quarter Results

Financials Archive

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Consolidated Statement of Comprehensive Income

 
Group
Quarter ended 31 March
2017
2016
Inc/(dec)
 
S$'000
S$'000
%
Revenue
4,999
3,931
27.2
Cost of Sales
(2,377)
(1,512)
57.2
Gross profit
2,622
2,419
8.4
Other Items of Income:      
Interest Income
33
74
(55.4)
Other Gains
-
2
(100.0)
Other Items of Expense:      
Technical Support Expenses
(780)
(786)
(0.7)
Distribution Costs
(446)
(440)
1.5
Administrative Expenses
(566)
(544)
4.0
Other Losses
(51)
(269)
(81.2)
Shared of Result from Jointly-Controlled Entity
-
(1)
(100)
Profit Before Income Tax
812
455
78.5
Income Tax Expenses
(198)
(95)
108.9
 
 
 
 
Profit, Net of Tax
614
360
70.5
 
 
 
 
Profit, Net of Tax, Attributable to:
 
 
 
Owners of the Company
410
232
76.6
Non-Controlling Interest
204
128
59.6
Profit, Net of Tax
614
360
70.5

Consolidated Statement of Comprehensive Income

 
Group
Quarter ended 31 March
2017
2016
Inc/(dec)
 
S$'000
S$'000
%
Profit, Net of Tax
614
360
70.5
Other Comprehensive Income:      
Item that may be reclassified subsequently to profit or loss:      
Exchange Differences on Translating Foreign Operations, Net of Tax
(718)
1,463
(149.1)
Total Comprehensive Income for the period
(104)
1,823
(105.7)
       
Total Comprehensive Income for the period
Attributable to:
     
Owners of the Company
(252)
1,627
115.5
Non-Controlling interest
148
196
(24.4)
Total Comprehensive (Loss)/Income for the period
(104)
1,823
(105.7)

Balance Sheet

 
Group
Group
As at
As at
31/3/2017
31/12/2016
S$'000
S$'000
   
ASSETS
 
 
Non-Current Assets
 
 
Plant and Equipment
1,440
1,288
Investment Property
2,526
2,588
Intangible Assets
11,224
11,582
Investments in Subsidiaries
-
-
Investment in an Associate
1,819
1,819
Other Financial Assets
5,988
5,370
Deferred Tax assets
432
436
Total Non-Current Assets
23,429
23,083
 
Current assets
 
 
Inventories
13
26
Trade and Other Receivables
9,713
17,346
Other Assets
304
339
Cash and Cash Equivalents
10,637
9,055
Total Current Assets
20,667
26,766
 
 
 
Total Assets
44,096
49,849
 
 
 
EQUITY AND LIABILITIES
 
 
Equity
 
 
Share Capital
31,948
31,948
Retained Earnings
13,472
13,062
Foreign Currency Translation Reserve
(9,788)
(9,126)
Equity, Attributable to Owners of the Parent
35,632
35,884
Non-Controlling Interest
2,399
2,405
Total Equity
38,031
38,289
 
 
 
Non-Current Liabilities
 
 
Deferred Tax Liabilities
500
500
Total Non-Current Liabilities
500
500
 
Current Liabilities
 
 
Income Tax Payables
322
241
Trade and Other Payables
3,766
8,818
Other Liabilities
1,477
2,001
Total Current Liabilities
5,565
11,060
 
Total Liabilities
6,065
11,560
 
 
 
Total Equity and Liabilities
44,096
49,849
 
 
 

Review of Performance

Review of results for the financial period ended 31 March 2017 as compared to corresponding financial period ended 31 March 2016

Revenue

The Group achieved consolidated revenue of S$4.999 million for the quarter ended 31 March 2017 ("Q1 2017"), an increase of 27.2% against the revenue recorded in the corresponding quarter ended 31 March 2016 ("Q1 2016"). The increase in Group revenue for Q1 2017 is attributable to the improved revenue performance by both GlobeOSS and Unifiedcomms.

GlobeOSS posted revenue of S$2.041 million in Q1 2017, an increase of 95.5% from the S$1.044 million recorded in Q1 2016. This increase was driven by higher revenue from system sale contracts.

