Financial Statements And Related Announcement - Third Quarter Results
Financials Archive
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Condensed consolidated statement of profit or loss and other comprehensive income
Q3 2024 |
Q3 2023 |
2024 |
2023 |
|
S$'000 |
S$'000 |
S$'000 |
S$'000 |
|
| Revenue | 4,839 |
3,465 |
11,383 |
13,653 |
| Cost of sales | (1,960) |
(1,838) |
(5,269) |
(7,607) |
| Gross profit | 2,879 |
1,627 |
6,114 |
6,046 |
| Other items of income: | ||||
| Interest Income | 21 |
30 |
66 |
94 |
| Other gains | (102) |
53 |
27 |
188 |
| Other items of expense: | ||||
| Technical support expenses | (1,184) |
(1,130) |
(3,556) |
(3,379) |
| Distribution costs | (424) |
(396) |
(1,195) |
(1,202) |
| Administrative expenses | (528) |
(535) |
(1,559) |
(1,618) |
| Other losses | (4,887) |
34 |
(6,815) |
(21) |
| Finance costs | (6) |
(5) |
(41) |
(34) |
| (Loss)/Profit before income tax | (4,231) |
(322) |
(6,959) |
74 |
| Income tax expenses | (120) |
(68) |
(256) |
(165) |
| (Loss)/Profit, net of tax | (4,351) |
(390) |
(7,215) |
(91) |
| Loss/(Profit), net of tax attributable | ||||
| Owners of the Company | (2,761) |
(227) |
(5,245) |
(42) |
| Non-controlling interests | (1,590) |
(163) |
(1,970) |
(49) |
| (Loss)/Profit, net of tax | (4,351) |
(390) |
(7,215) |
(91) |
Other comprehensive loss
Q3 2024 |
Q3 2023 |
2024 |
2023 |
|
S$'000 |
S$'000 |
S$'000 |
S$'000 |
|
| Loss, net of tax | (4,351) |
(390) |
(7,215) |
(91) |
| 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) | 1,938 |
290 |
2,021 |
(1,108) |
| Total other comprehensive loss for the financial period | (2,413) |
(100) |
(5,194) |
(1,199) |
| Total comprehensive profit/(loss) attributable to: | ||||
| Owners of the company | (1,061) |
38 |
(3,509) |
(982) |
| Non-Controlling interest | (1,351) |
(138) |
(1,685) |
(217) |
| Total other comprehensive loss for the financial period | (2,413) |
(100) |
(5,194) |
(1,199) |
| Earnings per share for loss for the year attributable to the owners of the company during the financial period: | cents |
cents |
cents |
cents |
| Basic and diluted earnings per share | (8.64) |
(0.71) |
(16.41) |
(0.13) |
Condensed statements of financial position
Group |
Group |
|
As at |
As at |
|
30/9/2024 |
31/12/2023 |
|
S$'000 |
S$'000 |
|
| ASSETS | ||
| Non-current assets | ||
| Plant and equipment | 938 |
1,199 |
| Investment property | 2,041 |
1,895 |
| Intangible assets | 3,300 |
2,896 |
| Investments in subsidiaries | - |
- |
| Other financial assets | 10,630 |
17,171 |
| Deferred tax assets | 687 |
654 |
| Total non-current assets | 17,596 |
23,815 |
| Current assets | ||
| Inventories | 9 |
5 |
| Trade and other receivables | 10,295 |
8,662 |
| Other non-financial assets | 2,744 |
4,628 |
| Cash and cash equivalents | 10,485 |
10,965 |
| Total current assets | 23,533 |
24,260 |
| Total assets | 41,129 |
48,075 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share capital | 31,948 |
31,948 |
| Retained earnings | 10,705 |
15,950 |
| Foreign currency translation reserve | (10,019) |
(11,755) |
| Equity, attributable to owners of the parent | 32,634 |
36,143 |
| Non-controlling interest | 4,840 |
6,525 |
| Total equity | 37,474 |
42,668 |
| Non-current liabilities | ||
| Lease liabilities | 204 |
343 |
| Deferred tax liabilities | 35 |
33 |
| Total non-current liabilities | 239 |
376 |
| Current liabilities | ||
| Income tax payables | 35 |
45 |
| Trade and other payables | 2,518 |
3,364 |
| Other non-financial liabilities | 624 |
458 |
| Lease liabilities | 239 |
318 |
| Borrowings | - |
846 |
| Total current liabilities | 3,416 |
5,031 |
| Total liabilities | 3,655 |
5,407 |
| Total equity and liabilities | 41,129 |
48,075 |
Review of performance of the Group
2.1 Review of performance of the group for the third quarter ended 30 September 2024 as compared to corresponding quarter ended 30 September 2023
Group Revenue
The group achieved consolidated revenue of S$4.839 million for the quarter ended 30 September 2024 ("Q3 2024'), an increase of 39.6% against the revenue recorded in the corresponding quarter ended 30 September 2023 ("Q3 2023'). The increase in group revenue for Q3 2024 is attributable to higher revenue recorded by both GlobeOSS and Unifiedcomms.
