Page 10 - ar2012.pdf

FY2012’s revenue decreased by approximately S$5.1 million
or 15.0%, from approximately S$33.8 million in FY2011 to
approximately S$28.7 million in FY2012. This was mainly due
to a decrease in revenue of approximately S$3.6 million from
the commercial and light industrial (refrigeration) segment
and approximately S$1.6 million from the residential and
commercial (air-conditioning) segment as a result of several
project delays by customers in Singapore as well as general
business slowdown on the back of political uncertainties in the
Malaysian market and credit-tightening in China. The decrease
in revenue was partially offset by a slight increase in revenue
of approximately S$0.1 million from the oil, marine and gas
(refrigeration and air-conditioning) segment.
The Group’s gross profit decreased by approximately S$2.6
million or 24.5%, from S$10.6 million in FY2011 to S$8.0
million in FY2012, due mainly to the provision for inventory
obsolescence and write-down in accordance to the Group’s
inventory provision policy. The Group’s gross profit margin
without accounting for inventory provisions and/or write-down
would have been 32.7%, an increase from 30.5% in FY2011,
due to better cost management and sales strategy to focus on
higher margin products.
Gross profit has decreased for all the three business segments.
The gross profit for the commercial and light industrial
Operational Overview
8 '"3 &"45 (3061 -*.*5&% t "//6"- 3&1035
(refrigeration) segment decreased by S$1.8 million or 24.6%.
This segment continues to be Group’s key business segment
accounting for 69.4% of our Group’s gross profit for FY2012.
The residential and commercial (air-conditioning) segment
which contributed 19.8% of group profit, suffered a drop of
approximately S$758,000 or 32.4%. Contribution from Oil,
marine and gas (refrigeration and air-conditioning) segment
which contributed 10.8% of group profit, suffered a drop
of approximately S$19,000 or 2.1%. Oil, marine and gas
(refrigeration and air-conditioning) is themore profitable segment
contributing gross margin of 39.9% for FY2012 and 42.7% in
FY2011. Gross margins for the residential and commercial (air-
conditioning and commercial and light industrial (refrigeration)
segments were 26.2% and 27.2% in FY2012 respectively.
The Group’s profit before tax decreased from S$3.3 million in
FY2011 to S$0.6 million in FY2012. This is mainly due to the
provision of inventory of S$1.4 million and a specific provision
for doubtful debts of S$575,000. Without these two significant
provisions, the net profit before tax would have been S$2.6
million, approximately S$725,000 less than in FY2011.
The Group continues to maintain a healthy balance sheet,
reducing the inventory levels and having stronger cash
balance. In FY2012, the Group had also fully repaid loans from
shareholders and directors of S$959,000.