Unifiedcomms closed the quarter with revenue of S$2.958 million in Q1 2017, an increase of 4.4% from the S$2.833 million recorded in Q1 2016. This increase was driven by higher revenue from managed service contracts.

The Group's Others segment currently received nil rental revenue in Q1 2017, following the expiry of tenancy agreement on the Group's investment property.

The Group's sales mix in Q1 2017 showed a decrease in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 61.2% of the Group's total revenue in Q1 2017 as compared to 74.5% in Q1 2016. The lower contribution of managed service contracts to the Group's sales mix in Q1 2017 is mainly attributable to the increase in system sale contract revenues of the Group, which had improved 93.6% from S$1.003 million in Q1 2016 to S$1.942 million in Q1 2017.

Gross Profit and Gross Profit Margins

The Group posted gross profit of S$2.622 million in Q1 2017, an increase of 8.4% from the S$2.419 million recorded in Q1 2016, gross profit margin was lower at 52.5% as compared to 61.5% in Q1 2016. This was primarily due to lower gross profit margin realised on Group's system sale contract revenues, which declined from 65.8% in Q1 2016 to 46.1% in Q1 2017. The decline in gross profit margin is mainly attributable to the higher proportionate contribution of system sale contract revenues by GlobeOSS, which generally delivers lower gross profit margin as a result of its typically higher third party costs.

Gross profit margin recorded by the Group on its managed service contract revenues also decreased to 56.5% in Q1 2017 from 60.1% in Q1 2016. This decrease in gross profit margin was primarily due to higher third-party costs on certain managed service contracts, coupled with the lower revenue contribution of certain mature, higher-margin managed service contracts.

Interest Income

The Group recorded interest income of S$0.033 million in Q1 2017, 55.4% lower against the S$0.074 million recorded in Q1 2016. This is mainly attributable to lower cash and cash equivalents as a result of on-going investment in other financial assets.

Other Items of Expense

The Group recorded total expenses of S$1.843 million in Q1 2017, 9.7% lower than the S$2.040 million incurred in Q1 2016. This was primarily due to lower foreign exchange loss as a result of favourable exchange rate movements of USD, PKR and MYR against the Group's reporting currency, SGD.

Net Profit and EBITDA

The Group achieved higher net profit of S$0.614 million and EBITDA of S$1.048 million in Q1 2017 as compared to the S$0.360 million in net profit and S$0.698 million in EBITDA recorded by the Group in Q1 2016. The higher net profit and EBITDA results achieved in Q1 2017 are mainly attributable to the flow-down effect of higher revenue and lower operating expenses recorded in Q1 2017.

Detailed Segmental Breakdown of Group Revenue and Gross Profit

The detailed segmental breakdown of the Group's revenue and gross profit for Q1 2016, together with comparative results for Q1 2015 is provided below:

Group revenue as analysed by business unit for the quarter ended 31 March

 
2017
S$'000
Sales mix
%
2016
S$'000
Sales mix
%
Unifiedcomms
2,958
59.2
2,833
72.1
GlobeOSS
2,041
40.8
1,044
26.6
Others
-
-
54
1.3
Total
4,999
100.0
3,931
100.0

Unifiedcomms - Segment for content-driven mobile VAS, messaging and signaling systems, solutions and managed services.

GlobeOSS - Segment for mobile network operation support systems, solutions and managed services.

Others - Segment for operational headquarters of the Group and investment holding.

Group revenue as analysed by geographical segment for the quarter ended 31 March

External Sales
2017
Unifiedcomms
S$'000
GlobeOSS
S$'000
Others
S$'000
Group
S$'000
South East Asia (SEA)
2,675
2,037
-
4,712
South Asia (SA)
201
-
-
201
Middle East & Africa (MEA)
82
-
-
82
Others
-
4
-
4
Total
2,958
2,041
-
4,999

External Sales
2016
Unifiedcomms
S$'000
GlobeOSS
S$'000
Others
S$'000
Group
S$'000
SEA
2,455
1,027
54
3,536
SA
216
-
-
216
MEA
162
-
-
162
Others
-
17
-
17
Total
2,833
1,044
54
3,931

Group revenue as analysed by contract type for the quarter ended 31 March

External Sales
2017
2016
System Sale(1)
Managed Service(2)
Group
System Sale(1)
Managed Service(2)
Group
Revenue
1,942
3,057
4,999
1,003
2,928
3,931
Gross Profit
895
1,727
2,622
660
1,759
2,419
Gross Profit (%)
46.1%
56.5%
52.5%
65.8%
60.1%
61.5%

(1)System Sale - this refers to contracts that involve the outright purchase by customers of systems comprising the Group's products and technologies, and where these systems are in turn delivered as turnkey solutions. The scope of work for a system sale contract includes system design, implementation, testing and commissioning services.