GlobeOSS posted revenue of S$2.116 million in Q3 2024, an increase of 175.2% from the S$0.769 million recorded in Q3 2023. This improvement in revenue was mainly driven by higher revenue from system sale and managed service contracts.
Unifiedcomms posted revenue of S$2.723 million in Q3 2024, a slight increase of 1% from the S$2.696 million recorded in Q3 2023. This improvement in revenue was mainly driven by higher revenue from system sale.
The group's sales mix in Q3 2024 showed a decrease in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 61.1% of the group's total revenue in Q3 2024 as compared to 87.9% in Q3 2023. The lower contribution of managed service contracts to the group's sales mix in Q3 2024 was mainly attributable to a 352.1% improvement in system sale contract revenues of GlobeOSS and Unifiedcomms from S$0.417 million in Q3 2023 to S$1.885 million in Q3 2024.
Group gross profit and gross profit margins
The group posted a gross profit of S$2.879 million in Q3 2024, an increase of 76.9% from the S$1.627 million recorded in Q3 2023. The improvement in group gross profit for Q3 2024 is due to the flow-down effect of higher group revenue. In addition, gross profit margin was higher at 59.5% as compared to 47% in Q3 2023.
The increase in group gross profit margin is mainly attributable to the higher gross profit margin on system sale contract revenues of 77.3% in Q3 2024, versus the 68.3% recorded in Q3 2023. This improvement in system sale contract gross profit margin is attributable to a higher GlobeOSS system sale contracts gross profit margin in Q3 2024, contributed by lower third-party component costs incurred in the current quarter.
Gross profit margin recorded by the group on its managed service contract revenues also increased to 48.1% in Q3 2024 from 44% in Q3 2023. This improvement in managed service contract gross profit margin is attributable to the lower revenue contribution of certain lower-margin managed service contracts.
Interest income
The group recorded interest income of S$0.021 million in Q3 2024, slightly lower than the S$0.03 million recorded in Q3 2023.
Other gains and other item of expense
The group recorded net total expenses of S$7.131 million in Q3 2024, 260.3% higher than the S$1.979 million incurred in Q3 2023. This is mainly attributable to:-
- Higher fair value loss of S$4.465 million assessed on the group's venture investment portfolio in Q3 2024 as compared to fair value gain of S$0.003 million recorded in Q3 2023; and
- Higher net foreign exchange loss as a result of an unfavourable exchange rate movement of MYR and USD against SGD, the group's reporting currency.
Net loss and LBITDA
The group recorded a net loss of S$4.351 million and LBITDA of S$4.029 million in Q3 2024 as compared to S$0.39 million in net loss and S$0.128 million in LBITDA in Q3 2023. The higher net loss and LBITDA is mainly attributable to higher net total expenses, though partly mitigated by higher revenue and gross profit margin.
Detailed segmental breakdown of group revenue and gross profit
The detailed segmental breakdown of the group's revenue and gross profit for Q3 2024, together with comparative results for Q3 2023 is provided below:
Table 2.1: Group consolidated revenue as analysed by business unit for the quarter ended 30 September
Q3 2024
S$'000 |
Sales mix
% |
Q3 2023
S$'000 |
Sales mix
% |
|
| Unifiedcomms | 2,723 |
56.3 |
2,696 |
77.8 |
| GlobeOSS | 2,116 |
43.7 |
769 |
22.2 |
| Captii Ventures | - |
- |
- |
- |
| Others | - |
- |
- |
- |
| Total | 4,839 |
100.0 |
3,465 |
100.0 |
Table 2.2: Group consolidated revenue as analysed by contract type for the quarter ended 30 September
| External Sales | Q3 2024
|
Q3 2023 |
||||
System Sale(1) |
Managed Service(2) |
Group |
System Sale(1) |
Managed Service(2) |
Group |
|
| Revenue | 1,885 |
2,954 |
4,839 |
417 |
3,048 |
3,465 |
| Gross Profit | 1,458 |
1,421 |
2,879 |
285 |
1,342 |
1,627 |
| Gross Profit (%) | 77.3% |
48.1% |
59.5% |
68.3% |
44.0% |
47.0% |
Table 2.3: Group net total expenses for the quarter ended 30 September
Group
|
||
Q3 2024 S$'000 |
Q3 2023 S$'000 |
|
| Other Gains | (102) |
53 |
| Technical Support Expenses | (1,184) |
(1,130) |
| Distribution Costs | (424) |
(396) |
| Administrative Expenses | (528) |
(535) |
| Other Losses | (4,887) |
34 |
| Finance Cost | (6) |
(5) |
| Net total expenses | (7,131) |
(1,979) |
2.2 Review of performance of the group for the nine months ended 30 September 2024 as compared to corresponding financial period ended 30 September 2023
Group revenue
The group recorded consolidated revenue of S$11.383 million for the nine months ended 30 September 2024 ("9M 2024"), a 16.6% decrease against the revenue recorded in the corresponding period ended 30 September 2023 ("9M 2023"). The decline in group revenue for 9M 2024 is attributable to lower revenue recorded by both GlobeOSS and Unifiedcomms.
