Financials

Second Quarter and Half Year Unaudited Financial Statement Announcement For The Period Ended 31 December 2011

Financials Archive

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Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Balance Sheet

Review of Performance

For the second quarter ended 31 December 2011, the Group's quicklime business saw an increase in turnover to S$8.0 million, being 67% more than last corresponding quarter's S$4.8 million, through additional contribution from the expanded quicklime production plant and the sales of hydrated lime. Accordingly, earnings rose by 33% from S$0.9 million to S$1.2 million. For the half year ended 31 December 2011, turnover went up by 63% from S$8.0 million to S$13.0 million, and earnings increased by 58% from S$1.2 million to S$1.9 million.

The scrap metal trading business recorded a 73% decline in turnover from S$4.5 million to S$1.2 million, and an 82% reduction in earnings from S$0.11 million to S$0.02 million. As no sales was generated in the first quarter of the last corresponding half year, turnover for this half year of S$6.3 million was 40% more than previous half year's S$4.5 million, and earnings moved up by 36% from S$0.11 million to S$0.15 million.

In view of the above, the Group posted a slight decrease in turnover to S$9.2 million for this second quarter, from S$9.3 million in the last corresponding quarter, whereas earnings from business operations increased 27% to S$1.2 million which comprised substantially quicklime earnings. On a half year basis, the Group's turnover rose by 54% from S$12.5 million to S$19.3 million, and earnings from business operations increased by 57% to S$2.1 million.

During this second quarter, the Group reported net earnings of S$13.2 million, up from last corresponding quarter's S$1.5 million, largely attributable to a tax refund of S$12.4 million from the China tax authority in connection with capital gain tax paid on the disposal of an investment. For this half year, the Group's net earnings amounted to S$14.1 million, while S$1.7 million was recorded in last corresponding half year.

Other operating expenses increased more than one-fold to S$1.9 million in this quarter, and totalled S$3.2 million on a half year basis, mainly as a result of increases in utilities and overheads, as well as payment for tax consultancy fees. During this half year, depreciation for property, plant and equipment went up by 55% to S$1.0 million, due to the hydrated lime plant and expanded quicklime plant, and net currency exchange gain increased from S$0.2 million to S$0.6 million.

The Group's financial position remained healthy, with a working capital of S$93.1 million as at 31 December 2011, from S$82.0 million as at 30 June 2011. During this half year, the Group's cash flows were substantially boosted by tax refund received of S$12.4 million, and bank interest income of S$0.4 million. This was partially offset by S$2.0 million in dividend paid to shareholders of the Company, progress payments totaling S$2.5 million made for equipment in the expanded quicklime production plant and hydrated lime production plant, and S$1.2 million invested in Mindax Limited ("Mindax") in the half year. Additionally, a total of S$0.9 million was paid to minority shareholders of a subsidiary of the Company pursuant to a capital reduction exercise carried out by the said subsidiary. Consequently, cash balance of the Group increased from S$73.4 as at 30 June 2011, to S$77.8 million as at 31 December 2011.

Trade and other receivables of the Group increased from S$13.0 million as at 30 June 2011 to S$18.6 million as at 31 December 2011, and inventories went down by S$1.1 million to S$3.5 million, in tandem with the rise in quicklime sales during this half year. Trade and other payables decreased by S$1.7 million to S$4.4 million, as a result of payments made to suppliers. As at 31 December 2011, available-for-sale financial asset decreased from S$6.8 million to S$3.2 million, after accounting for the additional investment in Mindax and recognising a fair value impairment.

Commentary On Current Year Prospects

In addition to market uncertainties, rising costs and aggressive market competition continue to pose challenges to the Group's businesses.

The Group will monitor market conditions and react with caution, whilst continuing focus is placed on exploring new investment projects to enlarge the Group's asset base and generate additional revenue stream.