(2) Managed Service - this refers to contracts that involve the provision of both systems comprising the Group's products and technologies as well as the Group's professional services, on a recurring, revenue sharing, software-as-a-service, pay-per-use or monthly or quarterly fixed and variable fee basis. Also treated as a managed service contract are system maintenance and technical support contracts with existing customers of the Group.

Review of the Group's financial position as at 31 March 2017 as compared to the Group's financial position as at 31 December 2016

Non-cash current assets of the Group decreased from $17.711 million as at 31 December 2016 to S$10.030 million as at 31 March 2017. This 43.4% decrease in non-cash current assets was mainly due to the decrease in trade and other receivables of the Group, as a result of higher collection related to trade receivables from late 2016.

Total non-current assets of the Group increased from S$23.083 million as at 31 December 2016 to S$23.429 million as at 31 March 2017. This 1.5% increase in non-current assets is mainly attributable to:-

* An increase in investment in other financial assets, made by the Group's subsidiary, Captii Ventures Pte Ltd; and
* An increase in investment in plant and equipment.

The above impact was however partly mitigated by the effect of foreign exchange on investment property and goodwill arising on consolidation (classified under the intangible assets) as a result of weakening MYR against SGD.

Total liabilities of the Group decreased from S$11.560 million as at 31 December 2016 to S$6.065 million as at 31 March 2017. This 47.5% decrease in total liabilities is attributable to the decrease in trade and other payables, and other liabilities.

Review of the Group's cash flow for the quarter ended 31 March 2017 as compared to the corresponding quarter ended 31 March 2016

The Group's net cash flow from operations for Q1 2017 was S$3.161 million, as compared to S$0.523 million for Q1 2016, an increase of 504.4%. This significant increase was primarily due to a favourable working capital change of S$2.112 million for Q1 2017, in contrast with the unfavourable working capital change of S$0.175 million for Q1 2016, mainly contributed by higher collection from trade receivables in Q1 2017 as explained above. In addition, the improvement in profit before tax of S$0.812 million for Q1 2017 from S$0.455 million for Q1 2016.

The Group's net cash flow used in investing activities for Q1 2017 was S$0.961 million, as compared to S$0.503 million for Q1 2016. The higher net cash used in investing activities was mainly due to the higher investment cost on plant and equipments and investments on certain technology companies (classified as other financial assets and an associate).

The Group's net cash flow used in financing activities for Q1 2017 amounted to S$0.750 million as compared to S$0.028 million for Q1 2016. The higher net cash used in financing activities was mainly due to:-

* Restricted deposits placed as performance bond in connection with system sale contracts; and
* Dividend payout by a subsidiary to Non-Controlling Interest in Q1 2017.

Commentary

The directors and management of the Group expect the remainder of financial year 2017 to be challenging but remain optimistic about growth prospects.

Although 2016 proved to be another unexpectedly good year for business generated from system sale contracts, management does not expect this to be a trend that can bereadily extended into 2017. Significant uncertainty and hence lumpiness is still to be expected in the contribution of system sale contracts to the performance of both Unifiedcomms and GlobeOSS businesses. The Group's need to continue strengthening its managed service contract portfolio for delivering steady and sustainable growth remains.

Management will continue to work on improving execution in respect of strategies and tactics to grow Group managed service contract revenues and profit.

The growing interest and opportunity in internet-driven application services, new media and applications delivered on an advertisement-supported or advertisement-funded model continues to be recognised by management of the Group. The Group's strategic and venture investment plans in the year ahead will continue to focus primarily on these growth businesses in the SEA and SA regions and will complement the growth initiatives of existing businesses.