GlobeOSS recorded revenue of S$3.774 million in 9M 2024, a decrease of 18.3% from the S$4.619 million recorded in 9M 2023. This decrease in revenue was due to lower system sale contract revenues.
Unifiedcomms recorded revenue of S$7.609 million in 9M 2024, a decrease of 15.8% from the S$9.034 million recorded in 9M 2023. This decrease in revenue was due to lower managed service contract revenues.
The group's sales mix in 9M 2024 showed an increase in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 76.1% of the group's total revenue in 9M 2024 as compared to 72.3% in 9M 2023. The higher contribution of managed service contracts to the group's sales mix in 9M 2024 was mainly attributable to a 28.1% drop in system sale contract revenues of GlobeOSS from S$3.787 million in 9M 2023 to S$2.723 million in 9M 2024.
Gross profit and gross profit margins
Although group revenue was lower in 9M 2024, gross profit was higher at S$6.114 million as compared to S$6.046 million recorded in 9M 2023. This is attributable to the higher gross profit margin of 53.7% in 9M 2024 against 44.3% in 9M 2023, which was driven by the improvement in gross profit margin on system sale contract revenues and managed service contract revenues.
Gross profit margin recorded by the group on its system sale contract revenues increased to 80% in 9M 2024 from 45.2% in 9M 2023. This improvement in system sale contract gross profit margin is attributable to a higher proportionate contribution of system sale contract revenues by Unifiedcomms, which generally yields a higher gross profit margin as a result of its typically minimum third party costs. In addition, GlobeOSS system sale contracts delivered a higher gross profit margin in 9M 2024, with lower third-party component costs incurred in the current period.
Gross profit margin recorded by the group on its managed service contract revenues also increased to 45.4% in 9M 2024 from 43.9% in 9M 2023. This improvement in managed service contract gross profit margin is attributable to the lower revenue contribution of certain lower-margin managed service contracts.
Interest income
The group recorded interest income of S$0.066 million in 9M 2024, slightly lower than the S$0.094 million recorded in 9M 2023.
Other gains and other item of expense
The group recorded net total expenses of S$13.139 million in 9M 2024, 116.6% higher than the S$6.066 million incurred in 9M 2023. This is mainly attributable to:-
- Higher fair value loss of S$6.388 million assessed on the group's venture investment portfolio in 9M 2024 as compared to fair value loss of S$0.016 million recorded in 9M 2023;
- Higher net foreign exchange loss as a result of an unfavourable exchange rate movement of MYR against SGD, the group's reporting currency; and
- Higher technical support expenses, due to an increase in headcount at both GlobeOSS and Unifiedcomms.
Net loss and (LBITDA)/EBITDA
The group recorded a net loss of S$7.215 million and LBITDA of S$6.352 million in 9M 2024 as compared to S$0.091 million in net loss and S$0.715 million in EBITDA in 9M 2023. The higher net loss and LBITDA results recorded in 9M 2024 are mainly attributable to the flow-down effects of lower revenue and higher net total expenses, though partly mitigated by higher gross profit margin.
Detailed segmental breakdown of group revenue and gross profit
The detailed segmental breakdown of the group's revenue and gross profit for 9M 2024, together with comparative results for 9M 2024 is provided below:
Table 2.4: Group revenue as analysed by business unit for the nine months ended 30 September
2024
S$'000 |
Sales mix
% |
2023
S$'000 |
Sales mix
% |
|
| Unifiedcomms | 7,609 |
66.8 |
9,034 |
66.2 |
| GlobeOSS | 3,774 |
33.2 |
4,619 |
33.8 |
| Captii Ventures | - |
- |
- |
- |
| Others | - |
- |
- |
- |
| Total | 11,383 |
100.0 |
13,653 |
100.0 |
Table 2.5: Group revenue as analysed by contract type for the nine months ended 30 September
| External Sales | 2024
|
2023 |
||||
System Sale(1) |
Managed Service(2) |
Group |
System Sale(1) |
Managed Service(2) |
Group |
|
| Revenue | 2,723 |
8,660 |
11,383 |
3,787 |
9,866 |
13,653 |
| Gross Profit | 2,179 |
3,935 |
6,114 |
1,712 |
4,334 |
6,046 |
| Gross Profit (%) | 80.0% |
45.4% |
53.7% |
45.2% |
43.9% |
44.3% |
Table 2.6: Group net total expenses for the nine months ended 30 September
Group
|
||
2024 S$'000 |
2023 S$'000 |
|
| Other Gains | 27 |
188 |
| Technical Support Expenses | (3,556) |
(3,379) |
| Distribution Costs | (1,195) |
(1,202) |
| Administrative Expenses | (1,559) |
(1,618) |
| Other Losses | (6,815) |
(21) |
| Finance Cost | (41) |
(34) |
| Net total expenses | (13,139) |
(6,066) |
2.3 Review of the group's financial position as at 30 September 2024 as compared to the group's financial position as at 31 December 2023
Non-cash current assets of the group decreased from S$13.295 million as at 31 December 2023 to S$13.048 million as at 30 September 2024. This 1.9% decrease in non-cash current assets was mainly due to a decrease in other non-financial assets, which comprised the contract assets and costs related to those uncompleted revenue projects. The reduction of such assets is attributable to the decrease in revenue.
Total non-current assets of the group decreased from S$23.815 million as at 31 December 2023 to S$17.596 million as at 30 September 2024. This decrease of 26.1% in noncurrent assets is attributable to a decrease in venture investments of the group, following a reduction in fair value of S$6.388 million in the group's venture investment portfolio recorded as other financial assets and disposal of one venture investment in the reporting period.
Total liabilities of the group decreased from S$5.407 million as at 31 December 2023 to S$3.655 million as at 30 September 2024. This 32.4% decrease in total liabilities is attributable to the decrease in trade and other payables following repayments made in the reporting period.
2.4 Review of the group's cash flow for the quarter and nine months ended 30 September 2024 as compared to the corresponding quarter ended 30 September 2023
The group's net cash flow from operations for Q3 2024 was S$0.86 million, as compared to S$0.327 million for Q3 2023, an increase of 162.9%. This significant increase was primarily due to a profit before income tax (excluding fair value effect on unquoted investments) of S$0.234 million, in contrast with a loss before income tax (excluding fair value effect on unquoted investments) of S$0.325 million for Q3 2023.
The group's net cash flow from operations for 9M 2024 was S$0.339 million, as compared to S$1.396 million for 9M 2023, a decrease of 75.7%. This decrease was primarily due to a loss before income tax of S$6.959 million for 9M 2024, in contrast with a profit before income tax of S$0.074 million for 9M 2023.
The group's net cash flow used in investing activities for Q3 2024 was S$0.458 million, in contrast with the net cashflow from investing activities of S$0.048 million recorded in Q3 2023. This was primarily due to higher investment in intangible assets and the absence of proceed from disposal of a venture investment.
The group's net cash flow used in investing activities for 9M 2024 was S$0.243 million, flat against what was recorded in 9M 2023.
The group's net cash flow used in financing activities for Q3 2024 and 9M 2024 amounted to S$0.182 million and S$1.231 million respectively, as compared to S$0.789 million and S$1.866 million for Q3 2023 and 9M 2023 respectively. The lower net cash used in financing activities was mainly due to the absence of dividend payout to equity holders and absence of dividend payout by a subsidiary to Non-Controlling Interest.
Commentary
The outlook of Unifiedcomms and GlobeOSS has been challenging, especially within the telecommunication industry, where the impact of the diminished performance of certain major managed service contracts, followed by intensified pricing pressure and delays in securing new opportunities, are adversely affecting the business of Unifedcomms and GlobeOSS, resulting in a lower-than-expected performance in the financial period under review. 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 industry conditions worsen or do not improve significantly enough.
AAt Captii Ventures, the group's venture investment business, the climate for business development and funding continues to be challenging for start-ups in certain industries, resulting in a fair value loss of S$4.465 million in the Captii Ventures investment portfolio for the current quarter, and a cumulative loss of S$6.388 million for the nine month period under review.
Against this negative industry backdrop for the future, the group remains optimistic and will continue to work closely with customers and investees, to minimise the negative impact on group financial performance.